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Message Boards Digest

August 13, 2019

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

Belgarath created a topic in 457 Plans

ASG Rules Apply to Non-Profits for 457(b) Plans?

Is there any reason why the ASG rules wouldn't apply? Never happened to see a situation where a non-profit member of an ASG sponsors a 457(b) plan, but I wouldn't think it is unheard of.

Number of replies posted  3 replies      Number of times viewed  34 views      Add Reply

C. B. Zeller created a topic in Distributions and Loans, Other than QDROs

Forced Distributions to Participants, into IRA Institution Owned by Sponsor

Plan sponsor has an ownership interest in an IRA provider. Can they force out (terminated <$5k) participants into IRAs with that provider, or would that be a PT? I remember reading about a PTE that would allow banks to force out participants in their plans into IRAs held by the bank, but my search skills are failing me at the moment and I can't find it again. If I'm remembering correctly it would seem to be relevant guidance.

Number of replies posted  2 replies      Number of times viewed  51 views      Add Reply

Becky Schwing created a topic in Distributions and Loans, Other than QDROs

Too Much Withholding

Participant had 20% withheld on full distribution. Part of the distribution was for Roth money which was not taken into account and the full distribution was treated as pre-tax money. Need to issue amended 1099-R. Original withholding was done for $5,000 but upon revision the withholding should only have been $3,000. When issuing the amended 1099-R how do you show the withholding amount -- what it actually was or what it should have been? Also -- what is best way to get the over withholding back?

Number of replies posted  4 replies      Number of times viewed  42 views      Add Reply

ConnieStorer created a topic in Retirement Plans in General

Bankruptcy Protection for Sole Proprietor

Single member LLC with no employees other than the single member. Properly formed pension plan, and properly formed 401k/profit sharing plan. IRS opinion letters issued with respect to both. Plan contributions made timely and in allowable amounts. The Single member LLC has filed for bankruptcy Issue: The trustee in the bankruptcy case has said that (i) under the U.S. Supreme Court decision of Raymond B. Yates, MD, PC Profit Sharing Plan v. Hendon, a single member LLC having no employees other than the member cannot have a plan that is ERISA qualified, and (ii) if the plan is not ERISA qualified, then the plan cannot be tax-exempt under IRC sections 401 and 501 (and as a result cannot be claimed as exempt in bankruptcy). Question: I agree that a qualified plan that does not cover any employees (just the owner) is not subject to ERISA. However I think the logic is flawed that if they are not covered by ERISA then they cannot be tax-exempt under IRC 401. Does anyone have an opinion on this?

Number of replies posted  0 replies      Number of times viewed  28 views      Add Reply

J Simmons created a topic in Retirement Plans in General

Household Employee of Business Owner

100% owner of an LLC business that has a 401k plan also has two household service employees (W-2). Do the two household employees count as employees under the control group rules, or is there an exception where their employment is not in the pursuit of a profit?

Number of replies posted  2 replies      Number of times viewed  40 views      Add Reply

Tom Poje created a topic in Retirement Plans in General

Projected 2020 Retirement Plan Limitation Amounts, Based on New CPI Release

The latest and greatest figures based on today's CPI release -- this is a spreadsheet that's a revision of the last spreadsheet I created. Note: it adds 2 new columns which might never be used: [1] indexed limit for minimum distribution which was planned last year but never passed; and [2] indexed limit for catch up at age 60, which was part of the secure act if that ever gets passed. Of course, the year I to which I have it indexed might need to be adjusted someday.

Number of replies posted  0 replies      Number of times viewed  66 views      Add Reply
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