Subscribe (Free) to
Daily or Weekly Newsletters
Post a Job

Featured Jobs

Defined Contributions Consultant


LDSCO logo

DC Plan Administrator

Plan Design Consultants, Inc.

Plan Design Consultants, Inc. logo

Retirement Plan Sales Consultant

Primark Benefits
(Remote / San Mateo CA)

Primark Benefits logo

Distribution Reviewer

Nova 401(k) Associates

Nova 401(k) Associates logo

Healthcare Actuarial Consultant


BPAS logo

Defined Benefit Consultant

AimPoint Pension Group

AimPoint Pension Group logo


(Remote / West Harrison NY)

Pentegra logo

Retirement Plan Consultant

Retirement Plan Solutions, Inc.

Retirement Plan Solutions, Inc. logo

Client Service Specialist

EPIC Retirement Plan Services
(Remote / Norwich NY)

EPIC Retirement Plan Services logo

View More Employee Benefits Jobs

Free Newsletters

“BenefitsLink continues to be the most valuable resource we have at the firm.”

-- An attorney subscriber

Mobile App image LinkedIn icon
Twitter icon
Facebook icon

<< Previous news item   |   Next news item >>

First Year -- Missed Funding Deadline
BenefitsLink Message BoardsLink to more items from this source
Nov. 2, 2021

"I have almost no experience with missed funding deadlines. Dealt with them twice in my lifetime but both deposited prior to December 31 of the same year, following 9/15 deadline.

A brand new cash balance/401k-PS plan combo for 2020. Was told that 401k deferrals and safe harbor match was contributed timely. The issues are the CB deposit and PS deposit.

  • Because the plan sponsor is totally broke, they cannot make the $200k CB deposit (assume it's the minimum required -- I do not have the report to check), whatever the PS amount due (must make it to pass combo plan testing) or the 10% penalty on missed contributions. It's unlikely they can come up with the monies by 12/31/2021 and possibly never, because business went south suddenly.
  • Possibly covered by PBGC. Not even sure if PBGC was alerted about missing contributions -- I believe Form 10?
  • All participants were provided statements of benefits for both CB and PS for 2020.

They want to send the IRS a Form 5330 with a letter explaining their situation and ask for any kind of relief. Based on my understanding, they may be late for filing a Form 5330 unless they filed Form 5558 for a possible 6-month extension. Definitely late for 10% excise tax, correct?

From what I read, IRS may impose additional late interest charges. Not even sure if AFTAP was done and/or 101j notice was provided by 10/31/2021. My first thought was to freeze the plan ASAP but apparently they were told by the actuary, not doable. What???

Given that they may never be able to make any of the contributions, what can they do? What a mess."

Please click here to report this link if it is broken (for example, if you see a "404 File Not Found" error message after you click on the link above).
An important word about authorship: BenefitsLink® is providing a hypertext link to the item shown above, but is not the author of the item (unless otherwise specified).
© 2023, Inc.