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Message Boards Digest

October 9, 2019

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

EBECatty created a topic in 409A Issues

409A/457(f) -- Voluntary Termination After Change in Control

In what would otherwise be a clear short-term deferral plan under 409A and 457(f), is there any exception from 409A and 457(f) with a vesting/payment trigger based on a voluntary termination (for any reason, not just good reason) at any time within one year following a change in control? The identical form (one lump sum within 30 days) and amount (fixed dollar amount) of payment is available under several other situations (employment until stated date; death; disability; good reason termination; involuntary termination without cause). Unless I'm missing something, the right to payment is no longer subject to a SROF upon a change in control, even if the employee remains employed. The one-year timeframe rules out a short-term deferral. The only thing I can think of is some type of separation pay window program, but I'm not sure it would meet the requirements where the same payment is available in several other circumstances (and, for 409A, exceeds 2x base pay/401(a)(17)).

Number of replies posted  0 replies      Number of times viewed  15 views      Add Reply
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ERISAGal created a topic in 403(b) Plans, Accounts or Annuities

Premature Use of Funds in Forfeiture Account

Plan Sponsor chose to forfeit participants' non-vested account balances immediately upon their termination of employment and use that money to reduce their payroll period employer match contribution payments. The plan document has the typical provisions -- forfeitures occur on the earlier of being fully paid out their vested portion upon termination OR having incurred five 1-year Breaks-in-Service. The Adoption Agreement also states that the timing of allocation of forfeitures should occur in the Plan Year following the Plan Year in which the forfeitures occur. It appears that the employer should not have had access to the forfeited amounts until the year following the year the "true" forfeiture would have occurred. How should this problem be corrected? Everything I'm finding so far discusses employers NOT using forfeitures by year end. This employer seemed to use them too soon. Is this addressed in EPCRS?

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

jmartinrps created a topic in Form 5500

Which Box to Check? Single Employer vs. Multiple Employer

We have a plan that was set up as a multiple employer plan in 2018. For 2018 there was only one company in that plan. In 2019 at least two other companies joined/adopted. For the 2018 5500, should we check the single employer box or check the multiple employer box and just have the attachment specify the one company making 100% of the contributions?

Number of replies posted  1 reply      Number of times viewed  33 views      Add Reply

Hojo created a topic in Retirement Plans in General

Compensation -- Schedules C and K-1 Combined?

A sole proprietor gets 1099 income and reports it on a Schedule C. The person also has a 2.25% interest in an LLC and gets income reported on a Schedule K-1. While both are subject to self-employment tax, If the sole proprietor sets up a new retirement plan, can they be combined to result in a larger level of compensation?

Number of replies posted  2 replies      Number of times viewed  53 views      Add Reply

BG5150 created a topic in Retirement Plans in General

Do You File VFCP After Getting the "Your Contributions Were Late" Letter from IRS?

A few of our clients are getting the "you had late contributions, VFCP is available..." letters. Do you submit via VFCP after getting those letters? Any anecdotal evidence of investigations if is isn't filed? Or do you just keep a copy of the self-correction in your files and show that when asked?

Number of replies posted  2 replies      Number of times viewed  28 views      Add Reply
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