Message Boards Digest

October 16, 2019

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

baileybear created a topic in 401(k) Plans

Death Benefit to Minor

I have a 2006 terminated employee who died in 2007. The employee had no spouse and left his 401k assets to his 3-year-old son (under $2,000). I have a copy of the letter that the employer wrote to the family of the deceased in 2007. They received a phone call from the deceased employee's mother who told them to contact the sister, which they did. There was no response. When we took over the plan in 2017 we found out that the employee was deceased and the assets had not been paid out. We have sent letters with no response and we are now well past 5 years. So we now have a plan failure even though the beneficiary has no idea that he is entitled to the assets. The beneficiary is still a minor (age 16) and I have located the beneficiary on FaceBook (I did not contact him). I have contacted the mortuary who provided phone numbers that no longer work. I have located the sister and sent several e-mails, she does not respond. I cannot find a financial institution willing to accept the assets as a rollover into an in inherited IRA. At this time, I have no idea on how to proceed. Any suggestions/guidance would be greatly appreciated.

Number of replies posted  0 replies      Number of times viewed  50 views      Add Reply

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Pammie57 created a topic in Retirement Plans in General

Audit Fees Paid from the Plan Participant Accounts

I think I have read that the financial audit (large plans) fees charged by a CPA firm can be paid from the plan each year. My question: what is a fair way to allocate those fees among the plan participants? If the same amount is charge each participant, then some small account balances could almost be wiped out. Most of my clients just pay it from the company and deduct it as a business expense. For the client who insists on the plan participants paying for it, should they allocate the fee based on account balances?

Number of replies posted  6 replies      Number of times viewed  92 views      Add Reply

BG5150 created a topic in How to Use the Message Boards (a.k.a. Forums)

Search for a Particular User Profile

How can I search for a particular user profile? How could someone look up BG5150 without clicking on the relevant link in a thread?

Number of replies posted  2 replies      Number of times viewed  39 views      Add Reply

TPApril created a topic in Form 5500

5500-EZ MP Plan, No Contribution by October 15

Here we are on October 15. A 1-person money purchase plan has not provided contribution info, so we're assuming no contrib was made by September 15. We don't even know the required contribution amount. I think this is what to do: If no contribution amount provided, then cannot file 5500-EZ. It will be late, will need to pay a penalty through the late EZ program, and file 5330. If contribution amount provided, but not made by September 15 -- Prepare 5500-EZ for signing. Will need to show outstanding unpaid amount of contribution. Will need to file 5330. Assuming those are correct steps, an extension for 5330 was not requested. Curious what other practitioners have done in this situation?

Number of replies posted  1 reply      Number of times viewed  41 views      Add Reply

EBECatty created a topic in 401(k) Plans

Contingent Benefit Rule

I see a few related threads on the topic, but is there a clear answer on the following: In its 401(k), the employer matches 100% up to 4% of compensation. For people earning above the 401(a)(17), their match is limited by the 401(a)(17) cap at under 4% of their total compensation. So if they earn $400,000 and defer $19,000, their match is capped at $11,200 ($280,000 * 0.4) whereas a match based on 4% of their total compensation would have been $16,000 ($400,000 * 0.4). If the "missed" amount due solely to reaching the 401(a)(17) limit ($4,800 above) is either paid in cash or is contributed (as an employer nonelective contribution) to a nonqualified plan, does that violate the contingent benefit rule?

Number of replies posted  0 replies      Number of times viewed  41 views      Add Reply

BG5150 created a topic in 401(k) Plans

90 Day Return of Deferrals Allowed in QACA Plan?

I know in an EACA, the plan could have a provision that allows the withdrawal of deferrals within 90 of the deferrals starting. Can that provision be used in a QACA plan?

Number of replies posted  1 reply      Number of times viewed  53 views      Add Reply

hawkeye1959 created a topic in 401(k) Plans

Getting a 401(k) Distribution From Employer's Plan Operated by Parent Company

I am posting this for a family member. Sister was an employee with Farm Fresh supermarket and has a 401k with Supervalu which owned Farm Fresh but closed and sold them all. She is 61 years old and looking to close this account and move the money to a money market savings account. She has not contributed any funds to this 401k since the closing of Farm Fresh. Would there be an issues doing this? Can you help with info on the process of getting the money? Supervalu is also doing a merger with another company to form UNFI.

Number of replies posted  1 reply      Number of times viewed  49 views      Add Reply

Shark created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Cost of Health Plan Coverage During Month in Which Employment Ends

I am leaving my company before the end of the month. My coverage will end the day I leave the company, but I am being charged my full premiums for the month. Is this legal?

Number of replies posted  1 reply      Number of times viewed  28 views      Add Reply

mariemonroe created a topic in Retirement Plans in General

Controlled Group Question

Parent’s voting stock is owned 50/50 by John and James (unrelated). Parent owns 100% of Sub. Sub is thinking of creating Sub One which will be owned

  • 50% by Sub
  • 50% by Sub’s general manager

The ultimate question is whether Parent is in a controlled group with Sub One. I think the answer is no. I am struggling with whether Sub’s general manager’s stock in Sub One will be excluded under 1563(c)(2)(iii) (assuming the stock will be subject to a condition that runs in favor of Parent or Sub). This rule hinges on Parent owning 50% of Sub One and I don’t think it does because the parent sub rules for determining stock ownership in 1563(d)(1) only apply the constructive ownership rules from of 1563(e)(1) (options), (2) (partnerships) and (3) (estates and trusts).

Number of replies posted  1 reply      Number of times viewed  22 views      Add Reply, Inc.
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