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Message Boards Digest

November 1, 2019

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

goldtpa created a topic in Correction of Plan Defects

Sponsor's 401(k) Assets Mistakenly Transferred to PEO's 401(k) Plan

"Large Payroll company has both payroll services and PEO. Sponsor A signs up with payroll service in 2016. Sponsor A has its own 401k Plan. Sponsor A's 401k is mistakely moved to PEO 401k plan (don't ask me how). Sponsor's employees have been making contributions to the PEO plan since 2016. [1] I assume this is a VCP Correction under transferred assets. [2] Who makes the application for VCP. Sponsor A, PEO, or both? [3] Assuming it can be self-corrected, is the money in the PEO treated as if it were in Sponsor A's 401k plan all along? Or, are the contributions and its earnings taxable as that money didnt belong in PEO plan in the first place? [4] Can the money that is wrongfully in the PEO, be moved to IRAs?"

Number of replies posted  5 replies      Number of times viewed  54 views      Add Reply

PowerCPA created a topic in Employee Stock Ownership Plans (ESOPs)

Use of Administrative Services S Corp Wholly Owned by ESOP

"Anyone familiar with this tax strategy using an ESOP? Payments are made to an administrative services company (S corp) owned 100% by an ESOP. No income tax due at the ESOP level obviously but then they say only 15% of the profits are allocated to the rank-and-file. That's the part I'm struggling with -- wouldn't allocations need to be based on compensation?"

Number of replies posted  1 reply      Number of times viewed  29 views      Add Reply

KaJay created a topic in Retirement Plans in General

IRA RMD Included in Rollover to 403(b) -- Distribute as Excess?

"A participant did not remove his 2019 IRA RMD prior to the rollover to his 403(b) earlier this year. Approximately $4,000 was not eligible for rollover. I understand the 2019 IRA RMD cannot be satisfied by simply cashing it out of the 403(b), but can the IRA RMD amount be treated as an excess in the 403(b) and pushed to the participant that way? That is how the sending firm wants it to be treated. Would treating it as an excess also satisfy the IRA RMD? I am not familiar with treating RMD amounts as excess and could use some guidance."

Number of replies posted  3 replies      Number of times viewed  45 views      Add Reply

Pammie57 created a topic in IRAs and Roth IRAs

Simultaneous Roth IRA and Roth 401(k) Contributions?

"Is it allowable for a participant in a 401k plan to max out his Roth deferrals in the plan, and also contribute to a Roth IRA for the same year?"

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

Nicipie8 created a topic in Qualified Domestic Relations Orders (QDROs)

QDRO Still Needed for Me Despite Death of My Ex-Husband (the Plan Participant)?

"Do I need a QDRO now that my ex-husband is deceased? The court already ordered that I am entitled to half of his retirement benefit. Years ago I started the paperwork for the QDRO because I was granted half his retirement as of the day we divorced. But my husband never finished them. Now he is deceased. I'm getting his Social Security. SSA informed me of my entitlement to his company's pension. I have the paperwork pleading for joinder and summons. Do I still have to get a QDRO?"

Number of replies posted  4 replies      Number of times viewed  50 views      Add Reply
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