Message Boards Digest

May 11, 2020

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

rblum50 created a topic in 401(k) Plans

Funding on 401(k) using PPP loan

"Can the required matching contributions to a 401(k) be paid with proceeds from a PPP loan?"
4 replies   |    79 views   |    Add Reply

5500Nerd created a topic in Form 5500

SAR Deadline Changes and Text Messages for Electronic Disclosure?

"Hello, I realize that the 5500 has the special extension authorized by the IRS. The EBSA came out with its special extensions which don't apply to the Form 5500 report. However, I wondered if the Summary Annual Report of the 5500, the SAR, as a disclosure notice, would have EBSA's Disaster Relief Notice - 2020-01 extension of March 1 - 60 days after the Covid 19 National Emergency has ended. The Office of Regulations and Interpretations has not returned my calls yet on my question. Does anyone else know? Also the the EBSA press release said to use a good faith effort to issue disclosures and one of the methods was text messages. When was text messages allowed for electronic disclosures? EBSA Disaster Relief Notice 2020-01 extends the time for plan officials to furnish benefit statements, annual funding notices, and other notices and disclosures required by ERISA so long as they make a good faith effort to furnish the documents as soon as administratively practicable. The notice explains that good faith includes the use of electronic alternative means of communicating with plan participants and beneficiaries who the plan fiduciary reasonably believes have effective access to electronic means of communication, including email, text messages, and continuous access websites. "
0 replies   |    38 views   |    Add Reply

Chippy created a topic in 401(k) Plans

Form 5330

"I submitted a form 5330 as of 12/31/2018, there were over 12 times that contributions were deposited late in 2018. They deposited the earnings in 2019 and all deposits are now on time. When filling out the 5330 for 2019, do I have to list each late 2018 contribution individually on the 2019 5330 or can I just put one date and use the total."
0 replies   |    27 views   |    Add Reply

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

Defined benefit or 401k Profit share for self employed ?

"Client is self employed with $204,000 in self employment income. Client claims no need for a pension as a 401k profit sharing will allow $62,000 in contributions because he is over age 50. Client's advisor states the 25% of pay rule does not apply and the client also is allowed $6,000 as the phase -out due to income does not apply. Client files jointly. Is the client and advisor correct. The advisor states also 415 does not apply.. .Hence no need for a pension. No employees except the owner."
4 replies   |    77 views   |    Add Reply

JRSP533 created a topic in 401(k) Plans

Cares withdrawal withholding

"Just processed a wd of $100k and $10k was withheld for federal tax. I am in FL so no state tax. assuming I had no other income for the year, should I expect any additional taxes next year?"
1 reply   |    74 views   |    Add Reply

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

Aggregate 415 Limitation Question

"Assume an employer sponsors 2 defined benefit plan, running concurrently, and the Plan document for Plan A states that "the aggregate 415 limitation for all pension plans shall first be applied to Plan A"; and Plan B also says the aggregate 415 limitation shall first be applied in Plan A". Assume further that in Plan A that the computation of the Annual Accrued Benefit, before taking into account the "aggregate 415 limitation", would be X. And in Plan B it would be Y. The aggregate 415 limitation is Z, and assume further that X+Y > Z. In preparing the valuation and benefit computation, including lump sums payable, my interpretation of this provision is that X is limited to Z-Y. Is this correct? Is there another possible interpretation?"
4 replies   |    60 views   |    Add Reply

mureddy created a topic in Form 5500

Late filing - Two plans - Same EIN

"Hi, New to this forum here. I am a one-owner S-corp and started two retirement plans with my EIN at e*Trade. One individual 401k (my tax deferred contributions) and one profit sharing (my s-corp contributions), both same plan number 001. Even though individual 401k can have profit sharing in it, I was told to create a separate profit sharing account (which complicated things now). This happened in 2011. Now at the end of 2019, both the accounts exceeded the $250K limit. Now I thought of filing 5500-EZ, but after reading about it I am seriously confused. It seem the $250K limit is for the EIN and not the individual plan. Is it correct? I exceeded the $250K for the EIN at the end of 2017. Now does that mean, 1) I need to do late filing for the years 2017 and 2018? 2) Do I have to file late 5500-EZ for each plan each year? 3) Do I have to pay $1k penalty per plan or $1k penalty per EIN? 4) Or I dont have to file late, as each plan less than $250k for prior years? Is the profit sharing plan not even considered one participant and did I miss reporting from the first year? Both plans were set with plan numbers 001 but with different plan names. Is that an issue? Since no filings were made so far, can I just change one of the plan to 002 at e*Trade and file them as plans 001 and 002 or keep them as 001 with different plan name? To keep things simple, can I move/roll-over the profit sharing funds to the individual 401k plans and close the profit sharing plan and then file 5500-EZ. Will this trigger a 1099-R to IRS and complicate things. I tried to reach out to some accountants locally, but they are not familiar with these issues. Have reached to benefits related CPA elsewhere, but due to Covid no response. Thought I could get some suggestions here and even some leads to benefits CPA. If am of my questions violate any rules of this forum, I am extremely sorry. Thanks everyone. Murali"
3 replies   |    78 views   |    Add Reply

Peter Gulia created a topic in Plan Document Amendments

Can a retirement plan's sponsor adopt disaster and emergency provisions in advance?

"Some plan sponsors would prefer to adopt, once, a provision that allows whatever loans and distributions can be provided without tax-disqualifying the plan. Some would like such a provision to include what becomes allowed under future Acts of Congress. If a sponsor of a prototype or volume-submitter document presented such a provision, would the IRS approve? If a sponsor of a new individually-designed plan presented such a provision, would the IRS approve?"
5 replies   |    43 views   |    Add Reply

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