Message Boards Digest

April 29, 2021

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

RCK13 created a topic in Plan Document Amendments

Qualified Disaster Distributions (QDD's)-- What Proof Does a Plan Need?

"We recently had a client express interest in qualified disaster distributions (QDD's) because they're allowed by the Consolidated Appropriations Act 2021 and prior law. I realize these cannot be used if COVID is the only major disaster declared in the area. However, this client is in an area that experiences frequent and intense hurricanes, so I think they are good on the first prong below. A 'qualified individual" is an individual:

  1. Whose principal place of abode at any time during the incident period of any qualified disaster is located in the qualified disaster area with respect to such qualified disaster; and
  2. Who has sustained an economic loss by reason of such qualified disaster.

My question is surrounding what we, the TPA, would need to include on the form we provide to this client specific to proof. In certain distributions, we've required a showing of proof that the individual meets the requirements. I'm not sure if this can be treated like COVID distributions (CRD's) where they self-certify, or if we need to include some other showing of proof that participants would be required to include in their submission for such a distribution. Wondering if anyone has thoughts on what type of proof a participant would need to submit for this type of distribution?"

1 reply   |    25 views   |    Add Reply

Chris123 created a topic in 401(k) Plans

Puerto Rico Dual-Qualified Plans -- What Rules Apply?

"If a PR Plan has been dual-qualified in the U.S., must minimum participation, top heavy rules, RMD, and PPA rules be satisfied?"

0 replies   |    18 views   |    Add Reply

Christopher Wilson created a topic in 401(k) Plans

Employer Is Reimbursing Trust for Investment Advisory Fees Paid from Trust

"I have a client who is making deposits to the trust account in the same amounts as the advisory fees to 'reimburse the plan for the advisory fees.' I know that such deposits must be treated as nonelective contributions, but for the life of me I can't find the citation. Anybody?"

1 reply   |    22 views   |    Add Reply

ConnieStorer created a topic in Retirement Plans in General

Adding Self-Employed Businesses as Participating Employers -- Qualifies Under SECURE Act?

"I have a client that sponsors two plan: Cash Balance and 401(k). These have been in effect for several years. The plan sponsor is a corporation owned 50/50 by two brothers. The W-2 wages the brothers receive from the corporation are well below the annual wage limits, and the contributions are well under current year allocation limits. Their accountant called me yesterday asking about setting up a Keogh plan for one of the brothers for his Schedule C income. This was the first I ever heard about any Schedule C income. In fact, it turns out, both brothers receive Schedule C Income from a sideline business. I'd like to include the Schedule C income in their current plan without going to the expense of setting up another Cash Balance Plan and/or Profit Sharing Plan. Because the SECURE Act allows for the adoption of new plans after the end of the plan year, do you think this would include becoming an adopting employer to the already-existing plans? I'd like to add both brothers as adopting employers to the corporate Plan. What do you think?"

1 reply   |    32 views   |    Add Reply

bzorc created a topic in IRAs and Roth IRAs

CRD Included Required Minimum Distribution; OK to Repay Entire Amount of CRD?

"An individual withdraws $100,000 as a CRD in 2020, and the $100,000 includes the individual's 2020 RMD. Can the RMD be repaid in 3 years, because it was part of the CRD?"

1 reply   |    23 views   |    Add Reply

Trisports created a topic in Correction of Plan Defects

Anonymous Submission Under VCP -- What to List on for Plan Sponsor, Plan Name and EIN?

"We're filing an anonymous VCP. What should we use for plan sponsor, plan name, plan number and EIN on We'll redact the plan information in the attachments, but what should we enter on the online 8950 Form?"

0 replies   |    13 views   |    Add Reply

BG5150 created a topic in Plan Document Amendments

Ridiculous SMM Timing -- Can Wait 19 Months to Notify Participants of a New In-Service Distribution Option?

"This one always gets me. The deadline to furnish the SMM is 210 days after the plan year in which the amendment is adopted. So, if a plan amends to allow in-service withdrawals effective Feb 1, 2021, they don't have to tell the participants about it until August 2022? 19 months after the effective date of the amendment? Doesn't seem right."

2 replies   |    28 views   |    Add Reply

AmyETPA created a topic in Form 5500

Form 5500 Reporting of Unclaimed Distributions

"Plan reports show funds distributed. The following plan year the vendor characterizes the funds as unclaimed property and returns them back into plan. How would that be shown on Form 5500? More: the funds were later redistributed as checks and cashed."

0 replies   |    8 views   |    Add Reply

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