Message Boards Digest

June 4, 2020

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

Santo Gold created a topic in 403(b) Plans, Accounts or Annuities

Restatement of 403(b) Plan Document Needed Even If Plan Is Frozen?

"We have had a 403(b) plan that has been inactive for well over 10 years. It is a hospital plan that was previously bought out and taken over by a new medical organization. No new contributions going into the plan past 10 years, just withdrawals. The plan has never had more than 100 participants and currently has around 50 accounts in it. Because the plan data is easy to obtain, the new organization has chosen to file 5500s each year even though I don't they they are required to. The deadline for a new 403(b) document is almost here (June 30). Although the plan is frozen and allows no new participants, a new document is still required, correct?"

1 reply   |    21 views   |    Add Reply

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AlbanyConsultant created a topic in Retirement Plans in General

Starting a New Plan with PPP Money

"A CPA's client has PPP money left over and has no retirement plan. Rather than return it, he'd like to open a profit sharing plan for his employees and pre-fund it with the PPP money (understanding that at the moment it may not be deductible). Okie-dokie?"

3 replies   |    63 views   |    Add Reply

goldtpa created a topic in 401(k) Plans

BOGO: COVID Loan and COVID Distribution

"Client wants to take a COVID-related loan of $100,000 plus take a $100,000 COVID-related distribution. I know that the $100,000 COVID distribution limit is from all plans but I'm not sure whether that includes loans."

2 replies   |    49 views   |    Add Reply

Trisports created a topic in 403(b) Plans, Accounts or Annuities

403(b) Plan Never Formally Adopted a Plan Document or Filed a 5500, But Other Than That...

"We were asked to assist a client who had a 403(b) plan since 2004 but never formally adopted a plan document or filed a Form 5500. If the client adopts the plan document before the June 30 deadline, are we in compliance, or do we need to file a VCP for the plan document issue? Is the June 30 deadline only for defects to an existing plan document or can we use it for a plan that never had a plan document? For the late 5500, the client will filed under DFVCP."

1 reply   |    30 views   |    Add Reply

JustMe created a topic in Correction of Plan Defects

Owner Had No Eligible Compensation After All But Piggybank Already Fed

"We recently discovered that our client/owner didn't have any eligible plan compensation but has funded the maximum 415 limit to both DB and DC plans for years. Thoughts on how to correct aside from basically removing all contributions and amending the company's tax returns?"

2 replies   |    49 views   |    Add Reply

BenefitsBum created a topic in Plan Terminations

Line 19 of Form 5310 -- Reporting of Rollovers

"Any practical suggestions for responding to line 19, which requires submission of proof that any rollovers or asset transfers received by the plan applying for the determination letter were from a qualified plan or IRA? For instance, is it sufficient to describe the plan's rollover process in general? Or is the IRS looking for something more particularized for each rollover accepted?"

0 replies   |    21 views   |    Add Reply

bonavito44 created a topic in Defined Benefit Plans, Including Cash Balance

DB Plan Terminates Before Due Date for 2019 Funding

"We have a client that has terminated his DB plan in May 2020. It is a calendar year plan with sole owner as only participant. 2019 minimum funding has not been made and there are no funds to make it. CARES Act appears to delay 2019 minimum funding until January 1, 2021. [1] How to complete 2019 Schedule SB: show minimum funding as $0? [2] Because the owner executed a majority owner's waiver of accrued benefits to match the remaining assets, and the 2020 minimum funding is $0, does the 2019 contribution ever have to be made?"

1 reply   |    31 views   |    Add Reply

Stash026 created a topic in 401(k) Plans

Top Heavy Plan Uses Safe Harbor Match But Sponsor Wants to Avoid Top Heavy Minimum Contribution This Year

"We have a Plan that is Top Heavy and utilizes a Safe Harbor Match. In prior years they've made Profit Sharing Contributions, and therefore have made the necessary Top Heavy Minimum contributions. Due to the economic climate this year they are likely not going to make a Profit Sharing Contribution for 2019. I know that the rule is if there are no additional contribution/forfeiture allocations there is no Top Heavy Minimum. I just wanted to make sure that it was a year-to-year decision, and that they were still exempt of the Top Heavy minimum if there was no Profit Sharing made for that year. Thanks in advance!"

1 reply   |    35 views   |    Add Reply

AJC created a topic in 401(k) Plans

Deferral Deductions -- Taken by Which Business, Partnership or Corporation?

"A partnership is owned 50/50 by two separate individual S Corp owners. It sponsors a 401(k) plan. The partnership's guaranteed payments are reported to and included in each corporation's K-1 from the partnership and therefore included as gross income on the S Corp tax return. The retirement contributions are then deducted on the S Corp's tax return also. At that point, the reporting of the income and deductions for the S Corp owners and individual partners are the same. The only difference is that the guaranteed payments from the partnership are no longer subject to self-employment tax on the S Corp tax return. Should the S Corp W-2 that each partner receives be reduced by the 401(k) contributions since the entire amount of 401 (k) contributions is already being deducted on the S Corp return, which is then included in the S Corp K-1?"

3 replies   |    41 views   |    Add Reply

Retired, but still reading created a topic in Continuing Professional Education

Free Online Continuing Education Opportunities During 2020

"Thought that I'd share some opportunities to rack up some free CE hours online: [1] CPA Academy -- lots of free courses, as well as some that you can pay for. In addition to some retirement plan topics, ethics, and retirement planning there are a lot of other interesting presentations - see <>. [2] IRS webcasts -- there are general IRS topics as well as retirement plan topics and ethics. I realize that this is late notice, but tomorrow June 4, there's a free 2-hour ethics webcast on Circular 230 that's perfect for ERPAs and Enrolled Agents -- see <>"

0 replies   |    18 views   |    Add Reply

ratherbereading created a topic in 403(b) Plans, Accounts or Annuities

403(b) Match Is Based on Fiscal Year Comp But Plan Year Ends on December 31

"I have a 403(b) plan that calculates the matching contribution each year using compensation during its fiscal year (e.g., this year's match is calculated on comp from 7/1/2019 through 6/30/2020). The plan year is 1/1 - 12/31. The sponsor has done this since before I came on board. Anything wrong with it? The document doesn't address it, except to say a matching contribution shall be determined by the employer with respect to each plan year. Compensation is W-2 wages increased by elective deferrals for all contributions (no exclusions)."

2 replies   |    21 views   |    Add Reply

reader created a topic in Correction of Plan Defects

Matching Contribution Made for Ineligible Employee

"If an employee received a match before they were eligible in the year prior (so before they met the 1 year requirement), can this be corrected? I'm not seeing anywhere details on this type of correction. Can it be put into a 'suspense account' still even though it's crossed calendar years?"

3 replies   |    30 views   |    Add Reply

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