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Message Boards Digest

June 9, 2020

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

Will J created a topic in Distributions and Loans, Other than QDROs

Employee Wants CARES Act Distribution But Had No Financial Impact from COVID-19

"Plan sponsor has an employee requesting a CARES Act withdrawal. The employee has disclosed in an email that he hasn't had a negative financial impact from COVID-19 -- he just wants the money to invest outside of the plan. The withdrawal paperwork requires trustee signoff. Should the trustee sign off on the withdrawal knowing that the employee has admitted that he hasn't had a financial setback? Thoughts?"

4 replies   |    78 views   |    Add Reply
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Chris DeMay created a topic in 401(k) Plans

Late Safe Harbor/Profit Sharing

"First year of employer's plan was 2018. The 2018 contribution was $70,751.10. Plan sponsor is a sole proprietor. $61k of this was his self-employed 401k/safe harbor/and employer profit sharing. $1,750 was his spouse's safe harbor and profit sharing. The remaining $8k is for his rank and file safe harbor and profit sharing.

[1] I assume he goes through VCP to correct the late contributions, correct? [2] How do we impute lost earnings? I would expect to find the market lower today than 10/15/19. [3] Any issues with deductibility? I think we need to amend 2018 return for the contribution and deduct in 2020. [4] Any other issues with 404 and 415 by making the 2018 contribution in 2020? The 2019 contribution will be made by the 10/15 due date."

1 reply   |    39 views   |    Add Reply

BG5150 created a topic in 401(k) Plans

Deferral from a Bonus

"Plan does not allow for separate election for bonuses. Participant elected $500/pay period for 401(k). Bonus is coming this week as a separate check. Do they take out the $500 from the bonus, too?"

10 replies   |    92 views   |    Add Reply

bevfair created a topic in Communication and Disclosure to Participants

What We've Got Here Is Failure to Distribute a SAR

"What are the repercussions for not timely distributing the SAR? Is the correction to distribute as soon as possible following the discovery of it not being distributed? I've searched and can't seem to find any answers. No participants are asking for it, but the client is preparing for their 5500 audit and the auditor asked for documentation proving when it was distributed."

0 replies   |    20 views   |    Add Reply

JustMe created a topic in 401(k) Plans

Partnership Dissolving, New Partnership Forming -- What Separation or Severance Rules Apply? And Other Issues.

"[1] If I have a partnership that dissolves (and likewise, terminates its 401(k) plan) and a few partners from that partnership start a new business, hire basically the same staff, and start a new 401(k) plan, what rules apply? [2] Is the new partnership a predecessor employer for terms of service crediting? [3] Do the staff members that went from Old partnership to New partnership have a distributable event? [4] Do the coverage transaction rules of 410(b) apply to the New partnership plan? [5] Do I care about this if Old partnership plan terminated and New partnership started 'anew' and both plans were safe harbor?

Potential wrinkle -- or, perhaps, opportunity for planning advice -- [6] What if New partnership simply spins out of Old partnership's plan and then Old partnership terminates the 'remaining' plan? Any change in answers above? Clearly no distributable event issue since the assets would come to New partnership in the form of a trustee-to-trustee transfer; assuming service crediting would automatically apply; but what of coverage issues?

[7] Is there a reason why one would want to terminate the plan rather than the spin-off solution? I'm assuming the New partnership would 'take on' any disqualification defects of the Old partnership plan in the spin-off, whereas those qualification defects would terminate with the Old partnership plan if it terminated."

0 replies   |    18 views   |    Add Reply

George bloor created a topic in Qualified Domestic Relations Orders (QDROs)

QDRO Processing at Microsoft Taking More Than a Year

"I am the ex-husband of a Microsoft employee. A judge-signed 'QDRO' still hasn't been processed by Microsoft -- it's been over a year! What can I do?"

4 replies   |    54 views   |    Add Reply

Chiswick created a topic in 401(k) Plans

QDRO -- What's My Next Step? Ex-Spouse Has Passed Away

"My divorce was final in August of 2019. We had QDROs drafted by a qualified plan attorney and I signed mine. Ex-wife had mental health issues and was hospitalized for attempts on her life. She succeeded in March 2020. My attorney states that now her estate will need to be probated. She told me that whatever decision was determined by the judge in divorce decree regardless of whether or not ex-wife signed the QDROs before her untimely death would still prevail. Neither her son or brother has come forward as executor. Is my next step to file a motion with the court to get an executor appointed? I would like to get the QDROs processed but not sure what the process is? My attorney is just taking a wait and see approach right now."

1 reply   |    44 views   |    Add Reply

Dave Baker created a topic in How to Use the Message Boards (a.k.a. Forums)

Do you know that BenefitsLink has free daily email newsletters? Please respond via this poll.

"Do you know that BenefitsLink has free daily email newsletters? (The BenefitsLink Retirement Plans Newsletter and the BenefitsLink Health & Welfare Plans Newsletter.) I'm concerned that maybe the menu on these message boards hasn't been effective in telling folks know about them. I would very much appreciate your responding via a click on one of the answers in the poll above. Your response and the responses of others are anonymous."

5 replies   |    69 views   |    Add Reply

mjf06241972 created a topic in 401(k) Plans

Entry Date Basic Scenario

"Plan has 1 year wait and entry on the following 1/1 or 7/1. Someone meets the year and now wants to enter the plan in February. Do they have to wait until July (next entry date?) What's the timeframe after the entry date to enter the plan?"

3 replies   |    43 views   |    Add Reply

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