Message Boards Digest

November 23, 2020

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

Jakyasar created a topic in Retirement Plans in General

Client Obtained Plan's Taxpayer Identification Number for Not-Yet-Implemented Plan

"Did a proposal for CB plan but they went ahead and obtained a TIN (already have an EIN) with the plan name 'XYZ DB Plan.' Is the TIN valid? Still need to do the CB plan and would look funny with DB name. Please let me know your comments."

4 replies   |    56 views   |    Add Reply

For the most complete Proposal & Testing Software, contact DATAIR!

Sponsored by DATAIR Employee Benefit Systems, Inc.
DATAIR's Proposal & Testing System for DB/CB/DC and combo plans. Test and compare multiple plan designs. Plan Comparison, Sole Prop/Partnership reports and many more! The best support team, including actuaries to assist. 888-328-2474 or

AndrewZ created a topic in 401(k) Plans

W-2 Income from Employer Stock Buy-Back

"An employer is buying back stock from employees, which it will be reporting as taxable income on their W-2s. It seems clear that this is includable for plan purposes (including deferral contributions) for a plan using 'W-2' compensation definition (if the plan doesn't specifically exclude it) -- similar to an exercise of non-qualified stock options (NSOs).

But for employees who terminate employment prior the transaction (if the transaction happens within the later of 2.5 months or end of the year), is such compensation NOT treated as 'regular pay after severance from employment' and so excluded? (It's clearly not part of optional 'post-severance compensation.)

Treas. Reg. Section 1.415(c)-2:

(ii) Regular pay after severance from employment.-- An amount is described in this paragraph (e)(3)(ii) if-- (A) The payment is regular compensation for services during the employee's regular working hours, or compensation for services outside the employee's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; and (B) The payment would have been paid to the employee prior to a severance from employment if the employee had continued in employment with the employer.

(iii) Leave cashouts and deferred compensation.-- An amount is described in this paragraph (e)(3)(iii) if the amount is either-- (A) Payment for unused accrued bona fide sick, vacation, or other leave, but only if the employee would have been able to use the leave if employment had continued; or (B) Received by an employee pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid to the employee at the same time if the employee had continued in employment with the employer and only to the extent that the payment is includible in the employee's gross income."

4 replies   |    61 views   |    Add Reply

mz27514 created a topic in 401(k) Plans

401(k) Participant Market Risk and Longevity Risk

"Looking for feedback for the following scenario: 'Predictive equity analytics' addresses equity market risk and returns using graphical reports that warn beforehand of market downturn as well as enable capture of gains. Essentially the quantitative predictive equity analytic capability found in investment banks and financial intermediaries is made available directly to 401(k) participants in a user-friendly manner.

Would 401(k) participants be better off directly managing their accumulated wealth within their accounts if given the proper predictive equity analytic tools and training or would they be better off restricted to the menu of funding vehicles?"

0 replies   |    29 views   |    Add Reply

CMC created a topic in 401(k) Plans

Any Fix Possible for Improperly Defaulted Loans after 1099-R?

"Plan sponsor discovers participant loans were defaulted because of errors by plan sponsor (including failure to start payments) over a number of years. The EPCRS Procedure sets out the steps the participant and employer can take in combination to fix that where there has not been a deemed distribution and 1099-R. But what is the 'fix' [1] when there has been a deemed distribution and 1099-R but no actual loan offset, or [2] wehn there has been a deemed distribution and 1099-R followed by a termination or other event resulting in an actual offset? If you were to go into VCP, what corrective measures would you propose? (I understand in scenario (1), the participant can repay the defaulted loan creating basis but don't see that they gain much by doing that.)"

0 replies   |    18 views   |    Add Reply

Gilmore created a topic in 401(k) Plans

Catch-ups for Off-Calendar Plan Year

"401(k) plan year ends 10/31/2020. Deferrals for the plan year:

11/1/2019 to 12/31/2019: $4,755, all catch-up for 2019 (total $25,000 deferred in calendar year 2019)

1/1/2020 to 10/31/2020: $26,000

So the total deferrals for the plan year ending 10/31/2020, $30,755. The plan makes a 3% safe harbor nonelective, so no ADP catch-up to worry about.

If the 3% safe harbor contribution is $4,860, then I'm thinking I can allocate an additional $32,640 in profit sharing. That would be $19,500 in deferrals ($30,755 less $4755 in 2019 catch-up and $6,500 in 2020 catch-up) plus $4,860 safe harbor, plus $32,640 in profit sharing for a total 415 limit of $57,000. So the overall total contributed for the plan year ending 10/31/2020 would be $68,255. Basically the $57,000 415 limit, plus the combined $11,255 in catch-up between the 2019 and 2020 catch-up deferred during the plan year.

Does that sound correct? My admin system is treating the $4,755 in last year's catch-up as a 402(g) excess and not permitting the full profit sharing allocation."

2 replies   |    113 views   |    Add Reply

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

Missed Quarterly Contributions -- Notification of Participants

"I just took over the defined benefit plan. It has less than 100 participants (but more than 25). All the participants are either receiving payments or terminated vested (however I am not sure it is relevant to my question). AFN for 2019 has not been issued yet. Some of the quarterly payments for 2019 Plan Year have been made late (more than 60 days late it is). Plan sponsor made the required payments by October 15, 2020 to avoid the funding deficiency for 2019 plan year. From 5500 has been filed timely without funding deficiency.

I would like to issue the AFN as soon as possible since it was due October 15. Am I correct? Do I need to issue a notification to participants regarding the 'late quarterlies'? I believe I do.

If so, I would like to include the language notifying the participants regarding 'missed quarterly payments' and 'the corrective action' as part of the AFN. Where can I find a sample of the 'notification and correction' language?"

2 replies   |    40 views   |    Add Reply

Jill created a topic in Correction of Plan Defects

ADP Testing with Lost Deferral Opportunity

"Owner-only 401(k) plan with a match formula of 100% on the first 3% contributed. The owner hires an employee who becomes eligible for the plan 1/1/19 but doesn't offer him participation in the plan. The owner corrects for the lost deferral opportunity through 10/31/20 and the employee chooses to defer 5% effective 11/1/20. Normally, the ADP test is done by disregarding the improperly excluded employees so 2019 ADP Testing should be all set. What type of ADP Testing should be done for 2020?"

0 replies   |    12 views   |    Add Reply

Here are the most recently posted jobs on, a service of BenefitsLink:

View job as Trust Funds Accountant

Trust Funds Accountant  View details

RFK Medical Plan/JDLC Pension Plan
Keene CA

View job as Retirement Plan Administrator

Retirement Plan Administrator  View details

Pension Inc.
Telecommute / Green Bay WI

View job as Retirement Plan Consultant and Compliance Analyst

Retirement Plan Consultant and Compliance Analyst  View details

Alliance Benefit Group of Houston, Inc.
Houston TX

View job as Plan Administrator

Plan Administrator  View details

Aimpoint Pension
Telecommute / Pompano Beach FL

►View More Jobs

►Post a Job

►Get Instant Job Alerts, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2020, Inc. All materials contained in this mailing are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe | Privacy Policy