BenefitsLink.com logo   

BenefitsLink
Message Boards Digest

November 6, 2019

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

Cynchbeast created a topic in Retirement Plans in General

Fees by Service-Provider to Handle Distributions from the Plan: Can Pay from Plan Assets?

"We have a PS plan with pooled accounts and several terminated participants with small balances (under $200). We will be sending to PenChecks for check processing and the fee they charge is $35 per participant. The sponsor would like to pay the charges from the plan's forfeitures. Is this a legitimate plan expense?"

Number of replies posted  4 replies      Number of times viewed  61 views      Add Reply
[Advert.]

Did you have a successful, stress free 5500 filing season?

Sponsored by Wolters Kluwer
The best 5500 reliability in the industry combined with patented technology, consistent and timely released software updates, and outstanding customer support make ftwilliam.com the market leader in form 5500 filing software. Learn more!

Mr Bagwell created a topic in 401(k) Plans

Cross Tested, 3% SH, and Top Heavy, Gateway Comp -- One Participant Skews Benefit Percentage Wildly

"Cross Tested Plan, 3% SH non, Top Heavy, Semi Entry at 4/1 and 10/1. I have an employee with a legitimate participating compensation of $163.01. Participant was eligible 4/1 and terminated 4/5. Employee is entitled to 3% safe harbor and then a 2% profit sharing for the year. So the Gateway 414(s) compensation would show $163.01 with a 401a allocation of $8.15. So I need to check to make sure the employee is receiving at least 3% compensation on full year comp for top heavy status. Employee needs another $516.80 to receive top heavy minimum. Full year comp was $17,498.33. So here' the rub and the question: The benefit percentage of the employee in question would be like 300% plus based on the 524.95 401(a) total and compensation of $163.01. Would you leave it this way? Or do something different? On this plan, there are generally 2 to 3 employees that come in mid-year and need a top heavy minimum. Where everyone else would show a benefit percentage of 5%, the 2 or 3 might show as 5.8%. Gateway then passes, and then I go to the next steps of making sure the other test pass. I just haven't seen a legit participating comp scenario skew the percentage this wildly."

Number of replies posted  2 replies      Number of times viewed  51 views      Add Reply

Alex16 created a topic in Employee Stock Ownership Plans (ESOPs)

Time and Form of Distribution from ESOP to Me as a Terminated Employee

"I'm a 25-year employee of a company that started an ESOP in 2007. I was terminated in 2011 with 60 percent vesting. Company took out a 10 year $32M loan for the ESOP. Loan was paid back in 2018. I am expecting paperwork for first distribution any day. Distribution according to administrator will be over 5 years. My understanding from a pamphlet from NCEO (an ESOP advocacy organization) is that since I was made to wait more than 6 years for my distribution, I am now entitled by general rules to get a lump sum distribution. Is this correct? Where would I find the Internal Code section that requires this? More than $200k is involved and I would very much prefer to have a lump sum (I'm over 60 years old and on SSDI now). Administrator & I do not speak. Thanks for any direction and info you can give me."

Number of replies posted  1 reply      Number of times viewed  40 views      Add Reply
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

Copyright 2019 BenefitsLink.com, Inc. All materials contained in this mailing are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than BenefitsLink.com and EmployeeBenefitsJobs.com are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe | Privacy Policy