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BenefitsLink
Message Boards Digest
March 14, 2018
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Here are the most recently added topics on the BenefitsLink Message Boards:
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EBECatty created a topic in 401(k) Plans
I've seen this a number of times in all sorts of contexts, and can never quite bring myself to accept that it works. Say an employer has a 401(k) plan that defines "compensation" as W-2 wages with no exclusions. They also have some other type of plan (call it incentive compensation; long-term performance plan; performance-based bonuses; employment contract giving an executive a bonus as a percentage of division's profit; etc.) that gives employees what are essentially cash bonuses, however labeled, that are clearly W-2 wages in the year paid. The other plan or agreement in the boilerplate then says something along the lines of "any amount paid under this plan/agreement shall not be included for any other purpose, including any pension plan, etc..." Is there any reasonable argument to be made that you can exclude the payment for purposes of the 401(k) compensation?
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guest_with_question created a topic in Defined Benefit Plans, Including Cash Balance
When you have a single transaction that is over 5% and there were other purchases/sales of the investment during the year do you report the single transaction and then include in the series of transactions also?
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Dennis Povloski created a topic in Form 5500
Got a question from an accountant who has a client that is the 100% owner of a single member LLC taxed as a sole proprietorship. The LLC is the sponsor of a solo-401k plan and files Form 5500-EZ. The owner of the LLC now sits on a board of directors, and the board of directors will only pay director fees to the individual, not his LLC. So the director fees are going to be reported on a separate schedule C. My instinct tells me that his sole proprietorship should become a participating employer to the plan if he wants to use the director fees as the basis for contributions. If he does have the sole proprietorship become a participating employer, does that somehow ruin the ability to file a Form 5500-EZ? It's the same person, just with two separate business entities that he is the 100% owner of, so I can't imagine that it would, but I can't find anything that specifically addresses this.
Thanks!
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kmhaab created a topic in 403(b) Plans, Accounts or Annuities
A local church sponsors a 403(b)(9) plan offered by the pension board of the denomination. The Plan meets the definition of a church plan for ERISA and IRC purposes. Adoption agreement states that all employees working 20 hours or more per week are eligible to participate. Church did not realize this and has only been allowing employees working 40 hours per week to participate. Can this be corrected by adopting a retroactive amendment changing eligibility to 40 hours per week? IRS fix-it guide says that a failure to operate a 403(b) plan according to the terms of the written plan can be corrected by adopting a retroactive amendment conforming the plan to its operation, but I am unclear whether this would apply to the situation at hand. It just seems too simple....
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Good401(k) created a topic in 401(k) Plans
Interesting scenario, appreciate any insight: Facts: - 401(a) profit-sharing plan (ER contribution only) has 6/30 fiscal year end. Plan terminated 6/30/2017.
- Participant balances were rolled or distributed by prior record-keeper by 12/29/2017
- March 2018, it was determined that the contribution for plan years ended 6/30/15, 16, 17 may have been understated due to an error in the definition of compensation used.
Questions: - Generally - how does this get unscrambled? The prior accounts have been closed, the prior plan has been terminated, however, prior participants may be eligible for additional contribution.
- Does the corrective contribution need to go through old plan record-keeper? Can they participants receive the contribution via check? If check - would this be considered cash distribution
- Any looming deadlines for the
contribution to be made?
Any and all thoughts welcomed.
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