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Message Boards Digest

June 22, 2020

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

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

COVID-19 Loan -- Extension and Reamortization

"Am I the first one to see this? Under the safe harbor in IRS Notice 2020-50, a qualified employer plan will be treated as satisfying the requirements of Section 72(p) pursuant to section 2202(b)(2) of the CARES Act if a qualified individual's obligation to repay a plan loan is suspended under the plan for any period beginning not earlier than March 27, 2020, and ending not later than December 31, 2020 (the 'suspension period'). The loan repayments must resume after the end of the suspension period, and the term of the loan may be extended by up to 1 year from the date the loan was originally due to be repaid.

'I was wrong.' They even said you can do the crazy thing of suspending through Dec 31, making the regular payments until the 1 year mark for the suspension, and then reamortize what is left.

'I was totally wrong.' At least we know what we have to do."

2 replies   |    60 views   |    Add Reply

Bird created a topic in Retirement Plans in General

Pooled Plan Sued for Declaring Special Valuation

"I don't think the participants can win this, but if you've been sued you've lost as a practical matter. Monday morning quarterbacking it -- the employer communicated poorly (I'm not a lawyer but it seems that some of those communications might have left them exposed), and has totally dropped the ball on moving assets to cash when it KNEW these distributions were pending."

7 replies   |    110 views   |    Add Reply

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

Distributions from Plans Using Pooled Funds

"I'm curious to hear your opinions on this lawsuit: Lipshires v. Behan Bros. Inc. Retirement Plan, No. 20-252 (D.R.I., complaint filed Jun. 8, 2020)."

0 replies   |    30 views   |    Add Reply

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

Employee Moves from One Controlled Group Member to Another

"If 2 plans are part of a controlled group, but on occasion an employee might be terminated from one employer and hired by another, is that a distributable event? Can the individual roll their balance from one plan to the other?"

2 replies   |    34 views   |    Add Reply

Jakyasar created a topic in 401(k) Plans

Total Deductible Contributions Avoid 415(c): Is My Math Correct Here?

"401k plan is sponsored by OwnerCo. -- Owner also works for another company ('EE-Co.') as an employee. Owner is over age 50. Owner will defer $6,000 in the EE-Co 401(k) plan.Owner will receive $22,000 salary from OwnerCo and will defer $20,000 into the OwnerCo 401(k) plan. So, between the 2 deferrals, Owner will not exceed $26,000 for 2020. Of the $20,000 deferral into the OwnerCo plan, the owner will treat $6,500 of the deferral as catch-up, which reduces the base deferral to $13,500. Owner also will get a $5,500 profit sharing allocation in the OwnerCo. plan. Therefore: $13,500 + $5,500 = $19,000 ... which will not exceed 100% of pay (i.e., $22,000). Agree?"

2 replies   |    49 views   |    Add Reply

Griswold created a topic in Plan Terminations

Effect of Partial Termination on Crediting of Investment Earnings

"To the extent a plan has had a partial termination and it goes back to restore the forfeited account balances of the terminated participants, does it need to credit those account balances with investment earnings for the period between the forfeiture and the restoration? Any authority for this?"

1 reply   |    9 views   |    Add Reply
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