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Message Boards Digest

August 27, 2019

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

AF2019 created a topic in Defined Benefit Plans, Including Cash Balance

Rollover of Payments from a Term Certain Annuity?

If a participant in a Defined Benefit Pension Plan chooses to take a 5 year (60 month) term certain annuity, can those payments be directly rollover over to an IRA? What if the participant is over 70-1/2?

Number of replies posted  0 replies      Number of times viewed  32 views      Add Reply

mjf06241972 created a topic in Distributions and Loans, Other than QDROs

Take Hardship Distribution from a Safe Harbor Source?

Can a hardship distribution be take from safe harbor source?

Number of replies posted  2 replies      Number of times viewed  44 views      Add Reply

Brian Haynes created a topic in Estate Planning Aspects of IRAs and Retirement Plans

RMDs under the Proposed SECURE Act

Under the proposed SECURE Act, RMDs will be limited to a 10-year pay-out for noneligible beneficiaries. A life expectancy pay-out will still be available for eligible beneficiaries (spouse, minor children, disabled individuals, chronically ill individuals and those not more than 10 years older than the IRA owner). I'm having trouble determining whether the current RMD rule that provides that if a non-individual beneficiary is named (estate, charity or non-look through trust), and if the IRA owner dies before his/her required beginning date, then post-death RMD payments must be distributed within 5 years. Under the SECURE Act, would this 5 year pay-out rule be increased to 10 years if a non-individual is the beneficiary?

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

created a topic in 401(k) Plans

Amend Mid-Year to Reduce Safe Harbor 401(k) Match Contributions?

Plan currently provides SH 401(k) match contribution (100% up to 6%) on a payroll basis. Can the plan be amended mid-year to reduce the match to 100% up to 4% prospectively for the rest of the year?

Number of replies posted  1 reply      Number of times viewed  48 views      Add Reply

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

Fixing a 401(a)(26) Design Failure

We set up a traditional DB plan -- not cash balance -- for a restaurant with 50 employees. We excluded bartenders and service people while covering the chefs, kitchen and dish washers and the vice-presiident of the business. Alhough the plan satisfies 70% coverage RPT and initially met the 40% participation rule, this year the minimum participant count is too low: 39.2%. It's not clear to me how this can be fixed at minimum cost to the client. Can I just cover 1 or 2 members of one of the excluded groups?

Number of replies posted  0 replies      Number of times viewed  34 views      Add Reply

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

Calculating the RMD on a Voluntary Contribution Account

How would one go about calculating an RMD on a participant's voluntary account, since basis in the account has already been taxed?

Number of replies posted  1 reply      Number of times viewed  43 views      Add Reply

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

How Does the Benefit Formula Works in a Floor Offset Plan?

An employee terminated with an accrued benefit of $844 per month under a DB floor offset plan. His DC account balance is $44,000. He is 45 years old. The $844 per month benefit is due at age 62 (NRA). Because the AB of $844 is due at age 62, is it proper to discount the $844 to his current age of 45? (We would use plan equivalence for this.) That would produce an accrued benefit of $263 per month starting his current age of 45. Next, would we convert the DC account of $44,000 to an annuity-based benefit using the APR starting at his current age of 45 -- $235 monthly -- which then would be subtracted from the $263 per month amount?

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

justanotheradmin created a topic in 401(k) Plans

Doing Business with the City of San Francisco: Issues as to Domestic Partner Distribution Options

A plan sponsor is trying to get a contract with the city of San Francisco, and would be subject to their equal benefits requirements. Considering that a domestic partner cannot rollover money to their own IRA the way a spouse would be able to, I don't know how the plan sponsor can affirm that the distribution options are the same. They are not under current federal tax law. As far as I can tell preemption applies, but is there something else I'm missing? And certainly step-children are not treated the same as regular children in retirement plans. Also the RMD upon participant death options are usually different depending on the type of beneficiary.

Number of replies posted  6 replies      Number of times viewed  55 views      Add Reply

POA Curious created a topic in How to Use the Message Boards (a.k.a. Forums)

Can POA Change Beneficiary on Bank Accounts?

My uncle designated me as sole beneficiary of one of his bank accounts. His step-daughter has POA (don't know what type). We live in California and the accounts are in a California bank. Can the step-daughter change the beneficiary or close the accounts and take the proceeds? My uncle is in a nursing home and is starting to show signs of dementia, but he's still mostly aware and present.

Number of replies posted  1 reply      Number of times viewed  30 views      Add Reply

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

Was My Client's ESOP Audited in Effect for Particular Years?

Entity A, Inc. sells 100% of stock to an ESOP with name of 'A, Inc. ESOP AND PROFIT SHARING PLAN' in 2011. ESOP files for EIN and uses such for all 5500 filings. Entity A is audited for tax year 2012 and 2013. Which resulted in a no change determination letter. Fast forward, Entity A ESOP is now under audit for same years (2012 and 2013) and all years through 2017. I'm coming in late to the proverbial game as 2848/attorney and client has already signed audit extensions prior to my involvement. Q: Are there any cited cases/internal revenue manual cites/other supporting sources, that stand for the proposition that the ESOP was effectively audited for 2012/2013 with these facts? I note there seems to be very little case law about whether or not these facts can support a collateral estoppel or res judicata argument. And it's usually not favorable to taxpayers. Thoughts and comments are appreciated. Thank you -- Joe Dadich, CPA, Esq.

Number of replies posted  2 replies      Number of times viewed  29 views      Add Reply

Belgarath created a topic in Retirement Plans in General

IRS Approval of DC Documents

Anyone have a pipeline to the IRS on the likely date for approval of DC docs and the opening of the next restatement cycle? Is smart money still on 2021, or is there any likelihood of 2020?

Number of replies posted  0 replies      Number of times viewed  19 views      Add Reply
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