"Plan 001 effective date was 01/01/2017, and the Plan merged into a MEP on 02/12/2021. This Plan spun-off from the MEP on 11/06/2023 into a newly established standalone plan. We have some conflicting views on the effective date of the newly established standalone Plan. I believe the original effective date should be 11/06/2023, but others believe it should be 02/12/2021.

• Plan 001 Original Effective Date was 01/01/2017. This Plan did not file 2017, 2020 or the final 2021 5500 prior to joining the MEP. The 2021 5500 for Plan 001 should have shown the assets as a “transfer out”; listed the receiving Plan Name; marked as a short plan year, and final 5500.
  • Even though the assets were not distributed, this would have essentially terminated the Plan, because 001 no longer ceases to exist, and the remaining assets were absorbed into another Plan. The only difference is that when filing the 5500, the plan merging into a MEP would answer “No” to whether there has been a resolution to terminate the Plan; whereas, a Plan Termination would have answered “Yes” and shown the assets as distributed instead of a rollover.
• The Plan joined the MEP (Plan 333) effective 02/12/2021.
• The Plan spun out of the MEP into a “newly established” standalone plan on 11/06/2023, but we are using the MEP joinder effective date of 02/12/2021 as the effective date of the newly established Plan and under Plan 001.

When preparing the 5500, it will show that the Plan has a 01/01/2023 beginning balance of zero, which is true because the assets were under a MEP (Plan 333), and then a transfer/rollover was processed during the year from the MEP. It is being suggested that we file the 5500 using Plan Year 11/06/2023 through 12/31/2023 under Plan 001 as a short plan year, but I am arguing that we can't do that if the original effective date on the 5500 is 02/12/2021. If we file the Plan like this, I feel as though it will trigger the IRS, and they will want to know what happened to all the other 5500 filings. Regardless of missed filings, I believe this Plan should be 002 with an effective date of 11/06/2023. Filing under 001 is going to trigger a bunch of activity from the DOL and IRS that we don’t want, and potentially the correction of 2023’s 5500 (along with all other missed filings) if filed as-is under 001 with effective date 02/12/2021. Thoughts?"

"There seems to be pushback by a recently retired sponsor of their own DC plan who has an unusually large account balance and does not want to terminate as recommended. They believe the funds and investments are safer under a retirement plan than an IRA."

"I know Top Heavy Rules were changed so now non-excludable and excludable can be tested separately and the Top Heavy minimum can also be allocated to just the non-excludable. I know the provision applies to plans starting after 12/31/2023, but we have differing thoughts on when these options will actually start affecting plans. The prevailing thought is that in order to allocate the Top Heavy minimum to just the non-excludable, the actual Top Heavy must be disagg as well. Since the determination date is the last day of the prior plan year, the consensus is we cannot use the non-excludable option for the minimum allocation until 2025. Another thought is that they are independent of each other, that you can run test with all employees but then allocate the Top Heavy minimum to just the non-excludable employees.... I do not see the benefit of using disagg for Top Heavy Test since the more Non-Key balances the better for the percentage. My thoughts are the only way it makes sense to split the test is so you can get the benefit of allocating the top heavy minimum to the non-excludable, since more likely than not there are no excludable key employees which makes the test 0%. Basically I think you have to allocate the Top Heavy Minimum in the same manner as you ran the test. Thoughts?

"Another thought that is confusing the issue, is what if there is a Key employee who is in the excludable test, so that test is actually top heavy? With ADP/ACP and Coverage, we know there is the option to disregard the excludable employees from the test. I haven't see that spelled out for Top Heavy as yet, and if my previous observation is accurate and there is a Key employee who is excludable and that test is technically 'top heavy' does that mean that those excludable employees now need a top heavy minimum?"

"Any thoughts on this one is appreciated. We have a large 403(b) Plan, over 100 lives. They have filed as a large plan previously, along with the required audit. A new ownership group took over; 2023 plan year is their first one involving the plan. After much foot dragging, I finally received their 2023 employee data, 6 weeks before 10/15. After stressing that they need to take action since the audit is needed and those take time (and money), I finally heard back today: 'They do not believe the audit is needed'. They want us to finish the 2023 form 5500 and they will file but without the audit. Reasoning and pointing out that an audit is needed whether they want to engage that or not has gone nowhere. I can document how they are wrong on this, but otherwise, would everyone just prepare the 5500, indicate the audit is not attached, and let them get 'caught' by the IRS/DOL a few weeks from now? Should we as the TPA file the 5500 for them knowing it is not complete?"

"We are currently using DATAIR for the documents and their pension system for testing. What software systems do you all have personal experience with and recommend?"