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BenefitsLink
Message Boards Digest
August 14, 2018
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Here are the most recently added topics on the BenefitsLink Message Boards:
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ML68 created a topic in 401(k) Plans
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?
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jgoodwin created a topic in Mergers and Acquisitions
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?
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David Peckham created a topic in IRAs and Roth IRAs
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?
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thepensionmaven created a topic in Retirement Plans in General
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?
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austin3515 created a topic in 401(k) Plans
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?
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