Message Boards Digest

October 19, 2020

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

austin3515 created a topic in 401(k) Plans

Data Loss Prevention / Mimecast

"Mimecast has a feature whereby it scans outgoing emails for SS#'s. The problem is that there are too many false postives, the most annoying of which is that it seems to scan even things like people's Facebook links. So there are some clients every time I email them I have to delete their signature to avoid getting bounced. Is that commonplace with all of these tools? Is there a better mousetrap out there?"

0 replies   |    37 views   |    Add Reply

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Retired, but still reading created a topic in IRAs and Roth IRAs

Trustee-To-Trustee Direct IRA Transfers -- IRS Requires a 'Letter of Acceptance' Every Time?

"Retiree has multiple Roth IRA annuities with lifetime income riders. Retiree wants to start lifetime monthly annuity income streams, and have it deposited to his Roth (non-annuity) IRA (as a direct trustee-to-trustee transfer) to continue sheltering earnings from taxes, until the funds are spent for living expenses. While payer custodian is willing to do the transfers, they insist that each monthly transfer request for each contract be accompanied by a fresh Letter of Acceptance from the payee trustee. They say that IRS 'requires' an LOA for each transfer and that a standing LOA is not permitted.

I've done some research on this -- IRC Section 408, IRC Section 402(f), IRS Publication 590-B, IRS Form 1099-R Instructions, IRS website, etc. and can find nothing about an LOA requirement. I can't access it, but I'm pretty sure that Revenue Ruling 78-406 (1978-2 C.B. 157) introduced the direct transfer concept and elaborated on the distinction between a direct transfer and a rollover. Don't know if there's anything in it about 'required' LOA's.

As you can imagine, with multiple contracts and monthly transfers, it's burdensome on the retiree and also on the payee trustee. It's definitely got to be painful & expensive for the payer trustee to process these monthly transfers manually as one-off transactions. Can anyone confirm or dispel the myth of IRS 'required' LOA's for direct transfers (with cite)?"

3 replies   |    63 views   |    Add Reply

Stash026 created a topic in 401(k) Plans

CARES Act Changes Deadline Requirement for a Safe Harbor Plan?

"Did the CARES Act change the requirements/ability to make changes to a Safe Harbor Plan? A client asked me this, thinking a change could be made up to December 1. I don't seem to see it in the regulations."

1 reply   |    30 views   |    Add Reply

Roger created a topic in 401(k) Plans

Safe Harbor Non-Elective Contribution Eligibility When Employee Goes from Full-Time to Part-Time

"In a safe harbor match plan, a previously full-time employee has gone part-time, and is able to continue to defer AND to receive the safe harbor match. But is this the casewith a NON-elective 3% safe harbor plan? This same employee could contunue to defer, BUT would they still entitled to the end-of-year 3% non-elective contribution?"

2 replies   |    17 views   |    Add Reply

BG5150 created a topic in 401(k) Plans

Penalty for Failure to Withhold Taxes?

"Participant in plan that has brokerage accounts took a distribution of all her funds in 2019. We are just finding out about this like last week. She took the money to herself and there was no withholding. Is there a penalty for not withholding? How does it get assessed? I know there's gonna be a late fee for the tardy 1099-R."

2 replies   |    14 views   |    Add Reply

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