CRPS cheat sheet

Qualified plans must satisfy Code Section 401(a): exclusive benefit of employees, permanence, nondiscrimination (401(a)(4)), minimum coverage (410(b)), minimum vesting, and required distribution rules.

SIMPLE IRA eligibility: employer with 100 or fewer employees and no other qualified plan; the employer must contribute either a dollar-for-dollar match up to 3% of compensation or a 2% nonelective contribution for all eligible employees.

SEP: employer-only contributions at a uniform percentage of compensation for all eligible employees; an IRA-based SEP requires no Form 5500, and it may be established as late as the employer's return due date including extensions.

Cash balance plans are defined benefit plans using hypothetical accounts with pay credits and interest credits; they must satisfy 401(a)(26) minimum participation (lesser of 50 employees or 40% of the workforce), 415(b) benefit limits, and 401(a)(4) nondiscrimination on a benefits basis.

Cross-tested/new comparability profit sharing requires a gateway: each NHCE allocation rate must be at least one-third of the highest HCE rate, or at least 5% of compensation.

Top-heavy defined contribution plans (key employees hold more than 60% of account balances) must provide non-key employees a minimum contribution of 3% of compensation; combination DB/DC plans use a 5% minimum for participants benefiting only under the DC plan.

Controlled groups (Section 414(b)/(c), 80% common ownership) and affiliated service groups (414(m)) are aggregated as a single employer for coverage, nondiscrimination, top-heavy, and 415 limits.

Deduction limit for a defined contribution plan is 25% of aggregate participant compensation; elective deferrals are not counted against that 25% and are deductible when contributed (404(n)).

Plan type decision rules: 403(b) only for 501(c)(3) organizations, public schools, and ministers (universal availability); 457(b) for governmental and tax-exempt employers, with no 10% early distribution penalty on separation from service.

Pre-approved documents (prototype and volume submitter) carry IRS opinion or advisory letters and must be restated on a six-year cycle within the applicable remedial amendment period; individually designed plans generally obtain determination letters only in limited circumstances.

Interim good-faith amendments reflecting new law or guidance are due by the last day of the plan year for which the change applies, unless the IRS provides a later deadline; the remedial amendment period permits retroactive correction.

The summary plan description must be furnished within 120 days after the plan is adopted (and by the first deferral date for a new 401(k)), and to newly eligible participants within 90 days after entry.

A summary of material modifications is due within 210 days after the end of the plan year in which a material change is adopted.

Form 5500 series is due the last day of the seventh month after the plan year ends; Form 5558 extends the deadline 2½ months; plans with 100 or more participants at the beginning of the plan year require an independent qualified public accountant audit.

Safe harbor 401(k) notices must be delivered at least 30 and no more than 90 days before the start of the plan year; the QDIA notice is due at least 30 days before default enrollment and annually 30 to 90 days before the plan year.

ERISA fidelity bond must equal at least 10% of plan assets, with a $1,000 minimum and a $500,000 maximum ($1,000,000 if the plan holds employer securities).

Eligible rollover distributions require the 402(f) notice and a 30-day election window (waivable by the participant); eligible participants must also receive 404a-5 fee disclosures at enrollment and annually.

Operational compliance rule: plan operations must follow the written document (eligibility, allocation conditions, vesting, distribution options); practice inconsistent with the document is an operational failure that cannot be cured by amendment alone.

ADP test: the HCE average deferral percentage may not exceed 1.25 times the NHCE average, or may not exceed the lesser of 2 percentage points above the NHCE average or twice the NHCE average; the ACP test uses the same structure for matching contributions.

402(g) elective deferral limit is indexed annually; age-50 catch-up under 414(v) is a separate limit; excess deferrals must be distributed with earnings by April 15 of the following year to avoid double taxation.

415(c) annual additions limit: lesser of the indexed dollar amount or 100% of compensation; annual additions include elective deferrals, employer contributions, and forfeitures, but exclude catch-up contributions.

Section 401(a)(17) caps compensation counted for allocations and testing; compensation must satisfy 414(s); the deferral limit is never prorated for a partial year, but the 415(c) dollar limit is prorated for a short limitation year.

Minimum vesting for employer nonelective contributions: three-year cliff or a graded schedule reaching 100% within six years; safe harbor nonelective and safe harbor match are 100% vested immediately; top-heavy plans use a six-year graded or three-year cliff maximum.

Break-in-service rule: after five consecutive one-year breaks, pre-break service may be disregarded for vesting and eligibility if the participant was not vested; service is generally credited using the elapsed time method.

Plan loan limit: lesser of $50,000 reduced by the highest outstanding loan balance during the prior 12 months, or 50% of the vested account balance, with a $10,000 statutory floor; repayment must be level amortization at least quarterly, generally within five years.

Hardship distribution requires an immediate and heavy financial need, is limited to the amount needed (plus taxes and penalties), and may be taken from safe harbor events or facts-and-circumstances; self-certification is permitted.

EPCRS correction: Self-Correction Program (SCP) for operational failures with established practices, Voluntary Correction Program (VCP) with IRS filing and fee, and Audit CAP for failures identified on examination; missed deferral opportunities are corrected with a QNEC plus earnings.

ERISA 404(a)(1) five duties: act solely in the interest of participants (loyalty), with the care of a prudent person, diversify investments to minimize large losses, follow the plan documents, and pay only reasonable expenses.

A person is a fiduciary to the extent he or she exercises discretionary authority or control over plan management or disposition of assets, or renders investment advice for a fee.

3(38) investment manager: a bank, insurer, or registered investment adviser that accepts discretion over plan assets and is solely responsible for those investment decisions; 3(21) adviser gives non-discretionary advice and shares fiduciary status without assuming discretion.

Code 4975 prohibited transaction excise tax is 15% of the amount involved for each year, rising to 100% if the transaction is not corrected within the taxable period; 406(a) covers party-in-interest dealings and 406(b) covers fiduciary self-dealing.

408(b)(2) requires written disclosure of services, compensation, and fiduciary status from plan service providers; failure to obtain the disclosure makes the arrangement a prohibited transaction until corrected.

404(c) relief from liability for participant-directed investment losses requires a broad range of options, receipt of required disclosures, and actual participant exercise of control.

Fiduciary duties are personal and non-delegable (except to a 3(38) manager); a fiduciary who knows of another fiduciary's breach and fails to make reasonable efforts to remedy it is liable as a co-fiduciary.

ERISA Section 107 requires retention of records supporting plan operations, participant data, and Form 5500 filings for at least six years after the filing date.