Message Boards Digest

July 12, 2019

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

austin3515 created a topic in 401(k) Plans

Include Names and Addresses on Pre-filled Distribution Forms?

We have the ability to pre-fill Fund Company distribution forms with names and addresses before sending to terminated participants using an in-house software program. We would NOT enter DOB's or SS#'s. Just names and addresses. What are others doing? We had been including names/addresses at one point in time but decided to stop because we felt like once that information was on the form, it was that much closer to being susceptible to theft. Do others have any insight regarding security audits, etc., that have done studies/analysis on this stuff? I'm sure others are putting a lot of thought into this. Part of the discussion of course is that we are mailing them the form, so the envelope and cover-letter does already have their name and address.
Number of replies posted  4 replies      Number of times viewed  76 views      Add Reply

SSRRS created a topic in Defined Benefit Plans, Including Cash Balance

Switching to Asset Smoothing (Averaging)

Revenue Procedure 2017-56 states that one of the three asset valuation method changes automatically approved is: "A change in asset valuation method to a method that determines the value of plan assets as the average of the fair market value on the valuation date and the adjusted fair market value of assets determined for one or more earlier determination dates, as described in Section 430(g)(3)(B) and the regulations and other published guidance thereunder. (See Section 1.430(g)1(c)(2) and Notice 2009-22, 2009-14 I.R.B. 741.) The asset value determined under the method must be restricted so that it is not greater than 110% and not less than 90% of the fair market value, as described in Section 1.430(g)-1(c)(2)(iii)." Based on that, a change to using a 3 year average as the value of the assets for the val (i.e., a 3 year average based on the fair market value of the assets as of the current val date plus the prior two years fair value of the assets) would be automatically approved?
Number of replies posted  1 reply      Number of times viewed  33 views      Add Reply

ERISAgeek111 created a topic in Nonqualified Deferred Compensation

Change NQSO Plan to ISO Plan?

Client executed a nonqualified stock option agreement with an employee, but claims it actually meant to give the employee incentive stock options. Is there a quick way to fix this? I have not yet seen the actual equity incentive plan (but have asked for a copy).
Number of replies posted  0 replies      Number of times viewed  14 views      Add Reply

oldman63 created a topic in 403(b) Plans, Accounts or Annuities

Deadline for Making $5,000 Cash-Out?

Section 657 of EGTRRA amended Section 401(a)(31)(B) of the Code to require that mandatory distributions of more than $1,000 from a plan qualified under Section 401(a) be paid in a direct rollover to an individual retirement plan (i.e., an individual retirement account as described in Section 408(a) or an individual retirement annuity described in Section 408(b)) of a designated trustee or issuer if the distributee does not make an affirmative election to have the amount paid in a direct rollover to an eligible retirement plan or to receive the distribution directly. Section 657(a) of EGTRRA also added a notice provision to Section 401(a)(31)(B)(i) of the Code which requires that the plan administrator notify the distributee in writing (either separately or as part of the Section 402(f) notice) that the distribution may be paid in a direct rollover to an individual retirement plan. A TPA, who manages many plans with the mandatory $5,000 cash-out feature, notifies affected terminated participants regarding the mandatory distribution but only rolls over the account balance to the IRA upon direction from the plan sponsor. Absent plan sponsor direction, the participant's account balance remains in the plan. Is there a time factor in which the direct rollover be made to the IRA or can the monies remain in the plan as currently administered?
Number of replies posted  1 reply      Number of times viewed  29 views      Add Reply

Fiduciary Guidance Counsel created a topic in 401(k) Plans

Noncompliance with 'Thou Shall Not Sin' Provision Causes Plan Disqualification?

An individual account 401(k) retirement plan provides participant-directed investment. Following participants' directions, the plan's trustee engages in transactions with a party-in-interest. No exemption applies, and there's no doubt they're prohibited transactions under ERISA Section 406 and Internal Revenue Code Section 4975. Yet these transactions are not necessarily an IRC Section 401(a)(2) exclusive-benefit violation. Among other facts, each investment has an above-market return, and the plan's counterparty has strong creditworthiness and liquidity. The plan's governing document includes this: "The Trustee shall not engage in any prohibited transaction within the meaning of the Code and ERISA." Does something that might not have tax-disqualified a plan have that effect for the reason that the plan's fiduciaries failed to administer the plan according to its governing document?
Number of replies posted  3 replies      Number of times viewed  51 views      Add Reply, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2019, Inc. All materials contained in this mailing are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe | Privacy Policy