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Message Boards Digest

July 13, 2020

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

BG5150 created a topic in Correction of Plan Defects

Doc says participant directed, plan is pooled

"Plan Doc says participants will have investment direction over their accounts, but all the money is pooled into one account. I think the easiest fix is to retroactively amend the plan to say it's pooled an move one. (The population is owner, spouse and one low-paid employee who only gets a small SH & PS each year). Can they do that? SCP even though that's not explicitly one of the reasons to have a retroactive amendment under EPCRS?"
1 reply   |    59 views   |    Add Reply

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

non-ERISA 403(b)?

"If a 403(b) plan allows for employer contributions (such as the option is selected in the AA), but does not fund the contributions, can the plan be a non-ERISA plan? I'm thinking not, but don't believe that 29 CFR 2510.3-2(f)(3)(iv) confirms that for me. There's no "funding," but does the "option to fund" indicate 29 CFR 2510.3-2(f)(3)(iv) has not been met??"
3 replies   |    59 views   |    Add Reply

RRivera created a topic in 401(k) Plans

Rehired Employee- Prior participation in company's 401k

"Hello, This is the situations:
  • Employee met 401(k) eligibility prior to termination on 2/15/2019
  • Employee hired at 6/22/2020
  • Without the employee making any affirmative election, system generates a 401(k) contribution on her first paycheck based on the contribution prior to termination.
  • The plan has automatic enrollment ( July 2, 2020- automatic enrollment disclosure sent to employee)
My questions is as follows:
  • Doesn't the employee supposed to affirmatively elect participation again once rehired?
  • If so or not, where in the rules does it state this?
My limited understanding is that unless the employee is automatically enrolled based on due process of notification, there has to be an affirmative election. Am I wrong?"
1 reply   |    64 views   |    Add Reply

hameshatumkochaha created a topic in 401(k) Plans

Urgently Need help: 2018 Excess Employer contribution self-correction

"Hi, I have a sole proprietorship PLLC business. For the year 2018, my CPA incorrectly calculated Maximum Deductible Employer Contribution to my solo 401k, which was contributed in April 2019. I found out in May 2020 that it was over by $687. I self-prepared by 2019 taxes in May 2020, and I correctly calculated Maximum Deductible Employer Contribution $9554. In the recent call with the CPA, he says this qualifies as "self-correction" with recommendation to reduce 2019 contribution from $9554 by $687 (excess employer contrib for year 2018) BEFORE July 15, 2020. $9554 has been kept as cash till date. He says I need not file any forms etc i.e. no Form 5330 needed. Questions: 1. Is it correct that I need not file Form 5330? 2. What are the consequences of not filing Form 5330 if I am expected to by the IRS? 3. If I should file Form 5330 and the CPA is not supporting but I still file, am I dead in water if there are issues? Against CPA advice me filing Form 5330 ensures that he certainly won't cover the fees and taxes associated with his mistake... How would you proceed if you were me? I need to remove $687 ASAP from e-Trade to be effectively out of the account before July 15th and avoid further issues. Please help! Thanks a bunch!"
3 replies   |    78 views   |    Add Reply

alexa created a topic in Form 5500

Severance plan filings

"What type of severance plans require a Form 5500 filing? If filing is required, how does one determine participant count? Is it all active employees eligible for the plan? Do you need to include those who have severed still receiving severance benefits? 1 of our subs who also has a separate severance program has never filed a Form 5000 (since 2015). Assuming should have is the DOL delinquent filer program the only option. active employees currently eligible for 2019 is 211. Thanks Alexa"
1 reply   |    29 views   |    Add Reply

mjf06241972 created a topic in 401(k) Plans

Daily Valuation

"What is a daily valuation vs. a annual or monthly valaution? for a 401k plan with a recordkeeper, is this considered a daily valuation? Thank you."
3 replies   |    37 views   |    Add Reply

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