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Message Boards Digest

September 10, 2019

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

Jim White, CFP, EA created a topic in 401(k) Plans

Advisor Wants to Work with TPAs on Solo 401(k)s

I'm a fee-only financial advisor who has a few small business owners, mostly individuals, as clients. These clients would benefit greatly from opening Solo 401(k)s. They want to max out the contribution limit, with the 25% profit sharing, and would like the ability to make after-tax contributions. The custodian I use has a Basic Document but it doesn't allow after-tax contributions. The custodian said to open a trust and create the plan document myself. Yes I'm a CFP and EA, and I'm smart enough to know I have no business creating plan documents myself. I see a business opportunity to provide the after-tax options to clients, but cannot do it myself. Can anyone recommend a TPA that can work with an advisor to provide a Solo 401(k) in a cost effective manner? That seems to be the problem. We've attempted to work with a few TPA's but the cost to this just to add the after-tax option, made the client say the heck with this we'll just use the custodians simple basic plan document and forget the after-tax option. Even if you explain the long-term tax benefits, they usually shy away. Again, I see the need for a niche here, but need help.

Number of replies posted  2 replies      Number of times viewed  56 views      Add Reply
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CaitlinMarg created a topic in 401(k) Plans

In-Service Withdrawal Before 59-1/2

An executive is being encouraged by his advisor to change his company's retirement plan to allow in-service withdrawals before age 59-1/2 so that he can roll his balance into an IRA. Is that allowable? I believe if the plan were amended to allow such a thing, the Code still says a participant would be able to withdraw only the vested company-contributed part of his account, not ehe pre-tax employee deferrals. Is that right?

Number of replies posted  5 replies      Number of times viewed  86 views      Add Reply

chibenefits created a topic in Retirement Plans in General

Providers of Pre-Approved Qualified Retirement Plan Documents

I am aware of Datair and ftwilliam as qualified plan document providers. Are there any others that you would recommend?

Number of replies posted  4 replies      Number of times viewed  67 views      Add Reply

Lou81 created a topic in Retirement Plans in General

Funding Deadline for Sole Proprietor's Money Purchase Plan

I have a sole proprietor-sponsored Money Purchase plan. Is the funding deadline September 15? The accountant says since that because it's an individual the deadline would be the extended date of the individual's income tax return (October 15).

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

thepensionmaven created a topic in 401(k) Plans

Short Plan Year for Safe Harbor Plan; Business Began on July 1

Two employees previously working for a law firm started their own practice 7/1/2019 and want to set up a safe harbor 401K by 9/30/2019. I believe the plan would need to start as of the date the practice started, and have a short plan year, because they were employees of another firm prior to that date. No eligibility requirements would be applied, such that all employees that started with the firm, whether part time or full time, would  be included. I also believe the only safe harbor available at this point, judging from the client's goal, would be a safe harbor match, with the hopes that the employees not defer. Am I off track here?

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

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

ERISA-Covered 403(b) Plan, But Employer Can't Move Investments

A financial advisor has reached out to me about a 403b plan at TIAA. The plan has an employer contribution, and TIAA acknowledges that it is an ERISA plan but they also say that, because all the investments are in annuities, the plan sponsor does not control the investments and hence the plan sponsor can't decide to move the plan in one fell swoop to another platform. Instead it would be up to each participant because each participants control his or her own account. Is this just TIAA being TIAA, or do they have a leg to stand on here?

Number of replies posted  2 replies      Number of times viewed  19 views      Add Reply

Santo Gold created a topic in Retirement Plans in General

Can 401(k) Plan Have Individual Trustees None of Whom Is a U.S. Citizen?

We serve as TPA for a small 401k plan whose parent company is actually from the UK. The plan only covers the US employees. We had three trustees for the plan, 2 of which were not US citizens while one was a based in the US and was a US citizen. The US trustee left the company a few days ago. He will be removed as a plan trustee. Is there a problem if there are no US trustees for this plan?

Number of replies posted  0 replies      Number of times viewed  11 views      Add Reply
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