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Message Boards Digest

June 18, 2020

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

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

SECURE Act Extended the Deadline for Adopting a DB Plan?

"Did the SECURE Act extend the deadline to adopt a DB plan until the date of the tax filing as well? Meaning, if I have a company that has a 6/30/2020 plan year end, do I have until the tax deadline to adopt a plan or must it still be signed by 6/30/2020?"

1 reply   |    36 views   |    Add Reply

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

Preparation of Schedule SB in Light of the Extended Minimum Funding Deadline

"So if the minimum funding deadline's been bumped to 1/1/2021 instead of 9/15/2020, how would Schedule SB be prepared for a client who makes their deposit in November? Show $0 made on the 5500 due 10/15 and simply amend the filing when the date's confirmed? (Or are we expecting any sort of ruling providing an extension on just the SB part of the 5500 filing, perhaps?)"

2 replies   |    48 views   |    Add Reply

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

CARES Act Distribution: Can Participant Under Age 59-1/2 Withdraw Safe Harbor Money?

"If someone under the age of 59.5 wishes to take a withdrawal based on the CARES Act, are they still restricted on money type(s)? In other words, can they withdraw their Safe Harbor money? I haven't had anyone ask for a withdrawal until now, surprisingly. And I have searched for an answer, and can't find it. I swear I've read this somewhere, so forgive me if it's been answered. Thanks!"

1 reply   |    42 views   |    Add Reply

AlbanyConsultant created a topic in Retirement Plans in General

Forgot to Make Profit Sharing Deposit

"Calendar year plan, integrated pooled PS only. Client forgot to deposit the 2018 profit sharing until sometime in January 2020 (still tracking down date to see if it was 'in transit' by 12/31/19). Let's say it was sufficiently late in the month so that argument doesn't hold water (if it even can in the first place). I had a vaguely-related question a couple of years ago, and Tom Poje was great enough to find some IRS language from a 2010 ASPPA Q&A: "Contributions made after the Section 415 timing date of 30 days after the tax return due date are considered to be annual additions for the following year. However, if consider the contribution a self-correction under EPCRS, it is permissible to relate this back to the earlier year. If the contribution is made after 12/31, you are clearly under EPCRS. [One of the exceptions to the 415 timing rule is an erroneous failure to allocate. See Treas. Reg. 1.415(c)-1(b)(6)(ii)(A). EPCRS clearly treats post-415-period deposits that relate back to a prior plan year as an annual addition for the year to which it is meant to be paid, but EPCRS applies only after the 12/31/09 deadline. Therefore, there is a lack of guidance for the period between 30 days after the tax return due date and the end of the 12-month regulatory correction period.]"

Does that mean we get to treat this as a correction under EPCRS now? That seems almost too easy. Here's Treas. Reg. 1.415(c)-1(b)(6)(ii)(A):

"(ii) Special timing rules -- (A) Corrective contributions. For purposes of this section, if, in a particular limitation year, an employer allocates an amount to a participant's account because of an erroneous forfeiture in a prior limitation year, or because of an erroneous failure to allocate amounts in a prior limitation year, the corrective allocation will not be considered an annual addition with respect to the participant for that particular limitation year, but will be considered an annual addition for the prior limitation year to which it relates. An example of a situation in which an employer contribution might occur under the circumstances described in the preceding sentence is a retroactive crediting of service for an employee under 29 CFR 2530.200b-2(a)(3) in accordance with an award of back pay. For purposes of this paragraph (b)(6)(ii), if the amount so contributed in the particular limitation year takes into account actual investment gains attributable to the period subsequent to the year to which the contribution relates, the portion of the total contribution that consists of such gains is not considered as an annual addition for any limitation year."

Does it seem to be a generous interpretation of this Treasury Reg that seems to be looking at more extraordinary circumstances to stretch it to cover a situation like this? Is there any other way out? Or is the doctor, who was of course maximized for 2018, doomed to a $1,000 allocation for 2019?"

3 replies   |    80 views   |    Add Reply

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

Funding DB Plan After Plan Termination

"We have a defined benefit plan that terminated in 2018 and was underfunded at the time of termination. The plan sponsor wants to fund the shortfall now and then pay out the benefits. Is this permitted because the plan terminated or would the funding need to have occurred in 2018?"

3 replies   |    55 views   |    Add Reply

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