Message Boards Digest

March 16, 2018

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

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jim241 created a topic in Defined Benefit Plans, Including Cash Balance

Purchase of an Annuity with X% Surrender Charge -- A Solution to Section 415 Problem?

Cash balance plan provides an annual benefit to the owners (HCEs) that's more than the section 415 limit. If their benefits are limited, could the plan buy each of them an annuity with a X% surrender charge? The idea is to make the taxable distribution effectively identical to the 415 limit. The annuity would be transferred to them for conversion to an IRA after IRS approval was received. We would offer this identical distribution to the other participants. Thoughts?
Number of replies posted  8 replies      Number of times viewed  95 views      Add Reply

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Belgarath created a topic in Retirement Plans in General

Executor's Duties with Respect to Sole Proprietor's Terminated Retirement Plan

Sole proprietor dies. Has a small 401(k) plan. All assets are distributed to the beneficiary. Plan document is up to date. Final 5500 is properly filed. Form 1099 is issued to beneficiary. Does the estate's executor have any duties with regard to filing anything further with regards to this plan or the distribution, such as forms or other paperwork?
Number of replies posted  6 replies      Number of times viewed  47 views      Add Reply
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Scuba 401 created a topic in Retirement Plans in General

'Substantial and Recurring' Contributions to a Profit Sharing Plan

Recently the IRS flagged one of our plans for this issue on audit. They want to take it into CAP and claim it's a qualification issue. The only issue I see is that participants would need to be vested. If there is only one participant, what is the real legal issue that could force the plan into CAP? Seems harsh! Anyone have any experience with this issue? I have noticed some earlier threads that quote the IRS manual saying that, other than vesting, there is no practical consequence -- but that section seems to have disappeared from the manual.
Number of replies posted  5 replies      Number of times viewed  59 views      Add Reply, Inc.
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