Message Boards Digest

February 28, 2020


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

hunter001 created a topic in Plan Document Amendments

Create a Retroactive Participation Agreement for a Plan Sponsor in a MEP?

"It is my understanding that a multiple employer plan must have a participation agreement in place for all entities including the sponsoring plan. If the sponsoring entity does not have a participation agreement can this be self corrected or must it go through VCP filing?"

7 replies   |    41 views   |    Add Reply

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

Deadline for Making Requested Distribution

"What with a current downturn in the market, how long can a plan sponsor wait to distribute assets, having received completed distribution forms, including 30-day waiver (for a pooled account)?"

4 replies   |    55 views   |    Add Reply

Dougsbpc created a topic in Correction of Plan Defects

In-Service Withdrawal Violation

"We took over the administration of a 20 participant 401(k) plan about 6 months ago. The plan uses one of the popular investment platforms. It works very well for the 401(k) plan. Apparently, over the past 3 years up to 10 participants (all under age 59-1/2) have taken in-service distributions of all sources (including salary deferrals). They claim they all wanted to move the accounts to their IRAs that are invested only in no load funds and have no fees. We did notice two participants took lump sums and did not directly transfer to IRAs. Could this be corrected under VCP? If all just transferred to IRAs perhaps the fix would have been moving the amounts back to the plan (with earnings/losses). However, the lump sums pose a problem. Any thoughts?"

1 reply   |    42 views   |    Add Reply

Pammie57 created a topic in 401(k) Plans

Hardship Withdrawal Request Under Final Regs

"I realize that the HS withdrawal regs expanded the money sources and include earnings in the amounts now available for hardship. However, if the plan document still says 'deferrals only', do they have to allow distributions from safe harbor monies, etc.? Or is that going to continue to be an optional choice? I know they don't have to take loans anymore or stop the deferrals as in the past. Just wondering what to tell this client."

4 replies   |    39 views   |    Add Reply

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

Why Show Defaulted Loan on the Books at Date of Plan Termination?

"We had a participant in a plan take a loan, paid three installments and defaulted on the loan. Then the plan terminated. We've paid out all but three participants. I noticed that the investment company is carrying an accrual for the unpaid balance of the loan. This makes no sense to me. The loan is out of the plan, the participant terminated employment prior to the plan termination, the participant defaulted and was issued a 1099R. What am I missing here?"

1 reply   |    24 views   |    Add Reply

cathyw created a topic in 401(k) Plans

Safe Harbor 401(k) with New Controlled Entity

"A large (5,000+ participant) 401(k) plan has a 30-day wait for deferral and SH match for full time employees, and a 1-year wait (1,000 HOS) for part-time employees. The plan sponsor acquires an entity with 100 employees (most of whom are NHCEs) in November 2019 in a stock deal. The plan sponsor wants to bring the new entity into the plan during 2020 for deferrals only, and then start match contributions in 2021. Is there any problem with the new entity adopting the plan mid-year (it doesn't currently maintain any 401(k) plan) with 30-day wait for deferral contributions (granting service back to date of acquisition) and 1-year wait for match? Will this in any way affect the safe harbor status of the plan?"

2 replies   |    36 views   |    Add Reply

legort69 created a topic in 401(k) Plans

Is the 2020 ADP Refund Date March 13 or Is It March 16?

"Which date is the actual final date to make the refund sans penalty? Also... Folks gonna be mad with their refunds with the market correction."

2 replies   |    65 views   |    Add Reply

thepensionmaven created a topic in 401(k) Plans

Effect of Roth Deferral on W-2 Reporting

"Participant W-2 as follows: boxes 1,3,5 = $53,140.23; Roth deferral = $1,840. Isn't the Roth deferral contained in the above? The accountant is adding the Roth deferral to the above. Plan's definition of compensation is W-2 plus all deferrals. Which calculation is correct?"

2 replies   |    26 views   |    Add Reply

bzorc created a topic in 401(k) Plans

Solo 401(k) Deduction for 2019 -- What's the Maximum?

"Sole proprietor has net income of $25,000 and maintains a solo 401(k) Plan (please ignore the self-employment tax issues here). Want to maximize the amount put into the Solo(K). Is the amount that can be contributed for 2019 $25,000 (sole proprietor is over 50), or $30,000 ($25,000 deferral plus 20% of net income of $5,000)? Reading the IRS publication on this does not provide a definitive answer."

0 replies   |    17 views   |    Add Reply, Inc.
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