Calendar of Events
The following is a summary of the annual events that take place in the typical retirement plan. The dates used are based on a plan with a December 31st year end.
Review your payroll software to ensure the new year’s plan limits are updated.
Review the deferral, and match formula, of your participants that typically contribute the maximum deferral amount. You may have a flat dollar amount spread over all pay periods to reach the previous years’ maximum, which may now have to be increased if the deferral limit has changed.
IRS Form 1099-R must be mailed by this date to participants who received a distribution. ESOP plans with pass-through dividends must send a 1099-DIV.
You should also review outstanding plan loans to ensure they are being repaid. If a payment has not been made within the prescribed grace period you should send a 1099-R for the deemed default.
If your plan fails the ADP/ACP test refunds must be made no later than 2½ months after the end of the plan year otherwise the employer is subject to a 10% penalty.
Corporations, and LLCs filing as corporations, must deposit their annual employer contribution(s) for last year by their tax filing deadline. Filing an extension generally provides an additional six months.
Required minimum distributions must start no later than April 1 following the later of the year the participant turns age 70½ or terminated employment. 5% owners must begin minimum distributions regardless of their employment status. A participant that waited until April 1 to take their first minimum distribution will need to receive a second distribution by December 31 for the current year.
Partnerships, sole proprietors, and LLCs filing as partnerships must deposit their annual employer contribution(s) for last year by their tax filing deadline. Filing an extension generally provides an additional five months for partnerships.
Refunds for exceeding the 402(g) deferral limit, $16,500 in 2011, must be made to avoid double taxation to the participant.
Non-profit organizations must deposit their annual employer contribution(s) for last year by their tax filing deadline. Filing an extension generally provides an additional six months.
IRS Form 5500 must be filed with the Employee Benefits Security Administration (EBSA). Alternatively, Form 5558 may be filed to extend the due date until October 15.
IRS Form 5330 must be filed to report penalty excise tax on the late deposit of deferral contributions and certain other prohibited transactions.
Corporations, and LLCs filing as corporations, that filed for an extension of their tax filing must deposit their employer contributions for last plan year.
Plans that did not file Form 5558 to extend the Form 5500 due date must distribute the Summary Annual Report (SAR) to all plan participants.
The “AFTAP” notice for defined benefit plans, including cash balance plans, should generally be provided to clients by this date.
Deadline to file Form 5500 if Form 5558 was filed by July 31.
Defined benefit plans, including cash balance plans, must file their PBGC Premium Filing and remit payment by this date.
Plans using Safe harbor, auto-enrollment, and qualified default investment alternatives (QDIA) must send their annual notices. Notices must be sent to participants no earlier than 90 days prior to the start of the plan year, and not later than 30 days prior to the start of the plan year.
The Summary Annual Report (SAR) must be distributed to all participants if the Form 5500 was on extension.
Annual required minimum distributions must be made.
Deposit employee contributions, and loan payments, IMMEDIATELY!
Although this is more than an annual event, we never pass on an opportunity to remind plan sponsors that you need to deposit employee contributions and loan payments within 7 business days.
Although the 7 business day rule is only a safe harbor provided by the DOL, and only applies to small plans under 100 participants, the DOL is aggressively pursuing plan sponsors on this timing issue. RPA recommends all plan sponsors follow the 7 business day rule to avoid becoming a DOL target.