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Message Boards Digest

May 28, 2018

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

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Erica23 created a topic in Cafeteria Plans

How Would a 2% Shareholder Be Enrolled in a 125 Plan?

I thought it was common knowledge that 2% shareholders cannot enroll in a 125 plan? I read that if a 2% shareholder is enrolled, it can cause issues for the plan. Does anyone have any practical experience how this is handled? How would this have happened?
Number of replies posted  4 replies      Number of times viewed  56 views      Add Reply
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GregH created a topic in 401(k) Plans

401(k), SEP and 457 Plan Coordination of Benefits Limits

Individual over 50 yrs old was a participant in a 401(k) plan for part of the year and put $22,500 into Employer 1's 401(k) plan. Individual then changes jobs and now qualifies to contribute to a 457 plan with Employer [2] Individual plans on maxing out contribution to Employer 2's 457 plan with $24,500 for 2018. Individual has a side job of rehabbing houses via a single member LLC (with no employees) and earned $300,000 there. Individual want to max out and contribute $55,000. It appears that Individual can contribute the $22,500 to the 401(k), the $24,500 to the 457, and the full $55,000 to the SEP for a total deferral to the three plans of $102,000. I have never heard of circumstances similar to this and want to see if anyone has more insight into a provision limiting the deferrals for the three plans that I am missing. This appears to be permissible.
Number of replies posted  1 reply      Number of times viewed  18 views      Add Reply
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