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February 12, 2018

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

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thepensionmaven created a topic in Plan Terminations

Deadline for Wind-Up of PS Plan After Sale of Sponsor?

We currently administer a profit sharing plan. The employer may be selling the business. The purchaser would be buying the assets of the company and changing the name of the company. I know you can't have a plan without a sponsor, but is there a specific time limit (excluding the IRS 12 month rule) within which to distribute, rollover, etc. after the company is no longer in business?
Number of replies posted  2 replies      Number of times viewed  68 views      Add Reply
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TaxLawyer1978 created a topic in Retirement Plans in General

How to Report Funds Paid by Employer to Settle Claim for Benefits?

A company incorrectly made contributions to a defined contribution plan on behalf of an employee for over 20 years. The employee received monthly statement and was told a year prior to retirement she had excess of $120K in benefits in the account. Error was discovered and funds forfeited, but the company settled with her on the side to pay her the amount of the benefit. Question: what kind of W-2 compensation is this reportable as? Is this wages that go in box 1? It was agreed that 2/3 of the settlement amount would be W-2 and 1/3 reported on a 1099-MISC. Thanks in advance.
Number of replies posted  7 replies      Number of times viewed  56 views      Add Reply
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401_noob created a topic in Plan Document Amendments

Plan Amendment to use Forfeitures to Fund SH Contributions

Has anyone seen any successful document amendments for a plan to begin using forfeitures to fund safe harbor contributions? I was hoping that FIS Relius would have released their good faith amendments by now, I understand they haven't. https://www.relius.net/News/TechnicalUpdateDetails.aspx?T=P&1=1&ID=1103
Number of replies posted  3 replies      Number of times viewed  70 views      Add Reply
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ldr created a topic in Retirement Plans in General

Count Compensation from Each Employer/Sponsor in a Controlled Group?

We have a client who owns two companies and both have employees including himself. One is a corporation; the other is a LLC. He has W-2 wages of about $190,000 from the corporation and over a million from the LLC. Both companies are adopting employers to the same retirement plan and all employees are covered for both entities. Question: In calculating the maximum benefit he can have for 2017, are we allowed to use both his W-2 wages plus enough K-1 income to get him up to the maximum we can take into account for the year of $270,000?
Number of replies posted  6 replies      Number of times viewed  51 views      Add Reply
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Raj created a topic in 401(k) Plans

First Time 5500EZ for a 15-Year-Old Plan

I own a one-person corporation that opened a solo 401(k) plan in 2003 at Fidelity. The value of the investments has crossed the $250k threshold, so I plan to filing 5500EZ by March 15 (i.e., when I file company taxes). How far back could the IRS audit the plan? How would they know who much actually I deposited each year, considering stock market changes and the fact that I lost money during a few years? It should have been $250K in 13 years considering my deposit has been 20k each year. Is that normal for solo accounts?
Number of replies posted  3 replies      Number of times viewed  37 views      Add Reply
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Towanda created a topic in Cross-Tested Plans

Gateway Minimum in a Top Heavy Plan; 'Compensation' Is Comp While a Participant

I have a Top Heavy Safe Harbor/Cross Tested Plan. Compensation for plan purposes is compensation received while a participant. Obviously the Top Heavy Minimum must use the entire year's compensation. Must the Gateway be based on the entire year's compensation?
Number of replies posted  2 replies      Number of times viewed  32 views      Add Reply
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