Small Business Case Studies for Entrepreneur University's 15 Ideas to Provide Long-Term Motivation shares 15 employee engagement and motivation best practices:

We recently discussed Conflicting Surveys, one survey found that a Majority of Employers are Maintaining or Increasing Their 401(k) Match, and three other surveys found that Employers are Cutting their 401(k) Match. No matter what the studies say, if your company is one of the companies cutting a 401(k) benefit, it is important to properly communicate the cut. The Challenge of Communicating 401(k) Cuts stresses the importance of over-communicating and provides some tips to ensure employees get the accurate and legal information they need in a compassionate manner. It recommends that the announcement come from the top leadership of the company and include the reasons for the cut (e.g. avoid layoffs). Managers and HR should be equipped to answer questions, and any legal disclosure documents, such as the Summary of Material Modifications (SMM), should be accompanied with an explanation of the notice:

While we have seen Negative ESOP Coverage in the media from time to time, we are also starting to see more negative 401(k) coverage, like this 12-minute 60 Minutes segment:

Deadlines, Extensions and the DFVC Program is another EFAST2 Filing System article that discusses IRS Form 5500 deadline and extension issues. It discusses the Updated IRS Form 5558 Procedures, noting that in many cases the same automatic extension will apply, but will not need to be attached to the filing:

In recent posts we have been discussing the 2009 IRS Forms 5500 Electronic Filing Requirements, the EFAST2 Filing System, and the EFAST2 Filing System Credentials. Three new informative articles on EFAST are now online.

New IRS Ruling Regarding Taxation of ESOP Distributions discusses technical advice memorandum (TAM) 200841042, which we discussed last October in TAM: ESOP Stock Distributions Subject to Immediate Put Option to Company are Indeed Stock Distributions Eligible for Net Unrealized Appreciation (NUA). This TAM involved a local IRS office that took the position that share distributions immediately put to the company should be considered cash distributions, causing the distributions to be ineligible for net unrealized appreciation (NUA) treatment. The article discusses how the national office overruled the position:

The April 15, 2009 Employee Ownership Update is online and discusses the following:

The ESOP Association has announced the 2009 Silver ESOP Award Winners:

The IRS posted an update to the Sample Plan Language (SPL) for IRC Section 409(p) Transfers. The changes incorporate some of The ESOP Association Comments on Sample Plan Language for 409(p) Transfers. The newly inserted/changed language is in red below:

Our Honorees on Weathering the Current Economic Downturn: Spring 2009 discusses the survey results of how Top Small Workplaces and Best Bosses are weathering the current economic conditions:

The April 1, 2009 Employee Ownership Update is online and discusses the following:

Yesterday we discussed the Updated IRS Forms 5558 Procedures. Form 5500 Extension Request – An IRS Nightmare discusses some recent problems a TPA encountered with IRS Forms 5558 filings. Even though a signature is no longer required, the IRS sent a letter to some of their IRS Form 5558 filers that did not sign the form rejecting the extension. The article discusses the problems that the TPA firm encountered trying to resolve the problem and shares some best practices:

The IRS last updated IRS Form 5558 in January 2008 as part of a change to automatically approve the extension. The IRS is currently working on an updated Form to be released later this year, in part to accommodate the EFAST2 Filing System.

Congratulations to the 2009 AACE Award Winners announces the winners of the 2009 Annual Awards for Communications Excellence (AACE):

A new Capital Hill Visit Kit is now online and provides information on how to make the most out of a visit to a member of Congress. It discusses how to schedule your visit, how to get there, and what to do during a meeting with a member of Congress and/or their staff aide.

• Eliminating or Changing a Fixed Matching Formula
• Mid-Year Safe Harbor Changes: Freezing or Eliminating the Match and Using the Maybe Nonelective Notice
• Reducing or Eliminating Safe Harbor Matching Contributions
• Conditional Safe Harbor Notice

There is another factor to consider in making the decision is the top heavy test. A safe harbor 401(k) plan will lose its top heavy exemption if it doesn't qualify as a safe harbor plan for the entire plan year. Watch Out for Top-Heavy discusses the potential top heavy issues that a plan may face when reducing or terminating a safe harbor 401(k) plan: