Message Boards Digest

May 24, 2021

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

ErnieG created a topic in Correction of Plan Defects

Correction of Plan Back to 2014

"I came across a business owner who implemented an 'Individual' Profit Sharing 401(k) Plan back in 2011. Accordingly this do-it-yourself approach did not include an employee who was hired in 2014 and still employed. Does anyone have a recommendation for an ERISA attorney in the Fort Worth TX area who could prepare and file the VCP?"

2 replies so far   |    Click Here to Add a Reply

Rafael created a topic in Governmental Plans

Rehired 'Eligible Participant' Under OBRA '93

"I was wondering if anyone had heard of any guidance with respect to a participant who is an 'eligible participant' for purposes of the 401(a)(17) limits who was terminated and was then later rehired by the same employer.

Under Treas. Reg. 1.401(a)(17)-1(d)(4)(B), an 'eligible participant' for purposes of the grandfathered limits is 'an individual who first became a participant in the plan prior to the first day of the first plan year beginning after the earlier of-- [1] The last day of the plan year by which a plan amendment to reflect the amendments made by section 13212 of OBRA '93 is both adopted and effective; or [2] December 31, 1995.' (emphasis added).

Based on the use of the word 'first,' I would believe there is an argument that an individual who was an 'eligible participant,' terminated employment, and was later rehired and became a participant again would still qualify as an 'eligible participant' because that individual 'first' became a participant during the appropriate deadline. However, I'm hoping to see whether anyone on the Board had heard any different or had alternate thoughts. The Preambles to the reg are not helpful."

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JustMe created a topic in Governmental Plans

Tribal Governmental Plan Is Exempt from Form 5500 Requirement But Has Been Filing Them Anyway

"We recently took over a tribal government plan and the prior TPA has been filing a Form 5500 for the plan since its inception. This plan truly qualifies as a tribal governmental plan and so it's not subject to the Form 5500 requirements. Should we file for the 2020 plan year and mark that it's the Final Form 5500, or instead choose to not file and then, when the IRS sends a letter requesting the filing, respond that the plan is not subject to the Form 5500 filing requirement?"

1 reply so far   |    Click Here to Add a Reply

Renee H created a topic in Form 5500

Form 8955-SSA Not Filed; RMD Not Taken

"I have a take-over 401k plan and discovered Form 8955-SSA was not filed for one participant who terminated in 2013. She turned 70-1/2 in 2019 and has not taken any RMDs. All accounts are earmarked and this participant has had full disclosure and control regarding the investment of her benefits.

Should I file the 8955-SSA for 2020? The recordkeeper missed the RMD deadline. I would appreciate advice on how to fix these issues."

2 replies so far   |    Click Here to Add a Reply

Jakyasar created a topic in Distributions and Loans, Other than QDROs

DB Plan Distribution -- Request Date vs. Actual Date of Transfer

"Hi, it's late on a Friday night, I thought was going to relax and therefore, have shut down the brain activity. However, I've just received an email from a client with not-so-great news as distributions were not completed by the dates as I provided. When it comes to determining DB plan distributions, I am a stickler as to due dates for the distributions to be physically completed. I use monthly adjustments. For example, if a participant was born on the 15th of the month, the distribution has to happen physically on the 14th otherwise I recalculate the amount for the next month cycle. The software I use also agrees with me.

I'm working on a PBGC termination and this is the first time I've needed to deal with request date vs. actual transfer date issue for distribution. I instructed the DB distribution had to be finalized by the 14th of the month. The client provided a letter to the investment house, requesting this transfer to be completed on the 14th, on the 14th. However the physical transfer of assets occurred on the 17th due to investment house procedures/settling of transfers. I have actual letters provided with the 14th date.

To make matters more complicated, the per-share value of a stock held in the account was lower on the 14th than the amount on the 17th, which creates excess of 415 limit (participant is over age 70 and at 415 limit) at the time of physical transfer. Because I need to provide detailed documents to PBGC showing the amounts distributed and possibly how they were calculated, which date of payment is the acceptable/correct one? If it's relevant, they transferred the assets to the existing 401k plan."

2 replies so far   |    Click Here to Add a Reply

Kevin C created a topic in ERPA (Enrolled Retirement Plan Agent)

Received an E-Mail from IRS Saying You're Late on ERPA Renewal?

"If you receive an e-mail from the IRS saying your renewal is late and asking for documentation of your CE credits, the IRS probably lost one of your prior renewal applications. I filed my renewal timely on 5/6/21 and received the e-mail on 5/17/21. It said my renewal was late (but didn't say which one) and requested documentation for my 2018-2020 CE credits showing the IRS program numbers. The expanded listing from your PTIN account works, but not all of my credits are listed there. A co-worker received a similar e-mail the same day from a different person at the IRS saying her 2018 renewal was late. She sent a copy of the receipt of her 2018 renewal and that took care of the problem. The IRS person told her half of the ERPA renewals didn't go through. I sent a copy of my 2018 receipt and received a response that their records indicated I didn't renew in 2015 (I did), but they have my CE credits now and I'm good through 9/30/2024.

So, if you get one of these e-mails, find your receipt from the prior renewal and send that first. You may not have to send documentation of your CE credits. In my case that would have been interesting because ASPPA and NTSA didn't report my CE credits to my PTIN account and they don't send certificates with the IRS program number. I contacted ASPPA and they are working on getting documentation for me."

2 replies so far   |    Click Here to Add a Reply

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