Message Boards Digest

February 26, 2019

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

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Fielding Mellish created a topic in Distributions and Loans, Other than QDROs

Participant Submits Hardship Distribution Request, Has Two Reasons

Plan document says a participant can get a hardship distribution for the safe harbor reasons. Participant submits documentation for medical expenses (say $1,000) and also to prevent foreclosure (say $10,000). Asking for $11,000 in one distribution to cover both. Is that permissible? Assume the plan language doesn't speak to that.
Number of replies posted  1 reply      Number of times viewed  40 views      Add Reply

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Theresa created a topic in 401(k) Plans

Handling a 401(k) Plan When the Sponsoring Dental Practice Is Sold

We have a client who has maintained a plan for well over 30 years and passed away last week. He was the trustee. He owned a dental practice. Another dentist was renting space from him and served his patients while he was ill. This dentist will be buying the assets of the practice. Can the plan be sold with the practice and the new dentist become the successor sponsor?
Number of replies posted  3 replies      Number of times viewed  57 views      Add Reply
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TPApril created a topic in 401(k) Plans

Can Plan Sponsor Make a Loan to a Plan?

One-person plan, invested in illiquid assets. There is no cash (annual contribution is paid out annually as RMD). Some kind of payments were due on the real estate holdings (taxes maybe) so the Plan Sponsor put money into plan, separate from annual contribution, and then paid the expenses out of the plan. Owner has informed us of this and that she treats the money as a loan to the plan, although no loan documents were ever set up and no interest payments back to owner ever made. What to do now?
Number of replies posted  4 replies      Number of times viewed  55 views      Add Reply
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RWPHoenix created a topic in 409A Issues

Failure to Credit Employer Non-Elective Contribution to Nonqualified Plan

I have a situation in which an employer's NQ plan should have credited its COO's fully vested NQ plan account with a significant amount of employer non-elective contributions over the last 5-6 years. COO is still working for the taxable employer and the crediting failure doesn't impact how or when the non-elective amounts, once credited, will ultimately be paid to the COO. Client would like to credit all the past-due amounts into the COO's account in 2019. It seems like a 409A violation but I'm having trouble identifying the violation because the error doesn't involve an employee deferral election or the timing or form of benefit payment. However, the error means that Form W-2s issued to the COO showed the wrong amount of FICA wages each year. Does the error violate 409A? How could it be corrected?
Number of replies posted  8 replies      Number of times viewed  35 views      Add Reply
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cpc0506 created a topic in 401(k) Plans

VCP Issue: Never Signed a Plan Document?

Solo-k client is moving assets from one Investment Company to another. The new Investment Company requires that a client use their AA (which is a service that we offer). So, our firm was asked to restate the plan onto our document. The advisor says the plan was effective 1/1/2014. We always ask for the prior AA for compliance and mapping purposes. The client says it cannot provide a document. No AA, no SPD, no resolution adopting a plan, nothing -- and asks that we just use our default provisions for the restatement. This is clearly a VCP issue. Client has asked prior Investment Company for the document, but the client claims the Investment Company will not provide any data (sounds fishy to me). Has anyone had any experience with filing under VCP for what would be now a new plan document effective 1/1/14 -- basically asking relief for it not being signed until 2019?
Number of replies posted  1 reply      Number of times viewed  30 views      Add Reply, Inc.
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