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Message Boards Digest

March 23, 2020

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

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

COVID-19 and Privacy

"If I were to get the virus, I would WANT my employer to notify every employee, even if I worked at a large employer (as I did many years ago.) I would WANT everyone to know, in case they had any contact with me, or with any person who worked closely with me. Is it OK for an employer to notify all employees, if the infected employee gives permission? Or are there still restrictions?"

3 replies   |    60 views   |    Add Reply
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ERISAQuestions1234 created a topic in Miscellaneous Kinds of Benefits

Stafford Act Section 139 -- Tax Exclusion for Employer-Provided Lodging, Meals, Transportation, Child Care, Elder Care etc. for Essential Business Employees

"Regarding this article -- https://www.winston.com/en/benefits-blast/coronavirus-tax-free-section-139-benefits-silver-lining-on-the-cloud-of-a-novel-disaster.html

An employer operates an essential business (power) and is offering to pay (or reimburse) to have additional employees lodged at facilities or near facilities (a hotel or whatever they can come up with) plus transportation, food, child care, elder care etc... basically everything to have all-hands-on-deck for this outbreak. I'm trying to determine if these abnormal short duration benefits would be taxable. Seems like the Stafford Act may -- via a Section 139 program -- allow for the reimbursement of these expenses."

0 replies   |    32 views   |    Add Reply

thepensionmaven created a topic in Form 5500

Incorrect EIN on Form 5500

"Upon learning the client's EIN has been reported using the Trust ID, on the previous years' 5500s, for current year 5500s, we filed an original return using the correct EIN and an amended showing the previous 5500 as amended using the correct EIN and completed box 4, a-d with the EIN previously used on that years' 5500.

You would think this would be picked up by IRS upon review, but no. My client has received IRS letters and invoices for non-filing of 5500 on the old, incorrect EIN. When we respond with copies of both the original as well as amended 5500s and a letter of explanation, the client received a reduced invoice for the filing the amended return using the correct EIN.

This is a calendar year plan, initial 5500 was for 2017, filed prior to 7/31/2018. While preparing the 2018 return, we noticed the 2017 was filed using the incorrect ID. I called EFAST 2 and an individual told me to file and amended 2017 under the correct EIN, which we did, and received the DOL acceptance on 10/29/2019.

This is getting to be rather annoying, especially since we followed the procedure we were given by EFAST2, and even mentioned this is our response to IRS.

We have handled previous erroneous EIN filings the same way, and it has been our experience that IRS can take up to 4 months to straighten out their records.

I would think others have had similar circumstances, how are they being handled?"

0 replies   |    38 views   |    Add Reply

SSRRS created a topic in Defined Benefit Plans, Including Cash Balance

April 1 RMD Extension?

"I see there is talk about extension for the restatements. Is there any chance that the requirement to take the first RMD by April 1 will be extended?"

1 reply   |    68 views   |    Add Reply

B21 created a topic in Retirement Plans in General

Missed March 16 Due Date for Deductible Contribution

"Any chance the IRS would provide relief for a plan sponsor (a partnership) that filed its 2019 partnership return on 3/16/20 but is now unable to fund the pension contribution reported as a deduction on the return? An extension was not filed. Given the situation with the coronavirus and the fact that the IRS announced today that April 15 filers have a 90-day extension to file returns, would the IRS permit a plan sponsor to keep the deduction if the deposit is made as soon as possible? If not, then could VCP or SCP apply?"

3 replies   |    65 views   |    Add Reply

shERPA created a topic in Retirement Plans in General

Extension to July 15 Under IRS Notice 2020-18

"IRS Notice 2020-18 is silent on 404(a)(6) and IRAs. Do employers automatically get until July 15 to make and deduct their 2019 plan contributions? I think it should work for sole props and C corps whose returns are due 4/15 but get this automatic extension to 7/15. It specifically extends the due date of the returns and 404(a)(6) references the due date of the return. Do IRA deposits also get an extension to 7/15?

The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year.
1 reply   |    83 views   |    Add Reply

VeryOldMan created a topic in Defined Benefit Plans, Including Cash Balance

Minimum Funding for Plans with with Prior Year Funding Deficiency

"Before PPA a late contribution creating a FD for a plan year was added to the plan assets for the following year funding computations. Not clear as how PPA changed this rule. I have a pension plan that had a funding deficiency (FD) in 2018 plan year due to a late contribution of $30,000, which was deposited in Dec. 2019. For the 2019 plan year the valuation date is changed from EOY to BOY. Under 4(A)(ii), should the late contribution be included as a plan asset for funding purposes for 2019? SB instructions say not to include such contributions in line 2(a) [market value of assets] or 2(b) [Actuarial Value of plan assets]."

1 reply   |    35 views   |    Add Reply

mjf06241972 created a topic in 401(k) Plans

Coronavirus and 401(k) Deferrals

"If a company is planning to lay off employees due to the coronavirus, can it stop 401k contributions and would they restart when the employee resumes work? Is there a difference between furlough and laid-off for 401k deferrals start and stop?"

0 replies   |    46 views   |    Add Reply

AFFIS created a topic in Retirement Plans in General

Can a CBA Reduce Retirement or Disability Benefits Already Accrued?

"Can a new collective bargaining agreement reduce benefits that already have been accrued by retired employees? For instance, if a new CBA states that the monthly pension payouts will be reduced (offset) by the amount of a Social Security check if the participant is drawing Social Security, can that be done legally if the person is vested with accrued credits and currently drawing a benefit that is not subject to a Social Security offset? I thought that both are considered earned income after the required years of service. Does it depend on whether the participant is currently collecting disability or retirement?"

0 replies   |    27 views   |    Add Reply

jmartinrps created a topic in 401(k) Plans

PS Alloc based on Years of Service

"We have a new plan where the profit sharing is allocated as follows: .067% of plan compensation times number of years of service (max 15). There are two HCE's, both with 15+ years of service. There are 103 NHCE with a varying degree of years of service. How would we test this? Due to the years of service variance of the nhce's the plan would easily fail gateway (if you were to cross test) but is it even subject to that? Would this be a Benefits, Rights, and Features perhaps?"
2 replies   |    35 views   |    Add Reply

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

Upcoming Grace Period for Participant Loan Repayments?

"Has anyone heard anything about a grace period for participant loans (to prevent defaults)? A financial advisor is telling me that defaults won't be allowed to happen."

2 replies   |    33 views   |    Add Reply

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

Loan Repayments Admist COVID-19

"Hi all- Has anyone heard of IRS allowing or planning to allow deferments to plan loan payments or modification to plan loans in the midst of COVID-19? We have some clients asking that we modify their loans to a lower rate and defer payments but I couldn't find anything that allowed them to do it."
0 replies   |    19 views   |    Add Reply

Chris.Y created a topic in Distributions and Loans, Other than QDROs

Lump Sum Cash Distribution Returned to the Plan - Corrected 1099-R?

"We have an outside asset company process distributions and prepare 1099-Rs. A lump sum distribution was processed in 2019. Federal withholding submitted. 1099-R generated. In February 2020, per the participant, a stop payment was placed on the check and the funds were returned to the original plan. Withholding was not returned. Should we be correcting the 1099-R? What should be done with the withholding? It's a large asset provider, so I'm not sure that they will correct to return it."

2 replies   |    23 views   |    Add Reply

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