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Message Boards Digest

October 8, 2019

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

BG5150 created a topic in Distributions and Loans, Other than QDROs

In-Service Withdrawal at Age 50 Without Minimum Service Requirement?

Can a profit-sharing plan offer in-service withdrawals at age 50, without a seasoning component? I seem to remember a 2-year rule. Or is it if that if the plan uses a seasoning rule, it cannot be less than 2?

Number of replies posted  3 replies      Number of times viewed  60 views      Add Reply
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Flyboyjohn created a topic in Health Plans (Including ACA, COBRA, HIPAA)

MLR Rebate on Marketplace Subsidized Policy

Taxpayer purchased 2018 health insurance policy from ACA Marketplace costing $1,000/month but qualified for advance payment of Premium Tax Credits of $600/month, which reduced his actual net premium to only $400/month. Insurance company failed to meet Medical Loss Ratio and sent Taxpayer an MLR rebate of $1,800 (15% of total gross premiums of $12,000). Doesn't seem right that the Taxpayer received 100% of the MLR rebate while he only paid 40% of the premiums. Anybody have an opinion on how this will shake out from a tax/PTC perspective?

Number of replies posted  0 replies      Number of times viewed  21 views      Add Reply

WCC created a topic in Form 5500

Schedule C Shows 'Negative' Direct Compensation to Recordkeeper

I am reviewing a 2017 Form 5500 prepared by a large record keeper. The record keeper name is listed on Schedule C Part 1, 2(a). Under (d), their direct compensation is listed as a negative number. Does anyone know how a record keeper receives a negative direct compensation number? Does it have to do with revenue sharing and the way it is credited back?

Number of replies posted  0 replies      Number of times viewed  25 views      Add Reply

hardshipquestions created a topic in 401(k) Plans

Hardship Withdrawal -- Needed for Sensitive Medical Expenses

I find myself in a difficult position with requesting a hardship withdrawal from the 401k account I have through my employer. The reason for the withdrawal is medical, but I'm reluctant to provide documentation due to the sensitive nature of the expenses. I am a cancer survivor, and of my treatment involved the use of strong opiates to deal with pain. While the cancer seems to be defeated (at least for now), the opiate addiction isn't. While these are legally prescribed opiates, they are clearly having a negative impact on my personal and professional life, but I find myself unable to quit on my own. My doctor has recommended that I check into an in-patient rehabilitation clinic for opiate addiction. Such a facility, however, is very expensive, and is not fully covered by my medical insurance -- my responsibility could be anywhere from $10k to $50k, depending on a variety of factors. My retirement funds can comfortably cover even the largest estimate, so I can "afford" it in that regard. Due to various other medical and personal expenses, I've already leveraged my loans and non-hardship withdrawal, so this is my only remaining option. For obvious reasons, I don't want to inform my employer that I am attending an in-patient rehabilitation clinic for drug addiction. My plan seems to require that I submit documentation detailing the costs, but I believe that doing so would jeopardize my continued employment or impact my career negatively in other aspects (regardless of whether or not it is legal or proper for them to do so, I find it likely that this will occur due to the nature of my industry). What can I do to provide the requested data without revealing that it's related to drug addiction? Is it a crime to falsify this data by altering the bills to make it look as though it's for a different medical expense? What other recourse do I have? I'm desperate to get clean before it ruins my career, marriage, and life, but revealing this information may well do that anyway. I feel hopeless and trapped. Is there anything I can do?

Number of replies posted  1 reply      Number of times viewed  38 views      Add Reply

rocknrolls2 created a topic in Distributions and Loans, Other than QDROs

Collectively Bargained Money Purchase Plan -- 'Deemed Retirement' Definition

A money purchase Taft-Hartley plan provides that an employee is deemed to be retired, for administration purposes, as of the first day of the calendar quarter following 60 days for which contributions from a contributing employer ceased to be required on his/her behalf. At that point, if the employee is unmarried, benefits are payable in the form of a straight life annuity, unless the participant elects a lump sum, or installments payable over 3 years, 5 years or 10 years. If a participant is married, the joint and survivor annuity is payable unless the participant elects, with spousal consent, to receive his/her account in the form of a qualified optional survivor annuity, a straight life annuity, a lump sum, or installments payable over 3 years, 5 years or 10 years. Since the IRS considers a money purchase plan to be a pension plan, there are restrictions on in-service distributions prior to the participant's attainment of age 62. I can appreciate the fact that it may be difficult for a multiemployer fund to determine whether a participant has in fact terminated his/her employment. However, I am concerned that the IRS could question the plan's qualified status if the participant is deemed terminated or retired and it is determined that the participant was not in fact terminated. Your thoughts?

Number of replies posted  2 replies      Number of times viewed  20 views      Add Reply

DDB BN created a topic in 401(k) Plans

Catch-Up by Self-Employed Individual

A self-employed individual has net income of $29,725. He has W-2 income of $192,884.90 from an unrelated employer and deferrals of $6,000 into the unrelated employer's 401(k) plan. Is the catch-up contribution, which will be contributed to his self-employed 401k, subject to the 100% of comp limit, or is it in addition to?

Number of replies posted  3 replies      Number of times viewed  37 views      Add Reply
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