Message Boards Digest

May 17, 2018

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

Author's photo

Mgh48 created a topic in Correction of Plan Defects

Corrective Amendment After Plan Submitted for Favorable Determination Letter

A plan was submitted for a favorable determination letter. IRS found a problem with the date on which a participation agreement was signed. We amended to change the company name and EIN, but the date signed conflicts with the prior agreement. Can a plan be retroactively amended to correct this type of error once the plan has been submitted?
Number of replies posted  2 replies      Number of times viewed  36 views      Add Reply
[Advert.] -- Get Help with All of your Form 5500 Questions

Sponsored by Burrmont Compliance Labs LLC
"ASK THE AUTHOR" Personalized help for all of your tough 5500 questions in 4 business hours from noted author and speaker S. Derrin Watson, J.D. Including any supporting schedules: 8955-SSA,1099-R, 5330 and more). Sign up or email
Author's photo

shERPA created a topic in Retirement Plans in General

Private Sector Employer But Most Employees Covered by a Governmental Plan

A private sector employer is looking to establish a qualified plan or plans. In gathering data, we've learned that most of the employees are covered by the state's retirement plan, even though they are employed by a private employer. This is a result of a state law and lobbying by public sector unions, so it is what it is, even if it doesn't make any sense. These employees are not unionized. IRS was asked about this 3 years ago WRT Social Security and opined that as private sector employees they are covered by SS and the IRS noted that they are not eligible for the state plan under the IRC, but that any correction for this would have to be handled by the state, as the private sector employer has no choice but to comply with state law. AFAIK the state is not pursuing any such correction and the situation still exists. So under Section 410, what do we do with all these employees who are covered by a government plan? They don't meet any of the 410(a) statutory exclusion. Since government plans are generally exempt from 410 (per 410(c)), it doesn't appear that we can permissively aggregate the government plan with a private sector plan for purposes of coverage and benefits testing. My only conclusion so far is that they would have to consider all of these employees in all testing for 401(a)(4), 401(a)(26) and 410(b), and perhaps cover some of all of them as necessary to pass the tests without regard to the government plan at all. Any other ideas on this?
Number of replies posted  0 replies      Number of times viewed  22 views      Add Reply
Author's photo

coleboy created a topic in SEP, SARSEP and SIMPLE Plans

Company with 401(k) Buys Company with SIMPLE IRA

Client currently has a 401k plan. It has just acquired a company with a SIMPLE IRA. It is my understanding that SIMPLE IRA's cannot be terminated during the year. But what if the company is sold? Must the new company allow the employees to continue their contributions to the SIMPLE IRA? And so they continue the acquired company's employer contribution? The 401k plan has a 1 year eligibility requirement. Not sure if original hire dates are being kept so employees under the acquired company may or may not be eligible for the 401k yet.
Number of replies posted  2 replies      Number of times viewed  38 views      Add Reply
Author's photo

RGALVIN64 created a topic in Retirement Plans in General

Lose My QDRO from Pension Plan Because Ex-Spouse Now Reemployed by Plan Sponsor?

I was awarded a QDRO during my divorce and at the same time my ex-husband was retiring. Now, five years later, he is returning to work for his former employer. They won't let him get pension payments while he is a full-time employee. So do I lose my court-ordered QDRO?
Number of replies posted  2 replies      Number of times viewed  36 views      Add Reply
Author's photo

CEW created a topic in 401(k) Plans

Profit Sharing Contributions for Staff Go into Owner's Account Instead

I have a plan with one owner (a dentist) and 5 participants. Each year they do a profit sharing and a safe harbor contribution. Each participant receives his or her own statement and cannot self-direct investments. The dentist prefunds the profit sharing and safe harbor contributions during the year by depositing the funds into his own account. Every other year, it seems, they fail to transfer the participants' profit sharing and safe harbor amounts out of his account. The participants are clueless. Meanwhile, the owner is getting an unfair advantage as fair as gains. I have tried telling them they need to prefund it into a plan checking account, not into the owner's account, but so far they are ignoring me.
Number of replies posted  5 replies      Number of times viewed  58 views      Add Reply, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2018, Inc. All materials contained in this mailing are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe | Privacy Policy