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Message Boards Digest

November 7, 2019

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

EDB created a topic in SEP, SARSEP and SIMPLE Plans

Concerns with Financial Advisor Handling SIMPLE IRA

"A few years ago (2016), I was hired to manage a company with a SIMPLE IRA. They'd been using the same financial advisor/group to manage the SIMPLE because it was established many years prior. Because I knew nothing about this type of IRA, I did a bunch of research. What I found was concerning, though I wasn't confident I fully understood the IRS guidelines. I spoke with the advisor and he didn't seem able/willing to give me a straight answer, but never told me different when I told him I thought we were doing things incorrectly. All seemed OK until this year. We're set up with a 1 year, $5k, 3% match. The company/advisor was not offering enrollment to all eligible employees -- only those hitting the $5k threshold AND classified as full-time. The company was requiring a full calendar year of employment before being eligible and then allowing enrollment starting the following Jan. 1. (I started March 2016 and was told I wasn't eligible until Jan. 2018 because I had to be employed for a full year first. Based on what I'd read it was my understanding that I was eligible to start Jan. 1, 2017 -- which I did.) The advisor was not distributing the annual notice/election information prior to the Nov. 1 deadline. Hopefully I was correct, as I made all of those changes noted above (length of service doesn't matter, just $5k earned in any one previous calendar year to be eligible for start date Jan. 1, notices are given out prior to Nov. 1 with a 60 day election period for Jan. 1 plan start, part-time employees meeting the $5k are eligible, etc.). I usually have the advisor come out in mid-November to meet with each employee to go over their options, answer questions, etc. That gives them time to decide what they want to do, make the election/change and I can be ready for changes come Jan. 1. This year the advisor notified me he is switching all SIMPLE meetings to January. Is that OK? Obviously, he can meet with people in January, but don't I want them making their elections/changes during Nov./Dec. -- Plus the fact that I then won't have elections/changes until after the start of Jan. 1 could mean the initial 2020 contributions could be wrong and make more work for me. I admit, I don't know SIMPLE IRAs. However, I don't really feel confident that our financial guy does either. If my gut is right, I'm ready to find someone else to help us with this. I realize SIMPLEs are somewhat flexible just because the rules/penalties are pretty loose, but if there are rules, I want to follow them!"

Number of replies posted  4 replies      Number of times viewed  73 views      Add Reply
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earth2lisa created a topic in Qualified Domestic Relations Orders (QDROs)

No QDRO on File with Plan Administrator

"My husband was previously married for 4-1/2 years. That marriage ended in 1991 and his ex-wife was awarded 50% of his defined benefit pension that accrued during their marriage. A QDRO to this effect was created and filed with the court. It was his ex-wife's responsibility to submit the QDRO to the plan administrator. My husband is expecting to take early retirement next year and contacted his benefits office to determine how much in dollars his ex-wife would be receiving so we can plan our retirement finances. He was told there was no QDRO on file. If he retires and begins receiving benefits, can she submit the 29-year-old QDRO at the point and if so, would he have to return a portion of the benefit he received to be given to her? Or is there a statute of limitations (or something like that) on submitting a QDRO to a plan administrator?"

Number of replies posted  3 replies      Number of times viewed  59 views      Add Reply

DDB BN created a topic in 401(k) Plans

Form 1099-R Not Filed for Loans

"We took over a plan that had brokerage accounts. Each participant had an individual brokerage account for deferral and SHM contributions and there was a pooled account for PS contributions. The participant loans were taken out of the participants' balances in the pooled PS account and the repayments were also made to the pooled account. We have since transitioned the plan to the John Hancock recordkeeper platform. Off-calendar year plan end is Feb. 28. Two participants with loans had terminated, one in 2017 and the other in 2018. The deemed loans had not been removed from plan assets on the 5500 filings. Should we amend prior year returns, or report on the filing for the 2/28/19 year-end? Because a 1099-R was never prepared for these terminated participants (one has not been paid out yet; the other has received a partial distribution and will receive the remainder of her balance in the next week), how should we proceed regarding the non-issuance of the 1099-R for the appropriate years?"

Number of replies posted  0 replies      Number of times viewed  24 views      Add Reply
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