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Message Boards Digest

January 16, 2018

Here are the most recently added topics on the BenefitsLink Message Boards:

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jeanh created a topic in Form 5500

Sub S Plan Sponsor Eligible for Small-Plan Exception from 5500EZ Filings?

Had a call from an accountant asking whether a Sub S client is considered to fall under the owner-only rule (the Sub S has two owners) for filing of the 5500EZ as long as assets are under the $250k limit. I've always thought the instructions used the word partnership and thus an EZ option was not available for Sub S corp structure.
Number of replies posted  7 replies      Number of times viewed  75 views      Add Reply
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JoseS created a topic in 401(k) Plans

Single Employer Plan's Accounts Moved to Multiple Employer Plan; Termination Occurs?

When a single employer 401(k) plan transfers to a multiple employer 401(k) plan, is this considered a termination of the single employer plan? Or simply a merger? If it's treated as a termination of the single employer plan, would the plan be subject to the 12-month restriction on starting a new 401(k)? Participants were told they're NOT eligible for distributions.
Number of replies posted  3 replies      Number of times viewed  42 views      Add Reply
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jtfitz57 created a topic in Employee Stock Ownership Plans (ESOPs)

Distribution of My Account in Terminated ESOP; $180,000 in Damages?

In July our company's ESOP was terminated. I decided on the default action for my shares, which was to sell the shares and roll over the proceeds into a 401(k). I could have kept the shares, but I thought it was time to divest myself of so many shares of the company I work for (i.e., the Enron effect). As "luck" would have it, immediately after the final day to make the decision, the company's 2nd quarter report came out, and the stock lost value. I expect that the act of selling so many shares during liquidation played a part in dropping the share price further. So I was unhappy when the amount of money transferred after the stock sale was approximately $40,000 less than when I made my decision. The stock price has since gained what it had lost prior to when I made my decision to sell the shares. Now I get word that my company is being sold. The price they've determined for all outstanding shares is significant. I would have made $180,000 more than what I now have. Is there anything legally fishy here? Would I have any recourse, or instead am I just out of luck for choosing not to take the stock? I think that the administrator should have looked out for my interests, not what would make the sale of the company easier. I have a hard time not believing that the sale of the company had been agreed upon prior to the ESOP termination.
Number of replies posted  3 replies      Number of times viewed  47 views      Add Reply
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Phlyers created a topic in 401(k) Plans

Employee Leaving Co. for Another Co. in Controlled Group QSLOB

We have an employee leaving Co. A for Co. B. Both companies are in a controlled group, but Co. B and a few other companies constitute a Qualified Separate Line of Business. Employee wants to roll over his account to Co. B's plan. Is a rollover appropriate, when the QSLOB treats these companies as separate employers? Or are the companies still considered a controlled group for this purpose and a rollover isn't appropriate?
Number of replies posted  1 reply      Number of times viewed  31 views      Add Reply
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kgr12 created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Exceptions to Child's Right to Health Coverage Until Age 26, Under a Retiree Health Plan?

A recent retiree from a large US-based corporation was told that her 25-year-old son was not eligible for coverage under the retiree health plan because it only offers coverage until age 25 rather than age 26 as in the active employee plan. I thought the ACA required all plans to offer coverage until the child's 26th birthday, with no excepions. Is that right?
Number of replies posted  3 replies      Number of times viewed  71 views      Add Reply
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pmacduff created a topic in Distributions and Loans, Other than QDROs

Handling a Section 402(g) Excess

Participant is slightly ($18) over the 402(g) limit for 2017. Refund was processed on Jan. 3, 2018. The participant will receive a 1099-R next January from the vendor for the excess. My question: regarding the 2017 W-2 form -- will it show $24,018 or $24,000? There is no line on the 1040 return for the actual deferral amount,so I'm not sure. I've never seen the actual W-2 form for someone who exceeded the limit.
Number of replies posted  3 replies      Number of times viewed  50 views      Add Reply
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TPApril created a topic in 401(k) Plans

Plan Terminated, Non-HCE's Account Liquidated, But Now Additional Employer Contribution Due

2 person plan. Owner and NHCE. Was terminated early last year due to business closure. All final comp was provided for a safe harbor contribution, which was deposited. NHCE's account was liquidated. Owner's account was not. Hence the plan still has assets. With the close of the year, accountant has determined there was additional pay that did not receive the safe harbor contribution. With no account to deposit to, what would the best way be to make up the NHCE's safe harbor contribution of about $50?
Number of replies posted  5 replies      Number of times viewed  41 views      Add Reply
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