Message Boards Digest

February 7, 2019

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

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Pri created a topic in Plan Terminations

Plan Termination and 'Guardian' Plan

A client is terminating a 401K plan. There will be a spin off -- part of the participants from the terminating plan will be moved into a "guardian plan." Any idea what a guardian plan is and will this impact the termination in any way?
Number of replies posted  1 reply      Number of times viewed  34 views      Add Reply

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bzorc created a topic in 401(k) Plans

Correct Excess Annual Additions by Transferring to Forfeitures Account?

During the course of an audit, it was determined that an incorrect amount of compensation was used for the owners of an S-Corp. (Payroll records showed a gross amount of wages, but one of the line items was for "reimbursements", which was not reported on the owners' W-2s.) Therefore all of them had excess annual additions (both for a Safe-Harbor nonelective contribution and discretionary employer profit sharing contribution) for 2017. The plan sponsor wishes to correct this error by removing the excess (and associated earnings) from each owner and transferring it to the plan forfeiture account, to use in reducing future employer contributions. I believe this be done as a self-correction, after reading the IRS Fix-it Guide. But a complicating matter here is that one of the owners left in 2018 and rolled over his account balance into an IRA. Technically, I believe, he has an excess IRA contribution subject to excise tax until it is removed from the IRA account. The plan sponsor does not wish to inform the owner of that. The amount was around $4,000, so I don't know if it's material enough to warrant pursuing further with the former owner. Any comments on the above would be helpful, thanks!
Number of replies posted  8 replies      Number of times viewed  61 views      Add Reply
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ldr created a topic in Retirement Plans in General

Participant Turns 70-1/2 in 2019 -- OK to Take First RMD During 2019?

John will turn 70-1/2 on July 7, 2019. Although he could delay until April 1, 2020, he wants to take his first RMD in 2019. Must he be 70-1/2, thus taking his first RMD after July 7, 2019, or is any date in 2019 OK (e.g., tomorrow)?
Number of replies posted  2 replies      Number of times viewed  46 views      Add Reply
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AlbanyConsultant created a topic in Multiemployer Plans

Delinquent Money Purchase and After-Tax Contributions -- Who's Responsible?

A Taft-Hartley plan has asked us to opine as to late deposits of employee after-tax contributions and possibly the money purchase contributions. The union is working with the plan auditor to chase down the late amounts. Is there a potential situation where the union itself is on the hook for these amounts?
Number of replies posted  0 replies      Number of times viewed  13 views      Add Reply
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M Norton created a topic in Cross-Tested Plans

Cross-Testing a 401(k) Plan: Which Interest Rate and Mortality Table?

When cross-testing a 401(k) plan, we have always used an interest rate of 8.5% and the UP-1984 mortality table. Are those still the best choices or are others recommended?
Number of replies posted  2 replies      Number of times viewed  31 views      Add Reply
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Retirement Geek created a topic in 403(b) Plans, Accounts or Annuities

Safe Harbor Plan Can Have Different Eligibility for Deferrals Than for Matching Contributions?

Can a safe harbor 401(k) plan impose different eligibility requirements for deferrals than for match?
Number of replies posted  2 replies      Number of times viewed  39 views      Add Reply
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cpc0506 created a topic in 401(k) Plans

Fixing Premature Distribution via Retroactive Amendment to Definition of Normal Retirement Age

Client paid out a participant in 2018 who had terminated employment after age 65. Problem: NRA in the plan is the later of age 65 or the 5th year of participation. Employee only had 4 years of participation at termination. She terminated one week after reaching age 65. Employer doesn't want to ask for return of the otherwise non-vested funds. Can the employer adopt a retroactive amendment to change the NRA to 65 (with no 5th year of participation condition)?
Number of replies posted  5 replies      Number of times viewed  56 views      Add Reply
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Sixers created a topic in 401(k) Plans

Plan Must Exclude Part-Time Employees If Employer Won't Ever Have Any?

Does plan document with a three month eligibility specifically have to exclude part-time employees if the company will not ever have any? Or can it be left blank because it is a moot point?
Number of replies posted  1 reply      Number of times viewed  38 views      Add Reply
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pmacduff created a topic in Form 5500

DOL Letter to Client Says 5500 Defective Because No Audit Attached, But DOL Web Site Says Otherwise

Client received a EBSA letter today that the Plan's 2017 5500 form filing was rejected for lack of the Accountant's opinion. I went on the EBSA website and the filing is there and contains the correct forms and Accountant's report. The letter tells the client to file an amended filing including the report and then notify them that the amended filing has been posted. Anyone else hear of such a thing?
Number of replies posted  1 reply      Number of times viewed  26 views      Add Reply, Inc.
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