Message Boards Digest

March 29, 2018

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

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Young Curmudgeon created a topic in Retirement Plans in General

Bonding Required If All Participants Are Trustees?

I have inherited a plan which has been historically told they do not need a bond since all the participants (four in total) are Trustees. I do not see an exclusion from the bonding requirement for this situation. Only three of the Trustees are owners and the plan files full 5500 due to non-qualifying assets. The bonds I have seen do not cover Trustee benefits in the event of a loss so is this the roundabout logic? Since none of them are protected by a bond, they do not need the bond? If the plan were 100% qualifying assets, I would not be concerned. However, it is 70% non-qualifying assets. If they are not exempt from bonding, they will have to get an auditors opinion if caught.
Number of replies posted  2 replies      Number of times viewed  47 views      Add Reply

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mjf06241972 created a topic in 401(k) Plans

Payroll Periods -- How Do They Affect Entry Date under 401(k) Plan?

What is the rule on employees enrolling in a 401k? For example, a plan has a July 1 entry date and the payroll is July 1. Can an employee hand in an enrollment form on July 5 for the next payroll? Or is it a hard cut-off date of July 1 and they must wait until the next entry date?
Number of replies posted  4 replies      Number of times viewed  44 views      Add Reply
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scarabrad created a topic in Retirement Plans in General

403(b)/401(k) Aggregation: New Rules?

SpiritRider... you've chimed in on this issue time after time and have been very helpful with respect to this issue of aggregating 403(b) contributions with non-affiliated group retirement plans. Do the details in the article at the URL shown below change the rules somewhat, such that there is no longer concern about having to aggregate the total employee + employer limit for a 403(b) participant? In prior discussions, you have stated that I am considered an "owner" of my hospital-based 403(b) plan and, as such, would be limited with respect to solo-401k contributions I could make from my side income to a total of $55,000, due to aggregation rules. Does this no longer hold true?

Number of replies posted  3 replies      Number of times viewed  36 views      Add Reply
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dan.jock created a topic in Retirement Plans in General

Family Attribution: Fun with the More-Than-50% Rule?

Ownership is attributed between parents and adult children if the ownership percentage of one is greater than 50% ( at page 12). Dad owns 100% of a business with 50 employees. He starts a 50/50 partnership with his son and takes some clients there. He's smart enough to keep the entities very separate in the clients they serve, maybe even a different line of business. Assuming the comp is there to support it, Dad has big qualified plan contributions in the side business. Because it's less than 80% common ownership, it's not a controlled group and he doesn't have to cover his 50 employees. This seems like a scenario ripe for abuse. Where's the catch?
Number of replies posted  1 reply      Number of times viewed  37 views      Add Reply
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mwyatt created a topic in Retirement Plans in General

Deductibility of 2 Years of Contributions in One Year

Calendar year client. Let's say profit sharing contribution for 2017 is $190,000 which will be deposited into the Plan's trust in 2018. Similar deposit to be made for the 2018 plan year. Issue: while they want to make the actual deposit of $190,000 for 2017, they do NOT want to deduct on the 2017 corporate tax return, but rather deduct the 2017 and 2018 on the 2018 return. They did put the 2017 corporate return on extension, so the thinking of "they made it within the ordinary time but filed the return before depositing" doesn't work. What are the issues here (would combined 2017 and 2018 amounts be subject to the 2018 section 404 25% limit solely on 2018 compensation, for example)?
Number of replies posted  1 reply      Number of times viewed  41 views      Add Reply
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JMH ERISA created a topic in Form 5500

Wanting to Create a 8955-SSA File for FIRE System without Purchasing Comprehensive Software Package

I have an ERISA 403(b) plan client who has asked for help filing Form 8955-SSA, and they are subject to the electronic filing requirement for this return (must submit via the FIRE system). I know how to prepare this form but it is not one of my normal services through my consulting business so I don't have the software to create a properly formatted file that I could then submit via FIRE. I can't seem to find any software to create the file that isn't part of a large (costly) subscription or package. Is it possible to create a file without such software? I found the parameters provided on the IRS website, and it seems difficult.
Number of replies posted  1 reply      Number of times viewed  31 views      Add Reply
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austin3515 created a topic in 401(k) Plans

Mid-year Amendment to a Safe Harbor Plan

Based on IRS Notice 2016-16, I can amend a plan to exclude certain items of compensation? I will send out an SMM at least 30 days in advance, but because the definition of comp is not required safe harbor notice content, I probably don't even need to do that. Correct?
Number of replies posted  20 replies      Number of times viewed  117 views      Add Reply
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Gilmore created a topic in Qualified Domestic Relations Orders (QDROs)

Does Alternate Payee's Account in Solo 401(k) Mean Form 5500 Now Required?

Owner-only 401(k), assets under $250k, has not filed 5500s. Owner in the process of divorce, anticipating a QDRO. If the plan document allows the ex-spouse to establish an account in the plan and leave the funds in the plan, would I be correct that the plan is no longer a solo 401k and would require a 5500? What if the ex-spouse wants and gets a distribution of the funds, but it takes 30 or 60 days to do so -- does that period of time require that a 5500 be filed?
Number of replies posted  1 reply      Number of times viewed  35 views      Add Reply
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ERISAAPPLE created a topic in 401(k) Plans

Exclusion of Compensation for Safe Harbor Purposes After Becoming an Ineligible Employee Mid-Year

I know I can exclude pre-participation compensation from the safe harbor contribution. What about post-participation compensation where the employee moves in the same plan year to a position that is not an eligible employee? For example, an employee is hired in a non-union position, enters the plan in 2018, and then later in 2018 moves to a union position that is not eligible for the safe harbor. Can the compensation paid to the employee after the employee moves to the union position be excluded? To phrase the more question more precisely (since everyone is going to ask what the plan says), can the plan provide for such an exclusion (assume all the notice requirements and other requirements of safe harbor are met). I read the regs to say the comp can be excluded, but I have just never seen this before.
Number of replies posted  3 replies      Number of times viewed  30 views      Add Reply, Inc.
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