Message Boards Digest

July 31, 2020

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

JustMe created a topic in 401(k) Plans

Safe Harbor Plan Merges Into Non-Safe Harbor Plan Mid-Year -- SH Plan Considered to Be 'Terminating'?

"If a Safe Harbor plan (Plan B) merges into a non-safe harbor plan (Plan A) mid-year due to an acquisition, does Plan B receive the benefit of a 'terminating' plan under the safe harbor regs from the first day of the plan year through the merger? Then, as of the merger date, Plan A tests the plan with the full year information for the employees of Plan A and then, from the date of the merger through the end of the plan year, for employees of Plan B? I know there is no guidance on this, but how are others handling?"

7 replies   |    61 views   |    Add Reply

BTG created a topic in Retirement Plans in General

Investment Firm as First Service Organization for 414(m) Purposes?

"When is an investment advisory and asset management services company considered 'service organization' under the ASG rules? Under the regs (which I recognize are still just proposed), while such a company would not appear to fall within any of the enumerated fields in 1.414(m)-2(f)(2) (except maybe 'consulting,' but I think that is a stretch), it seems to me that it would easily qualify as a 'non-capital intensive organization' under the general definition in 1.414(m)-2(f)(1), according to the last sentence (i.e., the gross income of the business consists principally of fees, commissions, or other compensation for personal services performed by an individual). However, there is a specific carve-out in 1.414(m)-2(f)(1) for 'banks and similar institutions,' which are deemed to be capital intensive. So, I guess the question is whether an investment advisory and asset management business constitutes a 'bank or similar institution' within the meaning of 1.414(m)-2(f)(1) -- correct?"

5 replies   |    53 views   |    Add Reply

Dennis G. created a topic in Distributions and Loans, Other than QDROs

RMD Needed from Assets of DB Plan That Terminated in 2019?

"I need some guidance on an RMD for 2020 for a terminated defined benefit pension plan. The plan year-end was 9/30/19. As of 9/30/2019 the plan held assets that produced a $100K RMD for 2020. However in October 2019, the plan sponsor (1-person plan) rolled the remainder of the DB assets to his IRA. I know that, under the CARES Act, DCs and IRAs can waive RMDs for 2020. But what about this situation? Does he need to take the $100K from the IRA to satisfy the RMD requirement for the DB Plan for 2020?"

8 replies   |    50 views   |    Add Reply

Trisports created a topic in 401(k) Plans

QSLOB Election - Who Is the Employer for Purposes of Form 5310-A?

"Our client is a controlled group that acquired a new entity last year. The client determined it can operate the new entity as a QSLOB. Who should be listed on the Form 5310-A as the 'employer'? The parent company or the new entity?"

1 reply   |    33 views   |    Add Reply

austin3515 created a topic in Nonqualified Deferred Compensation

Purchase Insurance Protection Against Bankruptcy of Unfunded Deferred Comp Plans?

"This company -- -- apparently insures against the risk of bankruptcy of the plan sponsor. Sounds too good to be true. Why wouldn't the bankruptcy trustee get the insurance proceeds? Wouldn't the proceeds inevitably be an asset of the business? Curious if anyone has seen this before or has any thoughts."

4 replies   |    39 views   |    Add Reply

AJ North created a topic in 401(k) Plans

Participant Becomes 100% Vested at Partial Plan Termination -- Even Going Forward?

"We have a plan that experienced a partial plan termination that resulted in some participants being made 100% vested. The employer has since rehired one of those participants made 100% vested. Does that rehire remain 100% vested in contributions going forward, even though the accrued years of service to calculate vesting does not add up to enough to be 100% vested?"

2 replies   |    32 views   |    Add Reply

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