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Message Boards Digest

January 3, 2019

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

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With Appreciation.... created a topic in Defined Benefit Plans, Including Cash Balance

Non-Taxable Contributions Mistakenly Reported on 1099-Rs

We are the TPA. Just discovered that for several years retired participants have received incorrect 1099-Rs. Specifically, the 1099-Rs have included non-taxable contributions in the amounts reported. For some, the 1099-Rs have been incorrect for at least 10 years. There are at least two immediate concerns: How far back is it necessary to provide corrected 1099-Rs for amended tax purposes? What is the EPCRS VCP-correction method that would be acceptable to return after-tax credits to the affected participants? (I've scrutinized EPCRS but can't locate the applicable section.)
Number of replies posted  3 replies      Number of times viewed  42 views      Add Reply
 
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austin3515 created a topic in 401(k) Plans

Amnending SH Plan AFTER SH Notice Distributed

Plan distributed the Safe Harbor Notice for 2019 in November 2018 indicating the Safe Harbor Match would be made. The Employer loses a big customer on December 15, 2018 and on that date they call us to discontinue the Safe Harbor effective 1/1/2019. Are there any timing restrictions, considering that the notice already had been distributed? Could the plan have been amended on December 15, 2018 to eliminate the safe harbor for ALL of 2019? Or was there some form of a 30 day notice required?
Number of replies posted  11 replies      Number of times viewed  71 views      Add Reply
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austin3515 created a topic in 401(k) Plans

Loan Offset / Repayment Under New Rules

Participant terminates in May 2018 with a $10,000 loan. Participant has until the due date of their 2018 1040 to repay the loan to avoid the taxes under the new tax rules. Question is, if that participant does NOT close his or her account, can they re-contribute the $10,000 to this plan if it is past the grace period? Our plans typically do not allow former employees to execute rollovers, which I think technically this would be. Thoughts?
Number of replies posted  3 replies      Number of times viewed  48 views      Add Reply
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BG5150 created a topic in Retirement Plans in General

Seperate Vesting on Each Year's Profit Sharing Allocation?

We have a company that would like to have each year's profit sharing contribution be applied to a separate vesting schedule. It would be a 4-year cliff vesting schedule. Assume not top heavy. It would look something like this: 2019 contribution fully vests in 2023. 2020 contribution fully vests in 2024. 2021 contribution fully vests in 2025, etc. I don't think this is possible due to the minimum vesting standards. For example, someone hired in 2019 has 4 years service in 2023, so the 2020 contribution would need to be 100% vested for that person in 2023, not 2024. Is there any way around that?
Number of replies posted  5 replies      Number of times viewed  51 views      Add Reply
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EBECatty created a topic in 401(k) Plans

Failure to Allocate Transferred DB Assets - 4980 Reversion?

A 401(k) plan received transferred assets from the plan sponsor's terminated DB plan. The 401(k) plan has standard provisions allowing the sponsor to allocate, but at least as fast as the seven-year requirement under section 4980. The assets were put into a suspense account but were never allocated. Still within seven-year period but 401(k) plan is now terminating. VCP does not allow correction/relief specifically from 4980 reversion tax. Thoughts on whether to attempt VCP based on an "operational error" (i.e., failure to allocate as required by the plan) vs. allocating prior years now (plus plan termination allocation) and filing 5310?
Number of replies posted  0 replies      Number of times viewed  17 views      Add Reply
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