Message Boards Digest

July 9, 2019

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

Lou S. created a topic in Distributions and Loans, Other than QDROs

Prepayment of Loan OK?

A participant would like to prepay the remaining semi-monthly payments for the remainder of the year. Assume 6 months (12 payments) being made in a lump sum right now to cover all payment from 7/15/19 -- 12/31/19. Assume the participant loan program allows for these ad hoc payments and sponsor is OK with it. Is this acceptable from an IRS stand point or is it a violation of 72(p)? I realize 72(p) requires level amortization with payments no less frequently than quarterly but this is essentially paying the payments before they are due not in arrears and will not extend the term of the loan just reduce the overall interest paid. But is this a form over substance thing where it can't be done? If it was just prepaying the next quarter instead of the next 6 months would this be OK?
Number of replies posted  3 replies      Number of times viewed  54 views      Add Reply

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Belgarath created a topic in Retirement Plans in General

DOL Plan Audits Getting Out of Hand!

These audits are ridiculous. After the initial document/information request, the answers to which were properly and timely submitted to the DOL, they then came back some months later with a list of over 70 different requests -- and any many of those questions have several sub-parts. All this for a nice, clean little non-audited 401(k) plan. Our tax dollars at work!
Number of replies posted  1 reply      Number of times viewed  51 views      Add Reply

Santo Gold created a topic in Distributions and Loans, Other than QDROs

Forced Distributions at Separation from Service?

Do employees with balances under $5,000 have to be given distribution options or can they simply be forced out? One of my plan sponsors wants to go hyper-streamlining in the distribution process and the day that an individual terminates employment, if they have under $5,000, send them a check and inform them they have 60 days to do something with it. Assuming only lump sum distributions are permitted, could they do this? Doesn't the plan sponsor at least have to give them their options and maybe a 30 day window to decide before taking the force out route? Plus, if over $1,000, the only force out option is an IRA.
Number of replies posted  2 replies      Number of times viewed  45 views      Add Reply

PensionPro created a topic in 401(k) Plans

Coverage Testing of Multiple Plans: How to Handle Intragroup Transfers by Employees?

Three employers are members of a controlled group (A, B, C) and they each sponsor a 401(k) plan with different features. Each plan passes coverage separately -- but barely. Let's say an employee transfers mid-year from Employer/Plan A to Employer/Plan C, is that employee considered in Plan A only or Plan C only or both plans for coverage purposes?
Number of replies posted  1 reply      Number of times viewed  33 views      Add Reply

Sheree Crochet created a topic in Qualified Domestic Relations Orders (QDROs)

Having Trouble Getting a 'QDRO' for My Divorce

I've been divorced about a year and a half now and the judge denied me to getting half of ex's 401K. He stated we needed a QDRO. Not knowing what that meant we contacted the court house and said we each had to sign papers. Once that was done my lawyer got her lawyer license revoked... so we never got around to bring it back to the judge. What do I do in this situation?
Number of replies posted  2 replies      Number of times viewed  43 views      Add Reply

BG5150 created a topic in 401(k) Plans

Employer's Payroll Cannot Support Loan Payments

Plan allows loans. Someone took a loan a couple weeks ago. Thing is, the employer's payroll system has no mechanism to deduct and remit loan repayments! The sponsor is a big company with a proprietary payroll system, so switching to another program is NOT a solution. What can they do? Can we somehow cancel the loan?
Number of replies posted  12 replies      Number of times viewed  64 views      Add Reply

Stash026 created a topic in 401(k) Plans

Processing of a VCP Submission: How Long Does It Take?

Does anyone know how long it generally takes the IRS to respond to a VCP submission? We sent it in back in January and the check was cashed, but we haven't gotten any actual response. Is there a phone number we can call to see the status?
Number of replies posted  4 replies      Number of times viewed  73 views      Add Reply, Inc.
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