Message Boards Digest

April 30, 2021

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

Gilmore created a topic in 401(k) Plans

SH Nonelective - First Plan Year

"A new 401(k) plan is setup later in 2020 with an effective date of 1/1/2020. Profit sharing effective 1/1/2020, deferrals and 3% SH Nonelective effective 10/1/2020. All ees hired on or before 1/1/2020 are eligible for the plan. Comp is full year comp (not date of participation). Employee is hired in 2019 and thus a participant in the plan on 1/1/2020, but terminates on 8/1/2020. Question: Is this participant required to receive the 3% safe harbor because they were eligible to participate in the Plan on 1/1/2020, or do they not receive the safe harbor because the safe harbor portion of the plan was not in effect until after their date of termination? Thanks very much."
2 replies   |    41 views   |    Add Reply

TPA Selling Business created a topic in Operating a TPA or Consulting Firm

TPA Selling Business

"We are starting the process of selling our TPA business. We focus exclusively on administration, compliance, and plan documents. Our book of business consists mainly of DC Plans plus a handful of DB plans. If you are in the market for buying a book of business or know somebody, please let me know."
1 reply   |    49 views   |    Add Reply

Chippy created a topic in Retirement Plans in General

Loans from Profit Sharing Plan

"A physician practice would like to make a loan to a surgery center as an investment from the plan. The loan will earn 10% interest and it'll be for 1 or 2 years. He would like to loan them $100,000 out of $1.8 million assets. This is a pooled profit sharing plan, 6 participants. Is this investment allowed? If so, anything that must be done to allow for it?"
7 replies   |    67 views   |    Add Reply

ldr created a topic in 401(k) Plans

starting an owner only 401(k) plan after reclassifying the only employee

"Good afternoon to all, A prospect, a doctor, has one employee who is currently paid W-2 wages. He wants to terminate her as a W-2 employee and then engage her as a 1099-R independent contractor. After all that is done, the next month he wants to start up an owner-only type of 401(k) plan that covers only himself and his wife, who he will bring onto the payroll. Do you see issues with this? We feel like it's a very aggressive posture to take but not necessarily an illegal one. Your advice is always appreciated."
17 replies   |    83 views   |    Add Reply

Cardscrazy created a topic in Cross-Tested Plans

415(c) and Administering the Mega Backdoor Roth for 401(k) and ESOP Plans

"The 415 test we just performed for plan year 2020 included the sum of the 2020 401(k) deferrals, the lump sum 2020 401(k) match determined and deposited in 2021, [there were no 401(k) forfeiture allocations made in 2020 or in 2021], the 12/31/20 ESOP contribution allocation, and the 12/31/2020 ESOP forfeitures allocation. Under this test let's say there is 415(c) room to do a Mega Backdoor Roth Contribution and for the sake of argument let's say the room is $20,000. I assume that this after-tax $20,000 should have been contributed in 2020, with an immediate Roth 401(k) conversion after each payroll contribution if that's how we do it. What happens if the participant over-contributes, for example, we allowed an after-tax contribution of $22,000 in 2020 vs the finally determined $20,000 that the max should have been. I assume the $2,000 plus earnings could have been returned by April 15, 2021 to avoid double taxes? Is that how a Mega Backdoor Roth is administered? Generally speaking, it always involves a return of excess before April 15? The earnings are taxable in the year of distribution, so no 2020 W-2 needs to be changed, right? Your advice would be appreciated. Thank you!"
0 replies   |    19 views   |    Add Reply

TPApril created a topic in 401(k) Plans

terminating SEP & starting 401k & SECURE Act

"1. It's my understanding company cannot have both SEP and 401(k) plan in same year (defined for this question as calendar year). If no contribution has been made for current year in the SEP, can it be terminated as of end of last year and the 401(k) plan then started mid year? Or would the 401(k) have to wait until the next year? Understood that the PS plan can start up this year since last SEP contribution was for last year. 2. As we know, under SECURE Act, plans can now be started up prior to tax returns filed the next year. Is there any kind of exception here where an SEP has not been terminated yet, but no contribution has been made for the prior year, so that the PS plan can actually start up and be effective for the prior year? Otherwise, this provision doesn't particularly benefit employers with SEPs."
2 replies   |    38 views   |    Add Reply

ConnieStorer created a topic in Form 5500

2021 PBGC Forms

"Has anyone successfully uploaded PBGC Forms after the update on PBGC's website. We can log onto the site with no issues. We can even see all our Plans via "List Plans". However, when we select "Upload Filings" the Schema Validation - Select XML File button does not appear. We sent an inquiry to PBGC and they think it is a problem with our web browser. We have logged onto the PBGC site using Internet Explorer, Google Chrome, Microsoft Edge and Fire Fox and we have the same issue with every one. If anyone has had success what web browser are you using? Thanks,"
1 reply   |    12 views   |    Add Reply

Pammie57 created a topic in Mergers and Acquisitions

Company sold to an Investment Group - effect on 401k Plan

"I just got a call from the plan sponsor's controller. The company was purchased by an Investment Group. the current owner is retiring. It is my understanding that they bought the stock and not just company assets. the company has sponsored a 401k for many years, and is a large audited plan. The corporate attorney sent an email to the controller saying ' the sale is final today - notify payroll and the TPA to shut the plan down today." Geez - apparently no thought was given to the 401k during the sale negotiations. I got the impression that the Investment group will not be sponsoring a 401k but I don't know why they would want to terminate this benefit for 100's of employees. Anyway, I am not an attorney, but need some guidance. It is my understanding that whenever a plan terminates, there must be notices sent out (like 30 days?) and the plan amended to current law. I assume the new company (investment group) has the right to terminate the plan, but I don't think they can just shut it down as of today. Thoughts and advice from you who have dealt with this type of mess/opportunity before. Thanks for any insight."
1 reply   |    17 views   |    Add Reply

Belgarath created a topic in Plan Document Amendments

Required Amendments for individually drafted plan

"Just came upon one of these. The Plan essentially uses FIS Money Purchase document, with certain modifications - not drastic. It did receive an IRS determination letter in January, 2016. There were no Amendments on the IRS required amendment list for 2017, 2018, or 2019 that would have any effect. (The disability procedures are already covered appropriately in the SPD). I'm trying to recall if there were any 2016 amendments that would have been required, and I don't believe so. Anyone recall anything specific for 2016? I know I'll have to look it up anyway, but just wanted to see if anyone recalls it off the top of their heads. Thanks."
0 replies   |    10 views   |    Add Reply

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

View job as Retirement Plan Administrator

Retirement Plan Administrator  View details

Premier Plan Consultants
Telecommute / San Diego CA

View job as Client Service Representative

Client Service Representative  View details

Nexus Administrators, Inc.
Telecommute / Fresno CA

View job as Retirement Plan Relationship Manager

Retirement Plan Relationship Manager  View details

ERISA Services, Inc.

View job as Benefits Specialist

Benefits Specialist  View details

Air Line Pilots Association
Mc Lean VA / Rockville Centre NY

View job as Project Specialist

Project Specialist  View details

Wespath Benefits and Investments
Glenview IL

View job as Retirement Specialist

Retirement Specialist  View details

Main Line Health
New York NY / PA

►View More Jobs

►Post a Job

►Get Instant Job Alerts, Inc.
56 Creeksong Road
Whittier NC 28789
(407) 644-4146

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

Copyright 2021, 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