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Message Boards Digest

December 23, 2020

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

Stash026 created a topic in Defined Benefit Plans, Including Cash Balance

Contribution Deductibility for Combo Plans

"I have a plan that's just a husband and wife. They want to move to a Cash Balance/Profit Sharing combination. For contribution deductibility, do we have to integrate the plans (meaning if the Cash Balance is more than 25% of the eligible compensation, you are limited to 6% in the Profit Sharing)? Or can the plans not be integrated, allowing the full $57k in the Profit Sharing as well as the contribution in the Cash Balance?"

12 replies   |    95 views   |    Add Reply
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nancy created a topic in Form 5500

Form 8955-SSA Due But IRS FIRE Website Not Online

"I have several plans that have an extended due date to December 31, 2020 as a result of Hurricane Laura. However, the IRS Fire Website is down for maintenance until after the first of the year. Should I go ahead and file once the site is up knowing they are late and write a cause letter when penalties are assessed?"

1 reply   |    27 views   |    Add Reply

ABeach created a topic in 401(k) Plans

Employee's Compensation Includes Employer Supplemental Payments for Disability

"We have a client with unique situation with a payment to an employee. The employee has been out on short-term disability and also collects Social Security. The insurance company has offset his disability benefit by the amount he receives from SS, and the company is paying the employee for this offset. The money is not for wages nor has anything to do with work production. The plan sponsor has a signed agreement from the employee that the company will pay the taxes on this payment but will not pay the employee's 401k contribution. Will this suffice when the audit determines his payments were not all subject to the 401k deferral?"

1 reply   |    39 views   |    Add Reply

s299908 created a topic in 401(k) Plans

What Happens to My Non-Elective Safe Harbor If I Withdraw My 401(k) Balance Before Employer Makes SH Contribution?

"I recently quit my job (10/2020) and have a 401k with a 3% non-elective safe harbor formula. Usually my employer would make the entire 3% contribution in mid-February of the following year (a 1% match contribution was made on a monthly basis). If I were to make a cash withdrawal of all my vested funds prior to receiving the 3% SHNEC, what happens? Does my former employer open a new (or reopen my old) 401k account to deposit the funds? Do I receive a check? Do I get nothing? Some additional information: I am not an HCE. I'm expecting about $2,000 from the safe harbor. I'm 30 years old. I worked 1,500+ hours this year before resigning."

2 replies   |    38 views   |    Add Reply

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