Message Boards Digest

May 18, 2021

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

Claude created a topic in SEP, SARSEP and SIMPLE Plans

SEP IRA 3-Year Eligibility Requirement

"Small business owner established a SEP IRA 3 years ago and the business contributed to the SEP IRA for the owner each year. During that 3-year period, the small business had no other employees but operated with independent contractors. On January 1, 2021, the independent contractors were converted to employees and some additional employees were hired. The SEP agreement (Form 5305-SEP) provides, in part, that the employer agrees to provide discretionary contributions to IRAs of all employees who are at least 21 years old and 'have performed services for the employer' in at least 3 of the past 5 years. Does the 3-year eligibility clock for the employees start to run as of January 1, 2021 (when they became employees), or does it go back to the time that one or more of the employees started working for the business as an independent contractor?"

2 replies   |    49 views   |    Add Reply
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Belgarath created a topic in Humor, Inspiration, Miscellaneous

Annual Tax Lament

"Yes, it is that time of year again -- the annual tax lament, to the tune of 'Yesterday' by the Beatles. Remember, it is only when the final line is truly sung from the heart that one can appreciate the scope of anguish and angst that the artist is attempting to convey…

Yesterday.... Income tax was due, I had to pay...

All the funds I tried to hide away...

I don't believe, I'll eat 'till May.


I'm not sure that I am fiscally...

Ready for responsibility...

Oh yesterday, came suddenly.

Why, I Owed so much, I don't know, I couldn't say.

May-be Forms were wrong, how I long, for yesterday!


Seemed like prison time was on its way...

Now I need a place to hide away...

While keeping IRS at bay.

Why, I Owed so much, I don't know, I couldn't say.

May-be Forms were wrong, how I long, for yesterday!


Taxes due, I filed come what may...

Losing all deductions that's my way...

Of giving IRS my pay.


4 replies   |    32 views   |    Add Reply

Stash026 created a topic in 401(k) Plans

Different Eligibility Requirements for 401(k) Contributions

"I'm taking over a plan and working on the Cycle 3 restatement. There are two different sets of eligibility requirements for 401(k) contributions:

Senior Managers - 21 and 6 months of service

All Other Employees - 21 and 1 year of service

This seems discriminatory because it's benefitting the managers (upper level) and allowing them to participate sooner. What do you think?"

3 replies   |    29 views   |    Add Reply

Belgarath created a topic in Retirement Plans in General

Default Beneficiary Designations Are Changed (?) in an Appendix

"Reviewing a plan for takeover. The base document provides for a default beneficiary of: 1. Surviving Spouse; 2. Participant's issue, per stirpes; 3. Participant's surviving parents, in equal shares; or 4. Participant's estate. Fairly standard stuff.

Now, in the Appendix, this default is modified to be: 'the Participant's spouse, children, or parents, then estate.'

My question to you legal dudesses and dudes is, other than no per stirpes for the children, what, if any, is the real legal effect of this? How would a Plan Administrator determine, for example, anything other than a 50/50 split for the parents? Etc.? Is there a good reason you can see for this modification of the default? Seems to me it can only cause confusion."

0 replies   |    22 views   |    Add Reply

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