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Message Boards Digest

November 26, 2019

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

SEllis created a topic in 401(k) Plans

Excessive Distribution of Excess Contributions

"Our office was engaged to review prior administration for a 3-year period (2016, 2017 and 2018). After proper determination of highly compensated employees, we've found that excess contributions have been overstated by a significant amount to one of the highly compensated employees for 2 of the 3 years. (Overstated by $13k for 2017 and $10k for 2018.) I haven't found any specific guidance on the correction for the improper distribution of excess contributions. Has anyone had this type of correction?"

Number of replies posted  1 reply      Number of times viewed  43 views      Add Reply

BG5150 created a topic in 401(k) Plans

Is This Plan Up the Top-Heavy Creek Without a Paddle?

"Plan started in 2018. Only the owners deferred. Obviously, ADP failed. Refunds done. Obviously, Plan is TH for '18 and '19. Owners stopped deferring for 2019. Not sure if any were made, but let's call it zero. Is there any way around the $40,000 Top Heavy contribution that is due for 2018 given this fact pattern? (No TH for 2019, as no deferrals for keys). I thought, aggressively, we could have had the refunds as 12/31/18 liabilities and accrued it back and thus have EOY '18 balance of zero. But one key was over 50, and some of his deferrals were considered catch-up and stayed in the plan."

Number of replies posted  8 replies      Number of times viewed  95 views      Add Reply

Snicky created a topic in Plan Terminations

Sponsor Decided 401(k) Plan Will Terminate in 2020 -- Custodian Won't Allow Further Distributions

"A 401k plan has decided to terminate on 1/1/2020. The company is closing. Only 3 participants; one is terminated. The terminated participant submitted distribution paperwork on 10/31/2019 to move his account to an IRA but the 401k provider froze the plan as soon as they were notified of a plan termination. The other two participants are also submitting paperwork to roll their money out (one is a part owner). Does the 401k provider have the right to freeze the plan? When can the participants expect to roll their money over? After 1/1/2020?"

Number of replies posted  4 replies      Number of times viewed  55 views      Add Reply

BG5150 created a topic in 401(k) Plans

Controlled Group, Two Plans -- Is This Match OK?

"Controlled group. Two different plans. Must be tested together due to coverage. Plan One has Discretionary match: 100% up to 4%. Plan Two has Discretionary match: 0.00%. Do I have to test this for coverage? BRF? will zero discretionary match fail one or both current/effective availability?"

Number of replies posted  2 replies      Number of times viewed  23 views      Add Reply
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