Message Boards Digest

August 23, 2019

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

PainPA created a topic in 401(k) Plans

Roth in Plan Doc But Never Wanted to Offer It

Plan Admin/Trustee did not want to offer Roth. Roth was added during the 2016 restatement in error (?) and was not found out until now. So an employee selected Roth on the enrollment form but the administrator went back to them and said we do not offer Roth and then the employee placed the same percentage in pre-tax but never crossed out the Roth. So everything moved forward and the employee did not miss $1 of the safe harbor match. The plan has as internal audit and this employee was selected. What is my legal correction? Everything I am reading relates to missed deferrals, missed entry, missed eligibility..... and how to fix..... making up the difference.... Basically I want to do a retro amendment... just not sure... any ideas?

Number of replies posted  0 replies      Number of times viewed  44 views      Add Reply

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

Beneficiaries Don't Want the Participant's Death Benefit

This is a new one to me. Has anyone ever dealt with this? A participant died and left a 60-month preretirement death benefit payable. No beneficiary designation, no spouse, no children. The plan contacted his mother, who would be the default beneficiary under the plan terms. She said she wants nothing to do with it. Apparently the participant has a sister as well, but the mother said the sister wouldn't want it either (she would be next default beneficiary after the mother). What would you do if the default beneficiary refuses to apply for the benefit? I'm also assuming that we wouldn't be able to get her to fill out and submit a formal disclaimer of interest.

Number of replies posted  4 replies      Number of times viewed  74 views      Add Reply

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

Best Practices for Actuarial Equivalence Study?

Client's attorney is proactively (no problems or lawsuits anticipated, just want to have an objective look) hiring actuarial firm to do actuarial equivalence study respecting client's frozen defined benefit pension plan. Client has hired a particular actuarial firm for consulting on lump sum window, and other matters through the years. The actuarial firm does not consider itself to be a fiduciary respecting the plan, but in terms of best practices, does anyone have thoughts on whether or not another actuarial firm that has never worked before with the client's plan should be selected to do the study or if it doesn't matter?

Number of replies posted  1 reply      Number of times viewed  32 views      Add Reply

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

Recoupment of Overpaid Withholding

Has anyone had any experience with the IRS regarding recoveries of withholding overpayments made by a pension plan or is aware of any guidance? For example, assume that a pension plan continues to pay benefits to a deceased retiree's bank account and the joint holder of the account retains the funds or the funds are returned to the plan by the bank. An IRS letter dated May 15, 2003 from the Office of Chief Counsel entitled "IRS Letter on Recovery of Erroneous Withholding" states that the plan can file Forms 843 and 941c (apparently Form 941c was replaced by Form 941-X). The guidance contained in this May 15, 2003 letter appears out of date. And it would appear that IRS Form 945x is more appropriate. See this May 15, 2003 IRS Letter:

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

jpdc created a topic in 401(k) Plans

Terminating MEP Participation to Start a Stand-Alone Plan

A potential client is leaving an MEP (Multiple Employer Plan) and wants to start a new stand-alone plan mid-year with the intent on moving the assets over to the new plan. The plan is NOT safe harbor. Because this will be a successor plan, does the new plan require a short initial plan year or is there a way to avoid the short plan year?

Number of replies posted  0 replies      Number of times viewed  36 views      Add Reply

Belgarath created a topic in Distributions and Loans, Other than QDROs

How to Report the Direct Rollover of a Loan Note

Participant terminates with outstanding loan - rolls loan note over to new employer's plan. Reported on 1099 as code G, or not reported at all?

Number of replies posted  3 replies      Number of times viewed  41 views      Add Reply

pgold created a topic in Retirement Plans in General

Change in Name of Plan Sponsor

I have a pre-approved plan, ABC Profit Sharing Plan, Employer ABC Corp. PYE 12/31/18. Effective 1/1/19. Articles of Incorporation with a Statement of Conversion changed the name to XYZ, Inc. The EIN is the same. I don't know what should be done about the plan. Does ABC end and XYZ adopt the plan? This is a California company.

Number of replies posted  3 replies      Number of times viewed  42 views      Add Reply

Dougsbpc created a topic in Cross-Tested Plans

SH 401(k) Plus Cross-Tested PS Plan: Aggregation Required?

Suppose you have a safe harbor 401(k) plan (safe harbor match). In addition, the same employer has a cross-tested profit sharing plan. Both plans cover the same employees although the 401(k) plan has an earlier entry date. My understanding is that the Safe Harbor 401(k) plan can stand on its own and the profit sharing plan can stand on its own as long as it (the profit sharing plan) passes 410b and 401(a)4 on its own. In other words, aggregation is not required for the average benefits percentage test in this case. Or, is it required that both plans be aggregated for the average benefits percentage test?

Number of replies posted  1 reply      Number of times viewed  34 views      Add Reply

khr created a topic in 401(k) Plans

Plan Subject to QJSA -- Spousal Consent Needed for Hardship Distributions? RMDs?

401k plan has QJSA feature. Does the spouse have to sign off on hardship distributions and RMDs?

Number of replies posted  0 replies      Number of times viewed  12 views      Add Reply, Inc.
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