Message Boards Digest

March 25, 2021

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

Trisports created a topic in Form 5500

No Form 5500 Filed Since 403(b) Plan Inception in 2004

"We took on a client -- the sponsor of a 403(b) plan -- that has never filed a Form 5500. The plan established in 2004. We are filing the late returns under the DFVC program. Because Form 5500-SF is not available for years prior to 2009, is it OK to file Form 5500 from 2004-2008 and Form 5500-SF for 2009-2019? Or should we use the same Form for all open years?"

1 reply   |    34 views   |    Add Reply
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pam@bbm created a topic in Retirement Plans in General

Report a Short Plan Year on Form 5500 for Calendar Year Plan's Termination as of January 31?

"I need help understanding when to use a short plan year. Employer closed the business 01/31/2021. Plan amendment has been done terminating plan as of 01/31/2021. Is this a short plan year for just the one month, even though we'll be processing withdrawals in the coming months? Do we date the Form 5500 01/01/2021 - 01/31/2021, or 01/01/2021 - 12/31/2021?"

2 replies   |    41 views   |    Add Reply

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

Issue 2021 Form 1099-R Now, Rather Than Waiting Until January 2022?

"We have a client who is a dentist selling his practice and terminating his plan. All 7 participants are rolling their money over to IRAs. I expect this should be complete by the end of the week. Is there any way to issue the 1099-Rs now rather than waiting until January?"

4 replies   |    59 views   |    Add Reply

Paul Porretta created a topic in Multiemployer Plans

Taft-Hartley Trustee Requirements for Terminated Multiemployer Pension Plan

"A multiemployer pension plan terminated due to a mass withdrawal in 2003. A few employers are still paying reallocation liability, and the number of participants has dwindled down to about 150. The trust agreement reflects the Taft-Hartley / LMRA section 302(c)(5) requirement for two employee trustees and two employer trustees. The two most recent employer trustees retired (their companies closed, too) without appointing successor trustees, and no one at the remaining employers has stepped up to serve as an employer trustee.

If a multiemployer plan is unable to engage successor employer trustees, what happens? Can the employee trustees continue the plan on their own?"

1 reply   |    23 views   |    Add Reply

DMcGovern created a topic in 401(k) Plans

Is Rounding by an Investment Company Normal?

"Working on a 401(k) plan's trust accounting. Calendar year plan. I noticed one participant's balances from 12/31/19 to 1/1/2020 changed. The safe harbor match source at 12/31/19 was $1.58; at 1/1/2020 it was $0.99. The Employee Pre-Tax source at 12/31/19 was $1.27; at 1/1/2020 it was $0.65. When I asked the investment company what happened to the differences, the response was:

'At 12/31/2019, the participant had deminimus balances in various source/fund combinations (for example, 7 cents in American Funds New World R6 fund / Employee Pre-Tax source). The $1.21 difference comes from these small amounts that were removed from the system at 1/1/2020. Our understanding is that this essentially amounts to rounding in the recordkeeping system.'

I'm not used to money just disappearing from a participant's account. Others find this 'normal'?"

8 replies   |    98 views   |    Add Reply

Catch22PGM created a topic in 457 Plans

457(f) Employee Contributions

"A 457(f) plan was drafted for an executive of a 501(c)(3). The employer is making non-elective contributions and the executive is able to make additional elective contributions. The plan document is in an adoption agreement format and the contribution section shows: Contributions to Defined Contribution Accounts are permitted (check all that apply):

a. [ X ] Participant Contributions.

b. [ ] Matching Contributions.

c. [ X ] Nonelective Contributions.

d. [ ] 401(k) Wrap Contributions.

The CPA for the 501(c)(3) has posed the following: 'We've run into some issues regarding the 457(f) plan implementation with the various payroll providers that we have engaged with. They have been unable to implement a pre-tax Employee 457(f) code with no limit on contribution amount per the plan documents. Is there an IRS publication that supports this provision?'

I have some, but not a lot, of experience with 457(f) plans and I've never had this questioned. Has anyone out here with more 457(f) experience run into this, know of any specific publication, or have a suggestion about how to respond?"

0 replies   |    14 views   |    Add Reply

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