Message Boards Digest

October 15, 2020

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

jkdoll2 created a topic in Defined Benefit Plans, Including Cash Balance

Freeze a Section 412(e)(3) Plan?

"Are you able to freeze a 412(e)(3) plan that is fully funded with life insurance and annuities? If so, what about the premiums that are required?"

2 replies   |    39 views   |    Add Reply
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Stash026 created a topic in 401(k) Plans

Is Form 5500 Due In Year 1, If No Contributions Made?

"I have a few clients who signed Profit Sharing documents for 2019, but due to COVID opted not to make their contributions and instead plan to start in 2020. Since there were no contributions in 2019 and the assets are $0, is it necessary to file a Form 5500 with $0 assets?"

4 replies   |    51 views   |    Add Reply

ConnieStorer created a topic in Plan Terminations

Distributions Restricted by Office of Foreign Access Control

"Hoping someone out there has also experienced a DB plan termination (covered by PBGC) where the investment firm has refused to cut checks to participants who are on the US Treasury's OFAC (Office of Foreign Access Control) list, presumably due to drugs or terrorists involvement.

In our client's case there are two participants, total lump sum = $110K. The participants are working with an attorney who has signed distribution election forms on their behalf. One or both of these individuals are no longer in this country. They both have elected a lump sum payment.

Not sure that the PBGC missing participant program is a viable option since they are not missing.

In addition, the client is not happy that the cost under the missing participant program is $135K rather than the $110K lump sum amounts. Does anyone have a suggestion? The client wants to close out the plan as soon as possible but does not want to end up with a legal nightmare."

0 replies   |    12 views   |    Add Reply

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

Does a 412(e)(3) Plan Get an Extension to 12/31/20?

"Does a section 412(e)(3) plan get an extension to 12/31/20 to make a 2019 plan contribution, and, if so, does the plan need to file a 5500 by 10/15 not showing the contribution, or is it extended also?

1 reply   |    17 views   |    Add Reply

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

Failure to Include Schedule SB

"Does anyone know what the repercussions are for failing to include a Schedule SB? Is it similar to failing to include an auditor's report on an audited plan and the client will receive a letter from the DOL providing 45 days for the client to correct the filing?"

0 replies   |    18 views   |    Add Reply

Jakyasar created a topic in Retirement Plans in General

What Top-Heavy Benefit Does HCE Get in a Combo Plan?

"DB/DC combo, both plans top heavy. DB does not provide t/h and also no t/h for key under DC. Plans tested together. I have owner, a non-owner HCE and NHCE, total 3 participants. Non-owner HCE gets 0.05% in DB for 401(a)(26). NHCE is only covered under DC. For 2020, gateway requirement is 5%. The owner does not want any PS allocation and will only get 3.5% of compensation as AB in the DB plan. Under gateway, NHCE gets 5% in DC.

What is the minimum t/h I have to provide to the non-owner HCE under the PS plan? 3% or 3.5% or 5%?"

2 replies   |    17 views   |    Add Reply

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