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Message Boards Digest

June 27, 2019

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

Cardscrazy created a topic in Retirement Plans in General

Can One Beneficiary Form Cover 2 Retirement Plans?

If you could create a beneficiary form that allowed participants to check the box for applying this primary bene for ESOP and/or 401(k) and this secondary beneficiary for ESOP and/or 401(k) or check the box for "same" and could work it all out in a logical electronic format, can one beneficiary form (actually two within one) cover 2 qualified retirement plans?
Number of replies posted  5 replies      Number of times viewed  46 views      Add Reply
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thepensionmaven created a topic in Retirement Plans in General

Vesting Service Prior to Effective Date of the Plan

EOB mentions all service must be counted for vesting purposes; although I noticed the following when I queried online: "Although all service from date of hire must be recognized for eligibility, a plan can be written to ignore years prior to its effective date (or the effective date of any previous plans) and/or years prior to attainment of age 18 for vesting purposes." I was asked to look into having a new plan drafted under the second criteria. Now not sure.
Number of replies posted  1 reply      Number of times viewed  27 views      Add Reply

justanotheradmin created a topic in Retirement Plans in General

Looking for Old Revenue Ruling 80-155

Does anyone know where I can find old revenue rulings online? I am specifically looking for Revenue Ruling 80-155, which is the one that talks about money needing to be allocated if deposited by the end of the plan year. We are having a (hopefully brief) disagreement with an IQPA auditor, and I'd like to provide them with a copy, not just secondhand sources.
Number of replies posted  3 replies      Number of times viewed  45 views      Add Reply

FormsRstillmylife created a topic in Retirement Plans in General

Missing or Nonresponsive Participant in Money Purchase Pension Plan

The default benefit under a money purchase plan is a joint and survivor annuity. As a defined contribution plan, it cannot pay this benefit straight from the account; it must acquire an annuity from an insurance company. What insurance company will sell an annuity contract to a plan trustee without a participant's signature on the contract application? MetLife already has its hands full trying to find participants on contracts it sold to willing buyers. An MPP with a retirement once every-so-many years cannot buy a group annuity for just this. With investments all in mutual funds for active participants, there is no insurance company involved in the administration or normal investment. Does anyone know of an insurance company taking this business?
Number of replies posted  1 reply      Number of times viewed  24 views      Add Reply

ldr created a topic in 401(k) Plans

Creative Solutions for Handful of HCEs in 1,800-Employee Company

We have a prospect that has about 1800 employees, mostly in lower paid jobs, in the service industry (think restaurants as an example). Of the 1800, only 600 would be eligible if we use 1 year of service, dual entry, age 21. There are 12 HCE employees. All these employees are spread out over several corporations, but they are all owned by one person, so it's a controlled group. They have been presented a standard 401(k) plan with a safe harbor match to cover everyone and have rejected it. What they say they want is a deferral-only 401(k) plan for the NHCEs and a separate "carve out" plan (their terminology, not mine) that benefits only the HCEs for which the company would be willing to provide a match. We are somewhat aware of the existence of Non Qualified Deferred Compensation plans but our understanding of them is that they have so many drawbacks that they are not very popular anymore. We don't really think that the 12 HCEs will appreciate their contributions being a general asset of the employer, being subject to taxation if they leave and take the funds, etc. We understand that the contributions could be put into a Rabbi trust, but even then, they are still subject to the claims of creditors if the company experiences bankruptcy. All that makes this look like a doubtful solution. Are we missing some cutting edge, new plan design possibilities within the world of qualified plans? How have you addressed such requests, if you can share?
Number of replies posted  13 replies      Number of times viewed  94 views      Add Reply

csanch11 created a topic in 401(k) Plans

So How Much in Matching Contributions Are Provided Under This Formula?

Here is a screen shot of the details on how Costco matches employee contributions on their 401(k). I'm not too sure if I understand it. My Assumption: Costco will match 50% of your contributions. So if you contribute $42/month, then their match would be $21/month? Is my assumption correct?
Number of replies posted  1 reply      Number of times viewed  40 views      Add Reply

thepensionmaven created a topic in Retirement Plans in General

Providing the Top Heavy Minimum Under a DB/DC Combo

Employer maintains defined benefit and 401K/SH. Profit Sharing is discretionary. How do we handle the top heavy combination? Must a 5% contribution be made to the PSP, or 2%?
Number of replies posted  3 replies      Number of times viewed  48 views      Add Reply

mjf06241972 created a topic in 401(k) Plans

Typical Deadline for Deciding Whether to Defer?

When is the typical cut-off for an employee to enroll in a 401k plan? For example, they meet eligibility on 7/1 but don't hand in an enrollment form until 7/15. Is this OK?
Number of replies posted  0 replies      Number of times viewed  25 views      Add Reply

Tax Cowboy created a topic in Employee Stock Ownership Plans (ESOPs)

Curing an Employer's Failure to Make Loan Payments Under a Leveraged ESOP

In 2017, taxpayer/client sets up a leveraged ESOP under which loan payments were to be made by Oct. 15 of each successive year. Client has recently begun an IRS audit. No IDR response nor any site visits have taken place. Client failed to make the first year's loan payment (due Oct. 15 2018). Do I wait to cure the late loan payment before the auditor questions why a payment was not made? After discussing with the TPA, I'm leaning towards curing late loan payment (with interest) prior, and make this part of our response, in an effort to get in front of the issue. What's been your experience with auditors' views on late ESOP loan payments and their cure? For what it's worth, there are a number of communications from advisors informing client to set up separate ESOP account but no account was even set up.
Number of replies posted  1 reply      Number of times viewed  25 views      Add Reply
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