DATES & DEADLINES - March 2023

Retirement Plan Sponsors,

The old idiom about March; in like a lion, out like a lamb, is also the perfect capture of your responsibilities to your Retirement Plan this month. Assuming you have already submitted the 2022 EOY information and your retirement plan record-keeping or third party administer partner has completed your Non-Discrimination Testing (is that a big assumption? If you haven’t, get on it. NOW!) the heavy lifting is mostly over, unless your Non-Discrimination Testing came back with a failure. Now, a failure on one (or more) of the many subtests that make up the Non-Discrimination Testing is not like a failure on a test is high school. You did not inherently do something wrong, and instead simply some of your employees might be putting away more than multiple competing regulations allow. While as a Plan Sponsor, you need to correct a failure, in a timely fashion (see the deadline below) to avoid potential impacts to your plan qualified status, it does not necessarily imply bad things about the plan. I have had plans I’ve worked with that anticipated an annual refund to their highly compensated’s or executives, they jokingly referred to it as their vacation accounts. That said, most Plan Sponsors, I’ve experienced, do not like the failures and resulting corrections and we can discuss potential solutions or pathways to rendering the testing results moot if they have historically been problematic. If your plan has passed all your Non-Discrimination Testing, all of this is redundant - you don’t need to worry about corrections because your plan passed!

March 15 is the deadline for

• distributing either ADP or ACP refunds (some of those Non-Discrimination Testing subtests) without incurring a 10% excise tax/penalty to your employer. Refunds are ONLY needed if one of those tests failed AND your plan has not selected another corrective measure, though refunds are often the assumed default correction.

• In the weeds deadlines:

  • March 15th is the deadline to apply to the IRS for waiver of minimum funding for money purchase pension plans.

  • the deadline for S-Corp and Partnership with December 31 fiscal-year-end specific: Employer Contributions are due to the retirement plan’s trust in order to take deductions with no corporate tax extension.

  • And finally, the deadline for Forms 1042/1042-S due to the IRS for income tax withheld from distributions made to nonresident aliens.

March 31st is the deadline for filing Form 1099-R with the IRS if filing electronically (non-electronic filers were due back on February 28th) to report participant distributions from a qualified plan in 2022.

Any questions you have about what your responsibilities are towards your organizations 401(k)/403(b) plans? Email me Christina.Tunison@lpl.com.

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