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Message Boards Digest

July 13, 2018

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

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K2retire created a topic in 401(k) Plans

Spin-Off of Participating Employer

We have a QACA plan for a controlled group. One of the participating employers would like to spin off into a different plan in the middle of the plan year. The controlled group status is not changing. They have assured us that the new plan will have identical provisions. (Although I'm skeptical that they won't add something.) The receiving plan is part of a MEP. Notice 2016-16, III D 2 is very clear that you can't do a mid-year amendment that reduces the number or group of eligible employees. Our plan would obviously be reducing the group of eligible employees. However, because those employees are continuing to be eligible in a plan sponsored by the same employer with identical provisions, a co-worker believes it would be OK to do. Is that correct? Regardless of timing, we plan to write the amendment to transfer the balances of the impacted employees to the new plan at the time of the spin off. Going forward, if they have employees who move between companies, I don't believe those employees will have a distributable event in the plan they are leaving. Is there a way to write something into the spin-off amendment to allow the balances to move between plans for transferring employees? Do we have a benefits rights and features issue due to different investment line-ups?
Number of replies posted  2 replies      Number of times viewed  45 views      Add Reply
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Jen Wallace created a topic in 401(k) Plans

Only Assets Left Are Forfeitures; How Many Participants for Form 5500 Purposes?

If a terminating plan has only a forfeiture balance as of the end of the plan year and no active participants, how would you record the participant count? Ordinarily I would not count the forfeiture account as a participant but am wondering if a participant count of zero would raise a red flag.
Number of replies posted  2 replies      Number of times viewed  50 views      Add Reply
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401_noob created a topic in Distributions and Loans, Other than QDROs

Request for Distribution to Prevent Eviction

I have a unique hardship request to prevent eviction. Apparently the lease contract states that the tenant has a limited amount of time to notify the property owner of issues that need repair and if that amount of time expires the tenant is responsible for repairing the dwelling. Now the owner of the property is trying to evict the tenant/participant for neglecting to notify the owner of needed repairs, so the owner is saying pay to have the repairs done or get out. Is this a valid hardship request? On the surface it's to prevent eviction, but it's also to repair a property that doesn't belong to the participant.
Number of replies posted  1 reply      Number of times viewed  44 views      Add Reply
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lori.neal14@gmail.com created a topic in Retirement Plans in General

First Wives Club: Beneficiary's Responsibility to Return Overpayments

My sister's husband passed away unexpectedly a few months ago. They were married for 20 years. He divorced his first wife after 15 years of marriage. During the first marriage, he was receiving disability. Later determined that he was being overpaid. About $300 was being deducted from his retirement for the repayment. My sister recently received a letter stating she is now responsible for the remaining balance of the overpayment. Today she was told that, because his first wife was married to him for more than 10 years, the first wife also is entitled to his benefits. If that's true, is the first wife responsible for the overpayment as well as my sister?
Number of replies posted  1 reply      Number of times viewed  42 views      Add Reply
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