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Message Boards Digest

October 7, 2019

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

justatester created a topic in 401(k) Plans

Safe Harbor Plan Uses Non-Safe Harbor Compensation Exclusions and Fails 414(s)

Plan is a Safe Harbor Non-Elective plan. Plan has compensation exclusions (i.e., non safe harbor exclusions -- overtime, commissions, bonuses etc.). The plan does not pass 414s. Can the plan satisfy the 414s requirement by using General testing? Or must it amend the definition of compensation to satisfy 414s?

Number of replies posted  3 replies      Number of times viewed  58 views      Add Reply

Ronald created a topic in Form 5500

Welfare Plan Filing Question

Four entities are in same controlled group/affiliated services group.

  • 3 of the entities participate in one fully insured wrap welfare benefit plan (medical,dental, premium only plan). All insurance contracts for that plan are signed by the plan sponsor (i.e., one of the 3 entities). Since this plan had 140 participants at start of plan year, my understanding is that we will need to file Form 5500 for it.
  • The remaining entity has its own separate fully insured wrap welfare benefit plan (medical, dental, premium only plan ). This entity is the plan sponsor and all insurance contracts are signed by it. There are only 22 participants at start of plan year. Does a 5500 have to be filed for this plan too, or is a 5500 not required for this plan until the plan reaches 100 participant threshold at start of another plan year?

Related question: For annual discrimination testing, do you have to aggregate all the participants from both plans together or can you test separately?

Number of replies posted  2 replies      Number of times viewed  55 views      Add Reply

Jakyasar created a topic in 401(k) Plans

Plan Sponsor 'Accidentally' Terminated Its 401(k) Plan

Sponsor wants to terminate the services of its vendor (or provider/platform) and wants to move another one. By mistake, sponsor tells vendor to terminate the plan without telling them that their services are terminated and assets to be transferred to another vendor. Vendor terminated the plan in April 2019 but assets still not distributed. I believe the sponsor signed a resolution for the plan termination rather than contract termination. Can the sponsor still undo the termination with no issues as to the continuance of the plan? It's a 1-year-old plan. Any other corrective measures that will be required? No idea about what happened to the deferrals, just finding out the facts. Vendor also tells the client that, even if they move the assets to another vendor/platform, they'll be geting a 1099R. How is that possible -- there is no distribution?

Number of replies posted  4 replies      Number of times viewed  77 views      Add Reply

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

How Do SOBN Requirements Affect Small Plan Covering Only the Business Owner Where Future Benefit Accruals Can Still Occur?

Unclear on significance of the Suspension of Benefits Notice requirements for a small plan covering only the business owner where future benefit accruals can still occur. Consider a unit benefit 10% x service formula, now has 7 years of service, now age 70. The AE of his prior benefit exceeds 70% comp limit, so can't accrue in current year. Forfeiture goes away in following year. Does the owner really have to give himself a notice?

Number of replies posted  0 replies      Number of times viewed  23 views      Add Reply

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

Retirement Plan of Deceased Family Member Had No Designated Beneficiary

My brother passed away in January of this year. He worked for PWC and had 3 different retirement accounts there, as well as a life insurance policy. One of these, which was called a "wealth builder" plan, had no designated beneficiary. He had made me the beneficiary of the other 2 retirement accounts and the life insurance policy. In 2015, he had sent my father and me an email with a PDF file entitled "Sissy's benefits." This was a breakdown of his 401k, an RBAP account, and the wealth builder. In the body of the letter he simply put "This is it plus the $20k in life insurance." We had talked to him on the phone and he said that he had taken care of everything. After he passed away, we found out that the beneficiary designation on the wealth builder had been omitted. We did find out much later that he had made the designations on the other accounts within a day of the email he had sent us in 2015. We also found out that there was never any beneficiary named for that account. We can't begin to speculate as to what happened. PWC said the money will have to go into the estate. My father is the administrator of the estate; there was no will. So basically, once everything goes through probate, the money that's left will go to him. My father would like for me to receive the money because he believes that my brother intended for me to have it. I have no other siblings and he was never married so there's no conflict. Right now, my dad is consulting with different people at PWC. Most have been sympathetic, but nobody has been able to really help. Does anyone have any thoughts on this?

Number of replies posted  4 replies      Number of times viewed  58 views      Add Reply
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