Message Boards Digest

August 26, 2020

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

TPG created a topic in Employee Stock Ownership Plans (ESOPs)

Merging ESOP Into Existing 401(k) Plan for C Corp

"What are the pros and cons of merging an ESOP (with half the shares unallocated) into an existing 401k, compared to a termination of the ESOP?"

3 replies   |    27 views   |    Add Reply

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cdavis25 created a topic in SEP, SARSEP and SIMPLE Plans

SIMPLE and VCP for Over 100 Employees

"Members of a controlled group each adopted separate SIMPLE plans. Together the companies are over the 100-employee count. Does each employer/plan in the controlled group need to file a VCP separately and pay a separate user fee?"

0 replies   |    17 views   |    Add Reply

Ahuntingus created a topic in 401(k) Plans

Life Insurance in 401(k) Plan

"Prospective client has Life Insurance in his account. Plan was established 1/1/2016.

Current Account Value - $137,447 (zero contributions made in 2020?); less 2019 Employee Contribution - $25,000; yields Seasoned Money Estimate - $112,447.

Max LI premium for a whole life policy: $56,223.50

Current policy: $26,100

New policy premium limit: $30,123.50 (assuming this is whole life policy subject to 50% cap)

Plan rules for LI are in section 7.5 (page 57 of the document)

Do those calcs seem correct?

Also, the same client then wants to borrow $50k from the 401(k) plan. Not from the LI policies but the non-LI balances. This shouldn't cause any issues with the 50% limits correct?"

1 reply   |    32 views   |    Add Reply

austin3515 created a topic in 401(k) Plans

Still on the Lookout for MEPs/PEPs?

"Anything going on out there for these plans? I keep hearing 'they're coming!' -- I would expect the Empowers and John Hancocks, etc. to be the ones leading the charge, but I don't hear anything."

6 replies   |    53 views   |    Add Reply

austin3515 created a topic in 401(k) Plans

Flexible vs. Rigid Matches

"We're listening to the Corbel/FIS training about plan documents. They're telling us about the new 'Flexible' vs 'Rigid' discretionary matches. Basically you have to provide notice within 60 days of funding if there is any discretion related to the ALLOCATION of the match, e.g., discretion regarding excluding deferrals in excess of X% of compensation, discretion regarding the computation period, etc. Was this new requirement imposed on all document providers?"

3 replies   |    47 views   |    Add Reply

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

Loan of Plan Assets to Individual Who Will Co-Own a Home with the Trustee

"Company owner (who is the plan's trustee) wants to lend part of his assets in the plan to a person who will co-own a private home for the 2 of them. Does the purchase make this person a 10% or more partner or joint venturer?"

3 replies   |    52 views   |    Add Reply

Jakyasar created a topic in SEP, SARSEP and SIMPLE Plans

Can I Set Up a CB/DC Combo if Client Already Has SIMPLE in Place? What if Unfunded for 2020?

"Looking to set up a combo plan (CB + DC). I've just learned that the client has a SIMPLE. Scenario 1: Client has not yet funded the SIMPLE for 2020. Can both plans be set up? No deduction issues, correct? Scenario 2: Client has funded the SIMPLE for part of 2020. What can be done if anything?"

2 replies   |    28 views   |    Add Reply

Purplemandinga created a topic in 401(k) Plans

Deferrals Withheld Between MEP and Single Employer Plan

"A sponsor left a PEO but hasn't yet established a single employer plan to accept money from the previous plan. During this time the sponsor continued withholding deferrals from paychecks based on deferral elections related to the PEO. Would a new single employer plan be able to accept these deferral contributions if new enrollment forms with deferral elections and investment choices hadn't yet been completed?"

5 replies   |    34 views   |    Add Reply

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

Missed RMD; Entire Balance Rolled Out of Plan

"A participant rolled over his entire balance to an IRA in 2019 without taking his RMD prior to the rollover. He will be taking the RMD now because it was just discovered. Is the only course of action to remedy the missed RMD by filing through VCP?"

1 reply   |    21 views   |    Add Reply

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