Message Boards Digest

May 21, 2019

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

Santo Gold created a topic in Retirement Plans in General

Former Owner, and Son of Owner, Still in Plan After Sale of Medical Practice

Doctor who was 100% owner of his practice sells the practice to a new owner (not related to the original owner), who has become the sole 100% owner. The old owner continues to work as an employee in the practice. The 401k plan was top heavy before the sale. The sale took place in 2018 (it's now 2019). [1] Since the date of the sale, for the 2019 plan year, is the account balance of the prior owner excluded for top heavy calculations? [2] If so, does that continue for.... how many years? Forever? Also, the adult son of the prior owner is a plan participant and continues to work after the sale. He was a key meployee by attribution before the sale. [3] Starting in 2019, is he a key employee, non-key, or excluded from the top heavy calculation?
Number of replies posted  1 reply      Number of times viewed  50 views      Add Reply

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Barbara created a topic in 401(k) Plans

Expensive Correction Under EPCRS for Missed Deferrals

I have a non=safe harbor 401k plan that's been in effect for 10 years. Initially, the employer adopted an "owner-only" plan that had no eligibility service or hours requirements, but he also owned another company, that (surprise!) had employees. Although none of those employees ever worked 1,000 hours in a plan year, they were never specifically excluded under the terms of the original plan document. There are no matching contributions. The employer deposited a 25% profit sharing contribution each year into his and his wife's accounts. The profit sharing allocation method is divided pro rata under the terms of the document. There are no allocation conditions (of course). We had planned to submit under EPCRS, because the violations don't meet the requirements for self-correction. Question: Assuming the ADP of the two HCE owners is 30%, I assume the correction for the "missed deferral opportunity' is 50% of an ADP for NHCEs that will pass the ADP test. That is, do I take 50% of 30% divided by 1.2 to arrive at a correction percent of 12.5%? This seems like an awfully burdensome correction, especially because I need to give everyone a 25%-of-pay profit sharing contribution! Has anyone tried to use a lower percentage for correction purposes?
Number of replies posted  5 replies      Number of times viewed  67 views      Add Reply

Jeff Kirtner created a topic in 403(b) Plans, Accounts or Annuities

Non-ERISA 403(b) Plan Has Started Automatic Contributions -- ERISA Now Applies?

A non-ERISA 403(b) plan was amended to include an automatic contribution arrangement. Does that amendment make the plan subject to ERISA? If so, if the plan is amended to terminate the ACA, does the plan again become a non-ERISA plan?
Number of replies posted  0 replies      Number of times viewed  18 views      Add Reply

Gilmore created a topic in Form 5500

Life Insurance Sales Commission Info for Line 10e

A small, calendar year cash balance plan purchases life insurance in November 2018. The insurance company says a Schedule A will not be completed until November 2019. Assuming the 2018 commissions will be listed on the Nov 2019 Schedule A, is it acceptable to wait until the 2019 5500 to enter 2018 commission amounts on Line 10e Part V of the SF? Or do we press the insurance company to provide the commission amount paid in 2018?
Number of replies posted  0 replies      Number of times viewed  18 views      Add Reply, Inc.
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