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Message Boards Digest

March 10, 2020

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

K-t-F created a topic in Retirement Plans in General

Distributions Required after Plan Sponsor Is Sold in an Asset Sale?

"Dental Practice is sold (asset sale). All employees stay at their positions. New owners take over the plan to keep the status quo. Hence the employees can continue to defer and receive the SH match. The new owners have adopted a new plan, which is a mirror of the existing plan. They want to merge the old plan with the new plan. Are we required to give the participants the option to take a distribution?"

12 replies   |    137 views   |    Add Reply
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jsample created a topic in 401(k) Plans

50% Owner lists 0 hours but compensation on census

"I have a corporation with two 50% owners. On the census, one owner is listed with $27,000 in compensation and 0 hours worked. When questioned, thinking there was an error in the hours listed, I was told that this is a year-end bonus for the owner, reported on a W-2 issued by the employer, and 0 hours worked is correct. The owner is not terminated and this is not any sort of severance pay. In prior years this owner has worked 1,000 hours and has satisfied the plan's eligibility requirements. The 50% owner with 0 hours deferred $6,000 into the plan from his bonus. I do not know if he can defer on wages with 0 hours worked. The adoption agreement counts "Hours of Service" on the basis of actual hours for which an Employee is paid or entitled to payment. Compensation definition is 3401(a) - W-2 Compensation subject to income tax withholding at the source, with all pre-tax contributions included. There are no exclusions from compensation. I could not find anything similar to this situation in the ERISA Outline book, ERISAPedia, or research on this forum. Thank you."

4 replies   |    98 views   |    Add Reply

nerd-party-administrator created a topic in 401(k) Plans

HCE Late Deferral

"Facts: - SH plan. - HCE had deferrals deducted and never deposited to the plan. - It's march of the following plan year and the deposit has still not been made. Is this just a matter of funding with missed earnings or would greater compliance measures need to be taken?"

1 reply   |    49 views   |    Add Reply

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