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Message Boards Digest

February 25, 2020

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

JustMe created a topic in Correction of Plan Defects

Failure to Adopt a Qualified Plan -- Use VCP to Retroactively Adopt?

"Has anyone had any luck with an owner-only plan VCP submission to retroactively initially adopt a plan?"

Number of replies posted  4 replies      Number of times viewed  49 views      Add Reply

rocknrolls2 created a topic in Distributions and Loans, Other than QDROs

Can Money Purchase Plan Be Amended to Allow Distribution in Final Stages of Cancer?

"A client has a money purchase plan in which distributions are permitted for the following reasons: normal retirement after 25 years of service, or at age 62 with at least 10 years of service or the later of age 65 and the fifth anniversary of commencing participation in the plan; early retirement at or after age 55 (but before age 62) and completion of at least 10 years of service; deferred retirement after 5 years of service; or disability retirement contingent on at least 10 years of service and a Social Security determination of disability. If Social Security denies a benefit award, the trustees shall make a determination of disability in their discretion based on proof of disability through a physician of the employee's choice. The employee has stage 5 kidney cancer. While he could qualify for a trustee discretionary determination of disability? He only recently applied to Social Security. He might not live until the Social Security disability determination. The only other possiibility is a deferred disability. Could the plan be amended to allow any participant in imminent risk of death to apply for a distribution of his full account balance?"

Number of replies posted  2 replies      Number of times viewed  41 views      Add Reply

ERISAQuestions1234 created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Does a Self-Funded Health Plan Have to Rebate Premiums That Produce a Surplus?

"Is a self-insured health plan that charges premiums that produce a surplus, i.e., the total amount collected exceeds the claims paid/incurred, required to rebate some portion back to the employee? I can"t seem to find an answer that clearly states that self-insured plans would be required to do so.

I have found PLR 200007025 (https://www.irs.gov/pub/irs-wd/0007025.pdf) which deals with another issue but notes that the self-funded plan discussed has the following structure 'All premium payments (including the portion of the non-partner employee premium paid by Taxpayer) will be deposited into a dedicated account from which administrative expenses and eligible medical expenses under the Plan will be paid on behalf of all Plan participants. If the total premium payments are in excess of the claims and expenses incurred for a plan year, the excess will be used to pay claims and expenses of the Plan incurred in the following plan year and thus reduce premium payments for all participants in that following (or subsequent) plan year.' The PLR ultimately concluded that the plan qualifies as a health insurance arrangement, but this is a PLR and nearly 20 years old.'

Number of replies posted  1 reply      Number of times viewed  32 views      Add Reply

coleboy created a topic in Retirement Plans in General

Form 1120-S Schedule K-1

"We recently received K-1 for the partners. I'm not as familiar with the K-1's for the Form 1120-S as I am with the others. I'm not sure where to find the earnings that I will need to be used in the profit share allocations. Can someone direct me?"

Number of replies posted  1 reply      Number of times viewed  25 views      Add Reply

RatherBeGolfing created a topic in Correction of Plan Defects

IRS Whistleblower Informs ARA of Change that Could Doom Voluntary Corrections

Source: https://www.asppa-net.org/news/irs-whistleblower-informs-ara-change-could-doom-voluntary-corrections

Excerpt: "Information indicates that in the next couple of weeks procedures in the VCP program will be updated in a manner that will subject substantially more cases to the Examination function within IRS. Essentially, if information requested by the IRS is not sent in by practitioners within a 21-day window, the case will be automatically referred to Examination. What’s more, if the taxpayer withdraws a VCP case, it will be referred to Examination. Moreover, if the taxpayer misses the 21-day window and the case is referred to Examination, the taxpayer will not be allowed to re-submit the case for consideration under the VCP. If the taxpayer disagrees with how the compliance failure should be corrected, the case will be referred to Examination. These procedures apparently will be automatic, meaning that clearance will not be required to refer a VCP case to Examination. Rather, a decision to NOT refer a VCP case to Examination would have to be requested and approved--a decision that, under the circumstances, seems unlikely to be granted in most cases. Shockingly, the new rules will apply to cases already submitted for VCP consideration, including those that might never have been submitted in the first place had this change in protocol been communicated, such as if a taxpayer was on travel during a 21-day period."

Number of replies posted  4 replies      Number of times viewed  60 views      Add Reply
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