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Message Boards Digest

December 17, 2018

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

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401_noob created a topic in Distributions and Loans, Other than QDROs

Withholding on Required Minimum Distributions: What's the Default?

Question for my fellow admins. I know that 10% withholding is required on RMDs, but in practice do you withhold 10% unless the participant completes a W-4P, or do you process the RMD with no withholding unless the participant tells you otherwise?
Number of replies posted  3 replies      Number of times viewed  46 views      Add Reply
 
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Vlad401k created a topic in 401(k) Plans

In-Service Distribution from Partially Vested Account: A Protected Benefit, Right or Feature?

Let's say a plan has an in-service distribution option for matching and non-elective contributions. A plan previously did not require participants to be 100% vested to take an in-service distribution from these sources. Can a plan be amended to allow in-service from these sources only if the participant is 100% vested?
Number of replies posted  3 replies      Number of times viewed  53 views      Add Reply
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tomres created a topic in 401(k) Plans

My 401(k) Account: No Notice Given to Me About Blackout Period and Transfer

My 401k plan was transferred to another company and is now in the blackout period. I had left the company 6 months ago but I am still a participant. I had planned to move it to an IRA. I also have more than a half million in the plan. The only way I found out is that another former employee was trying to get into his account and was locked out. It looks like that the company's 401k administrator did not notify and give notice to any past employees in the plan. I called my former employer's HR person and was told they have all my contact info and I should have received an email in October. I had told her I did not receive anything and told her at least one other had not received any email or any other correspondence concerning the transferring our 401k plan to another company. While on the phone the owner of the company overheard our conversation and told the HR person that she will have to get back to me. Two minutes later I get an email from the company's 401k administrator showing an October 26 email giving the info of the 30 days notice and the black out period. FYI -- all the employees were removed from the email chain and confirming that I did not receive it at that time. It is now in the blackout period. I called the new 401k company (Fidelity) and was told they could see I have zero balance but were having issues registering me to have a new account set up. They also said they could not give me any info since they are in the middle of the blackout period that started in late November. I made calls to two other past employees and were told they did not get notice either. I have calls into the old 401k company to see if I can find out what was my final balance when they transferred it over to fidelity. If I had known I certainly would not have allowed this to happen without changing things up. I know they still have not given any info to the past employees that also did not receive any notices also. I think they are concerned it will open up a can of worms. What recourse do I have if I lose money during this transition? What are my rights?
Number of replies posted  7 replies      Number of times viewed  70 views      Add Reply
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DPSRich created a topic in 401(k) Plans

Convert a Profit Sharing Plan to Be a Roth Profit Sharing Plan?

Can an employer convert an existing Profit Sharing Plan to a Roth Profit Sharing Plan? No 401(k) deferrals, possibly Profit Sharing contributions.
Number of replies posted  5 replies      Number of times viewed  66 views      Add Reply
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Dougsbpc created a topic in Cross-Tested Plans

Q About an Application of the General Test

Suppose an employer sponsors a 401(k) plan with a 25% match (non-safe harbor). This plan will fail the ADP and ACP tests for 2018. They will refund to HCEs. They want to adopt a Cash Balance Plan and a Profit Sharing Plan for 2018. The 401(k) plan, Cash Balance Plan, and Profit Sharing Plan all pass 410(b) on their own using the ratio percentage test. All of the same employees will benefit in each plan. For 401(a)(4) and Top Heavy, can the 401(k) plan be tested on its own and the Cash Balance Plan and Profit Sharing Plan be tested together? Or must all 3 be tested together?
Number of replies posted  2 replies      Number of times viewed  36 views      Add Reply
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austin3515 created a topic in 403(b) Plans, Accounts or Annuities

TAMRA Plans

These things are the best hidden topic I think I have ever seen. Does anyone have an article that talks about how these work? I can't find anything in the regs. The EOB doesn't mention them. In general I know they are mandatory employee contributions as a condition of employment, which the IRS treats as employer contributions. Do I have the long and short versions of it just about right?
Number of replies posted  1 reply      Number of times viewed  31 views      Add Reply
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austin3515 created a topic in 457 Plans

Terminating a 501(c)(3) Employer's 457(b)

Assuming the top-hat exemption was filed with DOL when the plan was established, is there a requirement to notify them of a termination?
Number of replies posted  1 reply      Number of times viewed  19 views      Add Reply
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Karoline Curran created a topic in 401(k) Plans

Participant Cashed Out with Incorrect Vesting

A participant had an account at Morgan Stanley. His vested account balance was less than $200 so the client, after many tries, had him cashed out; however, despite many emails from me to Morgan Stanley that he was only 20% vested, they cashed him out at 100%, so he got around $800 too much. It's a 10/31 plan year and I only discovered this last week when I did the valuation and looked at his March statement. Is there any recourse? Pretty sure the participant is not going to give the money back and the client has since moved the funds to Charles Schwab, so this person doesn't have an account at CS.
Number of replies posted  3 replies      Number of times viewed  47 views      Add Reply
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C. B. Zeller created a topic in Plan Document Amendments

Retroactive Amendment After Restatement

The effective date of a restatement is generally the first day of the plan year in which the restated document is adopted. However a retroactive amendment, particularly an -11(g) amendment, can be effective back to the first day of the prior plan year provided it is adopted in time. For example, you could adopt a restatement in April 2019, effective 1/1/19, then adopt a corrective amendment in September 2019 effective 1/1/18. Are there any issues with adopting an amendment with an effective date prior to the effective date of the document being amended?
Number of replies posted  1 reply      Number of times viewed  22 views      Add Reply
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