Message Boards Digest

February 12, 2020

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

DR245 created a topic in SEP, SARSEP and SIMPLE Plans

SIMPLE IRA -- Many Issues, Many Years -- Fixable?

"I just found out a week ago, while having my taxes prepared, that our company offered the SIMPLE IRA plan. I noticed the 'X" on box 13 and to be honest, never looked/noticed before. Please excuse my fail to notice previous years.

I started in 2012 and checked all my past W-2's and all had the check from 2013 on. I asked the owner about this and he setup a meeting with me a few days later. After initial investigation on his part he came to the conclusion that I wasn't aware/notified of the plan and he was concerned and assured me that this was 100% unintentional. He stated the program was established/implemented in 2008 and he's aware that some employees have been contributing and others haven't. I should mention he's VERY hands off in these situations and relies on other parties to take care of HR types of tasks, given we are so small and we don't have an HR department.

I confirmed with other co-workers and most all were totally unaware as well. One employee in particular has been employed since 2005. Since we've always had 2 facilities (corporate/warehouse), up until 2017, it's feasible to understand a potential communication issue (albeit unlikely) due to 2 sites but still not excusable. The employer recognizes the severity of this and is working with others to understand the impact and come forward with a plan to amend/repair. I want to stay positive and optimistic and take him at his word about the total lack of proper communication and give him the benefit of the doubt with this revelation.

My concern is how something like this (involving possibly up to 10+ employees [past/present]), spread out over that 11-year time frame and how this will possibly be rectified? If I can assume this was an honest mistake, as the owner stated, can this be fixed by the tools/guidelines in place for this sort of thing? My hope is that it can because I would obviously want this to be a viable program and would like the years I missed out on, to be properly/fairly compensated and have a good program going forward while I'm here.

Basic details: Plan established 2008. Magically appeared on my 2013 W2 and ever since then (box 13). (I will say that the EE that has been with the company since 2005, verified that the checkbox was not checked until 2013 as well so that's a little concerning.) Notification/forms were not presented for a majority of the off-site facility EEs and can't speak for the corporate side EEs. Employer said he signed up for the 3% matching option (I'm aware of how those work since I've been studying the ins and outs of the SIMPLE IRA program feverishly since I found all this out). Employer did state that our broker did tell everyone but I know this is obviously not true and I haven't seen him since I started in 2012 and he's never spoke to me about anything, that I can be sure of.

Trust me, based on all I've been reading concerning similar situations, I realize the word 'egregious' comes to mind but wanted to find out from the professionals in this forum if this plan is recoverable or a lost cause? I think that explains my predicament."

Number of replies posted  2 replies      Number of times viewed  50 views      Add Reply

SPARK Global Public Policy Forum -- June 23-24, Washington DC

Sponsored by SPARK
The retirement services industry's leading event: comprehensive agenda designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Record Keepers -- focus on global retirement public policy and expansion of pension reform occurring worldwide.

msmith created a topic in Plan Terminations

Plan Termination Amendment Incorporating Changes Required by the SECURE Act

"I have a non-Safe Harbor 401(k) Plan that will be terminating by 04/01/2020. According to the ERISApedia webcast, an amendment is required for terminating plans ("presumably" -- their word). I have not seen any language for such an amendment. Anybody?"

Number of replies posted  5 replies      Number of times viewed  65 views      Add Reply

Gilmore created a topic in 401(k) Plans

Controlled Groups and 'Compensation' for Allocation and Testing Purposes

"An individual owns is 100% owner of a company sponsoring a non-elective safe harbor 401(k) plan. After several years the same individual starts a new company in in which he owns 85%. The new company will not be adopting the existing 401(k) plan and will not adopt it's own plan. The plan document defines compensation as all compensation paid by the 'Employer' and references the controlled group/affiliated service group code sections. Am I correct that for allocation purposes, if a participant earns compensation in both companies, all of the compensation would need to be included unless the plan was amended to specifically exclude it? Further, if the compensation from the new company was to be excluded under the plan, the compensation would need to be tested for it to be used for testing purposes and the safe harbor contribution?"

Number of replies posted  1 reply      Number of times viewed  23 views      Add Reply

RatherBeGolfing created a topic in Estate Planning Aspects of IRAs and Retirement Plans

Stretch IRA Alternatives?

"With the 10 year payout requirement for non-designated beneficiaries, what are your thoughts on using a charitable remainder trust to facilitate a lifetime (or 20 year) income stream? Obviously, it does not have all the advantages of the stretch, but it does provide for tax deferred growth and income stream beyond the 10 years."

Number of replies posted  0 replies      Number of times viewed  12 views      Add Reply, Inc.
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