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Message Boards Digest

August 14, 2018

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

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ML68 created a topic in 401(k) Plans

Top Heavy Minimum Contribution Rules Apply to Plan Having Only HCEs?

We're a small business with 4 people, all related to the owner. Because we do not have any employees who are "non-highly compensated employees" under IRS rules, are we exempt from any sort of top heavy requirements?
Number of replies posted  10 replies      Number of times viewed  173 views      Add Reply
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jgoodwin created a topic in Mergers and Acquisitions

Mid-Year Merger of Volume Submitter Plan into a Multiple Employer Plan

I have a client who was the sponsor of a VS 401k plan. They elected to to join a MEP available through their HR services company. The original 401k plan was amended to suspend all contributions effective 4/30/2018. The adoption of the MEP was effective 5/1/2018. The MEP was set up to mirror the existing plan (basic 401k subject to ADP). To the employees it essentially was only a change in how their assets are invested. All participant accounts will be merged from the old investments to the new. With regards to compliance testing, we're getting pushback from the MEP administrator regarding whether one set of compliance tests applies, vs. two compliance tests. I don't see any reason why the plans would be tested separately -- it's one employer who is the sponsor of both plans. A separate filing for the original plan will be required until the assets are fully merged to the new but is there a reason why separate testing must be performed?
Number of replies posted  2 replies      Number of times viewed  39 views      Add Reply
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David Peckham created a topic in IRAs and Roth IRAs

Rolling Over a Non-Qualified vs. Qualified Distribution from a Designated Roth Account to a Roth IRA

Client executed an in-plan conversion of employer PS account to a designated Roth account on December 30, 2014. QDRO now authorizes 1/2 of that designated Roth account to go to ex-spouse. Ex-spouse has never owned a Roth IRA. Ex-spouse now elects a direct rollover from the plan to a newly-established Roth IRA. Client and ex-spouse are both age 70, so the 10% penalty is not a concern. The only concern is whether all earnings (and the earnings are substantial since 2014) are tax-free or not. [1] How does the 5-year holding period apply to Roth IRA assets that originate from a transfer that would have been non-qualified if it had not been a direct rollover from the plan to the ROTH IRA? [2] Suppose that the direct rollover does not occur until January 2, 2019. How does the 5-year holding period apply to Roth IRA assets that originate from a transfer that would have been qualified if it had not been a direct rollover from the plan to the Roth IRA?
Number of replies posted  0 replies      Number of times viewed  23 views      Add Reply
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thepensionmaven created a topic in Retirement Plans in General

LLP 'Income' for Contribution Calculation

An accountant we deal with forwarded his client's P&L for 2017. There are 2 partners. Wouldn't each partner's contribution be based on net ordinary income plus guaranteed payments?
Number of replies posted  1 reply      Number of times viewed  40 views      Add Reply
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austin3515 created a topic in 401(k) Plans

EPCRS Correction / Missed Match

Plan has immediate eligiblity for 401k but a 1-year wait for the match. For example, Employee A was rehired after being gone for just a year and was eligible for the match prior to leaving. The client thought that they had re-satisfy the match eligibility so they did not provide them with the match as they should have. They did provide them with the ability to make 401k contributions. So clearly someone who made 401k contributions would need to receive the match because they were eligible. But what about those who did not contribute? The employees were told they needed to resatisfy the 1 year wait for the match, and it is therefore conceivable that they decided not to participate based on their understanding that they were not eligible for the match yet anyway. Should we assume they had some contributions and provide them with a missed match correction?
Number of replies posted  5 replies      Number of times viewed  64 views      Add Reply
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