Message Boards Digest

July 23, 2018

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

Author's photo

With Appreciation.... created a topic in 401(k) Plans

Wrong Year Appeared in the Safe Harbor Notice That Went Out to Participants: How to Fix?

Scenario: The safe harbor notice went out at the correct time prior to 2017 (November 2016). The information in the safe harbor notice was correct within the notice EXCEPT the notice was to apply to 2017, but the notice stated that it "applies to the plan year beginning 1/1/2016." In all other ways, other than the Plan Year identification, the information was correct. Can this be considered a typo/mistake of fact so that 2017 can be tested as a safe harbor plan? Should this be self-corrected by providing all the participants who should have received the notice stating for plan year beginning 1/1/2017 with a corrective employer contribution? Most of the employees are already making elective deferrals.
Number of replies posted  9 replies      Number of times viewed  87 views      Add Reply

Findley Davies | BPS&M is now Findley

Sponsored by Findley
We make the complex world of retirement, benefits, human capital and M&A simpler for organizations across the nation. Learn how!
FINDLEY is: Flexible, Innovative, Nimble, Dynamic, Loyal, Experienced and integritY
Author's photo

TaxLawyer1978 created a topic in Retirement Plans in General

Money Purchase Plan: Any Restrictions on Investments?

Are there any restrictions on what types of investments can a money purchase plan invest in? Can you loan money out of the plan if it's for investment purposes and not for extraordinary circumstances?
Number of replies posted  1 reply      Number of times viewed  36 views      Add Reply
Author's photo

Brett created a topic in 401(k) Plans

Question About Plan Administrator's Handling of My 401(k) Account After Loan to Me

I had a 401(k) balance of $58K but have an outstanding loan of $10K so the balance that shows up is now $48K. I've been paying it back and all that. I took it out to pay high interest credit cards. I have just resigned. I know I will have it taxed as income and all that, plus a 10% penalty. My question is regarding the balance of the 401(k). It's $48K, correct? They won't reduce it by another 10K to "repay" the loan, will they? It seems like a silly question but I'm not good at this.
Number of replies posted  4 replies      Number of times viewed  60 views      Add Reply
Author's photo

tdslaw created a topic in Employee Stock Ownership Plans (ESOPs)

Questions About RMDs and Other Distributions from an ESOP

Client is a participant (employee) in a ESOP which holds 100% of the "employer securities" of the Plan Sponsor corporation (employer). The client is almost 70 years of age, is currently employed and plans to work for the corporation until age 75 (W-2 income). The client-employee is presently inquiring about approaching RMD requirements. We are informed that if the client-employee continues to be employed beyond age 70-1/2, then RMD distributions are not required until retirement. We are also informed that if the client-employee is a "5% owner", then the exception deferring RMD distributions until retirement may not apply. We are also informed that for purposes of determining the "5% owner" rule of the plan sponsor, the employer securities held by the ESOP are not used in determining the "5% owner". Is this correct? Could you share any legal citations?

Also, under the terms of the ESOP, the client-employee-participant can be offered a partial or lump-sum distribution of the employer securities (e.g. annually) which, if elected, is distributed to the participant by the ESOP as employer securities under a "repurchase-buyback" provision required by the plan sponsor that buys back the distributed shares, resulting in the retirement income to the participant (1099-R). Can the client receive both W-2 income and 1099-R distributions beyond age 70-1/2 as long as he is still employed?

Number of replies posted  3 replies      Number of times viewed  38 views      Add Reply
Author's photo

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

After the Tax Cut Jobs Act: Time to Rethink Asset Reversions?

I suppose the maximum tax rate on the federal level for reversions to a corporation is now 71%. Is that enough to re-think reversions?
Number of replies posted  0 replies      Number of times viewed  17 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