"I left the company few years ago and holds the ESOP stocks (not cash) in my ESOP account per yearly certificates issues by the previous employer. The company sent out a new letter mentioning they are allowing one time lump-sum distribution for terminated employees at the last years valuation otherwise they will convert the shares to cash next year per recently made plan amendment and distribute the cash in future per plan. I suspect company is planning to get acquired and this is the way to get as much stock back as they can to sell it at higher when get acquired. My question is can the employer change the plan terms like this and can they segregate the terminated employees to cash before company sale ? What happens if the ESOP stocks and cash accounts gets closed by the buyer of the company ? My concern is I don't want to miss the upside (appreciation due to suspected sale) especially after company not letting the terminated employees cash segregated and have forced invested in company ESOP stocks for many years."

"We have a client that gives about 100 employees varying gift cards throughout the year. They do not want the gift card included in compensation for employer contribution purposes. Total gift cards provided might be $10,000 on NHCE wages of $15,000,000. This will certainly pass the generally accepted 3% spread for compensation testing. But I see one IRS requirement that says the definition 'does not by design favor highly compensated employees.' This clearly does because the HCEs do not get gift cards so they have no comp reduction (but which is irrelevant since they earn well over $345,000.) It would probably be ok to exclude but then we'd have to get reduced compensation from the client. My question is: we can reduce plan comp by the gift cards for contribution allocation purposes but can we use the same reduced compensation definition for testing purposes (this is K/DB combination)? I wouldn't want a small inadvertent error to cause a testing problem, minimum gateway or top-heavy minimum violation. Comments?"

"We have a group that is a MEWA and has 15 employer contribute. They are not under a trust. Is 4T to be used under 8b? It has over 10 employers but when I read up on its definition: 10 or more employer plan under Code section 419A(f)(6) and then read on 419, 419A and 419A(f)(6), it talks about a funded plan. However when I called the Efast Customer Service and the Office of Chief Accountant they did not know. They referred me to the Office of Regulations and Interpretations. This office does not call back consistently. Does anyone have any insight to help?"

"Plan sponsor filed its 2021 Form 5500 late. They did not use DFVCP. IRS (but not DOL) sent a notice of proposed penalty. By phone, IRS tells me that, if we re-file the 2021 5500 now using DFVCP, IRS will waive the proposed penalty. I understand that the IRS's proposed penalty notice does not disqualify the plan from using DFVCP. From IRS's perspective, this is all fine. My understanding from DOL, however, is that plans are ineligible from using DFVCP once they have already filed a 5500. In other words, once a 5500 is filed, it's no longer 'delinquent' so cannot use DFVCP. I've been told by DOL in that situation that an amended return can be filed, but it cannot be filed using DFVCP. (This has been a few years now so may be stale info.) No information would be changing on the new filing; its sole purpose would be to use DFVCP. Does anyone know whether DOL will accept a DFVCP filing in that situation?"