A NON-TECHNICAL REVIEW OF QUALIFIED RETIREMENT PLAN LEGISLATIVE AND ADMINISTRATIVE ISSUES
and one or more participating employers , while PEPs must be operated by pooled plan providers ( PPP ), likely to be a financial services company , third-party administrator , insurance company , recordkeeper , or similar entity .
• The MEP sponsor generally serves as the primary administrative fiduciary for the plan , while with a PEP , the PPP is responsible for performing most administrative and fiduciary functions for the plan . In a PEP , employers retain only limited responsibility , such as selecting and monitoring the pooled plan provider , any other named fiduciaries , and investment managers . The SECURE Act requires pooled plan providers to register with both the DOL and the Treasury Department .
Proponents of MEPs are encouraged by recent changes and are hopeful that the availability of PEPs will greatly increase the number of employees covered by employer sponsored retirement plans . However , it is unclear whether they will have a significant impact on the MEP landscape . While MEPs can be attractive to employers that want to provide a retirement plan to their employees but lack the financial and administrative capacity to do so , there are potential disadvantages of which employers should be mindful . Examples of some disadvantages include the potential for increased costs due to the involvement of multiple service providers and conflicting participating employer priorities . It is important for employers to be well informed of the potential benefits and pitfalls related to participating in a MEP . It is also important to work with an experienced service provider who can provide guidance on this complex issue . ■
Upcoming Compliance Deadlines for Calendar-Year Plans
1st February 2021
IRS Form 1099-R - Deadline to distribute Form 1099-R to participants and beneficiaries who received a distribution or a deemed distribution during the prior plan year .
IRS Form 945 - Deadline to file IRS Form 945 to report income tax withheld from qualified plan distributions made during the prior plan year . The deadline may be extended to February 10th if taxes were deposited on time during the prior plan year .
15th March 2021
ADP / ACP Corrections - Deadline for processing corrective distributions for failed ADP / ACP tests without a 10 % excise tax for plans without an Eligible Automatic Contribution Arrangement ( EACA ).
Employer Contributions - Deadline for contributing employer contributions for amounts to be deducted on 2020 S-corporation and partnership returns for filers with a calendar fiscal year ( unless extended ).
1st April 2021
Required Minimum Distributions - Normal deadline to distribute a required minimum distribution ( RMD ) for participants who attained age 70 ½ during 2020 ( for participants with birthdays July 1 , 1949 and later , the SECURE Act changed the RMD age to 72 ). Important note : The 2020 RMD requirement was waived under the CARES Act .
15th
Excess Deferral Correction - Deadline to distribute salary deferral contributions plus related earnings to any participants who exceeded the IRS 402 ( g ) limit on salary deferrals . The limits for 2020 were $ 19,500 , or $ 26,000 for those age 50 and over if the plan allowed for catch-up contributions .
Employer Contributions - Deadline for contributing employer contributions for amounts to be deducted on 2020 C-corporation and sole proprietor returns for filers with a calendar fiscal year ( unless extended ).
BENEFIT INSIGHTS WINTER 2021