"Hi This is a general question. A DB (one lifer) plan did not fund the 2021 MRC - minimum required contribution - by 9/15/2022. The MRC was 25k as of 9/15/2022. It was not funded by 12/31/2022 either. Let say they want to fund 2021 MRC by 7/1/2023. How is the amount calculated? Using EIR (effective interest rate) for 2021 all thru 7/1/2023 or 2021 EIR until 12/31/2022 plus 2022 EIR? Assuming that there will be room for it under 404, this amount can be deductible for 2022, correct? (assume corporate tax return is on extension)

"As for excise taxes, from 5330 under 4971, it is very clear. It would be 10% for 2022 plus 100% for 2023. Schedule D. Tax on Failure To Meet Minimum Funding Standards (Section 4971(a)) In the case of a single-employer plan, section 4971(a) imposes a 10% tax on the aggregate unpaid minimum required contributions for all plan years remaining unpaid as of the end of any plan year. Additional tax for failure to correct. For single-employer plans, when an initial tax is imposed under section 4971(a) on any unpaid minimum required contribution and the unpaid minimum required contribution remains unpaid as of the close of the taxable period, an additional tax of 100% of the amount that remains unpaid is imposed under section 4971(b). So is there anyway to have the IRS accept 10% for each year or 2023 has to 100% which is very steep?

"As for penalties for late filing 5330 Penalty for late filing of return. If you do not file a return by the due date, including extensions, you may have to pay a penalty of 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. The penalty will not be imposed if you can show that the failure to file on time was due to reasonable cause. If you file late, you may attach a statement to Form 5330 explaining the reasonable cause. Penalty for late payment of tax. If you do not pay the tax when due, you may have to pay a penalty of ½ of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. The penalty will not be imposed if you can show that the failure to pay on time was due to reasonable cause. Interest and penalties for late filing and late payment will be billed separately after the return is filed.

"So, looks like the penalties are (is the MRC based on 9/15/2022 amount or the date of actual deposit)

• For late deposits, 10% for 2022 plus 10% to 100% for 2023
• plus possibly 25% of MRC for late filing of 5330 plus 25% of MRC for late payment of tax.

Any corrections/comments to above? Thanks"

"Participant dies without a beneficiary. Estate is the beneficiary under the plan document. CA has a small estate affidavit to help small estates avoid probate court. By using the small estate affidavit the death proceeds could be made payable directly to the beneficiary of the estate rather than the estate. Should the plan sponsor be concerned that creditors might have a claim? Creditor claims do not appear to be specifically addressed in the small claims affividavit."