Message Boards Digest

March 3, 2020

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

thepensionmaven created a topic in Form 5500

Form 5500-SF Filed Late, with DFVC Box Checked by Mistake

"We took over a plan recently for which the Form 5500-SF was filed but the box 'DFVC' was checked by mistake. The form was filed late. We have EFAST receipt. IRS would have charged $425 had not the DFVC box been checked. I called EFAST and was told all I had to do was refile an amended return without checking DFVC. But I'm a bit concerned about IRS. Client has no problem paying the $425, but I'm sure they will assess a penalty for 'late payment.' Just wondering which way to go."

0 replies   |    25 views   |    Add Reply
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30Rock created a topic in 401(k) Plans

Hardship Distribution Due to Eviction That Has Already Occured

"Participant is living in her car due to being evicted last week. The plan uses the IRS safe harbor hardship standards which list a hardship may be taken to 'prevent eviction or foreclosure.' Is there a way for the participant to qualify for a hardship on account of an eviction that has occurred already? She received a court order of eviction for a date in the past -- last month -- but she's just now applying for the hardship distribution. Of course, now she does not have rent, but she needs money to live!"

2 replies   |    63 views   |    Add Reply

Belgarath created a topic in Cafeteria Plans

Use a SIMPLE Cafeteria Plan?

"Suppose you had a business with only 5 employees, which only wants to make employer contributions to an HSA for its employees, because the employer can't afford to to pay insurance premiums. All employee/insureds are under a HDHP. Is there any reason why a 'SIMPLE' 125 plan wouldn't be appropriate here? Employees would presumably also contribute to the HSA."

0 replies   |    16 views   |    Add Reply

BG5150 created a topic in Computers and Other Technology

Can Datair Calculate a QNEC for a Failed Test?

"Does anyone know if Datair will calculate a QNEC for a failed test? If so, how?"

0 replies   |    11 views   |    Add Reply

C. B. Zeller created a topic in Correction of Plan Defects

Correction for Failure to Hold Assets in Trust?

"On a recent takeover, we found that the account for one of the two participants is an IRA. The plan is a profit sharing plan and not a SEP or SIMPLE. Contributions for this participant are being recorded in the IRA as rollovers, however no distributions were reported on the Form 5500 and the value of the IRA was being included in plan assets. The obvious correction is to transfer the IRA assets to an account which is under the trustee's control. Whether this can be self-corrected or needs to be done under VCP would depend on whether the failure is significant, as it has extended well beyond 2 years. It could be considered significant in that it affected 50% of plan participants and a substantial portion of plan assets. It might also be considered insignificant as there was no impact to any participant's financial or tax situation due to the failure. Has anyone ever encountered this type of failure before? How did you handle it?"

1 reply   |    38 views   |    Add Reply

chuTzPA created a topic in Operating a TPA or Consulting Firm

Plan's Rights Upon Termination of TPA

"Reviewing prior TPA contract. There is a 45-day notification requirement to terminate. What rights does TPA firm have to provide billable services in that time period even though Plan does not want them?"

4 replies   |    55 views   |    Add Reply

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

Include Distribution Processing Fee in Amount Subject to Tax Withholding?

"Distribution requested at $1,000. Related Fees are $100. Would the 20% withholding apply to $1,000 or to $900? (Would 1099-R reflect a $900 distribution or a $1,000 distribution?)"

7 replies   |    101 views   |    Add Reply

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

RMDs for Deceased Participant But Can't Find Any Beneficiaries

"We took over a plan and discovered that a participant died ten years ago and her balance is still in the plan. Had she still been alive, she would have hit 70-1/2 a few years ago. All the plan sponsor has for beneficiary information is a few names and phone numbers, and when they were called, all are no longer in service (and there was no SSN information, so any detailed search is out). The old plan document (before we restated it when we took it over) said that all benefits would have to be paid out within five years of death... and that clearly wasn't done. The prior TPA was just one person at a CPA firm who was doing bare minimum (calcs, 5500s, amendments/restatements), so it seems this never was discussed. I don't think that our usual rollover partner, Millennium Trust, takes distributions for deceased participants (at least, not knowingly). And it seems a little late to try and pay it to an estate now. Any suggestions for the best thing to do with this $1,600?"

2 replies   |    40 views   |    Add Reply

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