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Message Boards Digest

October 2, 2020

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

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

How Much Time Is Needed to Prepare a Typical Form 5500-SF?

"What is a reasonable estimate for time spent by an experienced retirement plan administrator to prepare a 5500-SF filing for a DB plan including AFN, considering the assets and the participant counts have already been reconciled, the actuarial valuation report has already been completed, and the valuation software produces attachments, AFN info, etc. (Datair)? This is for plain vanilla situations, no life insurance, etc. Excluding time spent for the 8955, I am thinking 3 hours to get it to the client for signature, and another hour or so to get it filed. Is that a reasonable expectation on average?"

1 reply   |    47 views   |    Add Reply
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cpc0506 created a topic in Plan Terminations

415 Limits for Terminating Plan

"We have a plan that wants to terminate in October. The consultant has requested that the amendment include language that the Limitation Year for 415 purposes will be the calendar year. They want to be sure that compensation of $285,000 and maximum allocation of $57,000 will be permitted for the 2020 plan year.

It is our understanding (of the Relius document) that the Plan Year that includes the effective date of plan termination ends on the effective date of plan termination. This provision applies for all plan administration purposes, including the application of the top-heavy requirements under Code §416, the limitation year under Code §415, and any allocation conditions imposed by the Plan -- in essence creating a short Limitation Year. And in a short Limitation Year, the limits are prorated. The 'maximum permissible amount' will not exceed the 'defined contribution dollar limitation multiplied by a fraction, the numerator of which is the number of months in the short Limitation Year and the denominator of which is twelve (12).' I am hoping that someone else has encountered this issue and can provide some guidance."

2 replies   |    31 views   |    Add Reply

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

PBGC Form MP-100 for Missing Participant in a Cash Balance Plan

"Does anyone have experience filling out the MP-100 for a missing participant in a cash balance plan? If so, is the present value reported equal to the hypothetical account balance or do you need to calculate a life annuity at normal retirement using the plan assumptions and then convert back using the PBGC assumptions?"

4 replies   |    44 views   |    Add Reply

Jakyasar created a topic in 401(k) Plans

Switching from Matching Contribution Safe Harbor to Non-Elective for 2020

"Existing 401k plan with SH match. Looking into adding a CB plan for 2020. Can it be switched to non-elective for 2020 and, if yes, 3% or 4%? Any other issues not asking?"

2 replies   |    34 views   |    Add Reply

Jakyasar created a topic in Retirement Plans in General

Profit Sharing Plan Allocation/Deduction Issues

"Takeover plan. First time for Form 5330. Two shareholders - both HCE. 2018 salaries $200k each thus max $100k deduction limit. Deposited $110k during 2018. Each got $50k allocation and suspense account got $10k (5330 penalty was paid). 2019 salaries were $220k each thus max $110k deduction limit. Deposited $110k during 2019. CPA informed me $108k was deducted and does not want to amend the return for 2019. Assume no earnings for 2019, to simplify. Is the 2019 amount for 5330 penalty $12k? Any other way to reduce? Because the 415(c) limit of $56k is not violated, can any of the excess amount be allocated to the shareholders even if not deductible?"

2 replies   |    34 views   |    Add Reply

alexa created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Accumulators in a High Deductible Health Plan

"We have a non high deductible plan along with a HDHP. Currenly our non-HDP accumulates covered expenses simulataneously while our HDHP accumulates expenses seperately going forward for 2021. We want to be consistent. What is the standard?"

0 replies   |    17 views   |    Add Reply

BG5150 created a topic in Retirement Plans in General

415 Excess in Pooled Account

"Have a client with a pooled 401k/PS plan. One owner had same earned income for 2018 and 2019. In 2018, they deposited the 415 max, let's say, $27,000, plus the full catch-up. In 2019, because the K! was identical, they deposited the max 401k and same PS as 2018 amount in August 2020. So, because the 401(k) limit went up $500 and with the same comp, she is over the 415 limit by $500. How does the 415 refund work when it's all deposited tot he trust after EOY? Do I just pull only the $500? I'm not gonna do a mid-term valuation for a $500 refund. I don't think I can just forfeit $500 of PS since 401k is the first 415 correction."

2 replies   |    20 views   |    Add Reply

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