Message Boards Digest

July 14, 2021

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

Jakyasar created a topic in 401(k) Plans

Completing My First Form 5330 for Lost Earnings on Late 401(k) Deferral Deposit

"Hi My first one ever. Need input from 401k gurus out there.

Scenario 1: One deposit made 3 months late. Did the VCFP calculations. They made the deposit for lost earnings today. Correction under 4975(a). Preparing 5330. Completing Sch C Item 1 is discrete, correct?

Completed item 2-a-1-i - date of transaction is when they deposited the missing deferrals, correct?

Item 3 is fine

Item 4, checked yes

Do I need to complete item 5? It is the filer/sponsor listed on page 1, items A & D?

Scenario 2: This time I have 20 late deposits, 4 participants, 5 different deposit dates. They will write one check, i.e., all corrective amounts will be done in one day.

I think put in 5 "transaction dates" and put in the appropriate lost earnings for each transaction date, correct? Again, do I need to complete item 5? If yes, do I need to put in 5 times?

Did I miss anything else or not asking correctly?"

10 replies so far   |    Click Here to Add a Reply

Advanced Pension Conference – Aug. 31 - Sept. 2, 2021

Sponsored by FIS
FIS Fall educational events are opened for registrations. Earn up to 13 CE credits at the virtual Advanced Pension Conference on Aug 31-Sept 2, 2021. Fundamentals of Qualified Plans, a 5-part live webcast, offers up to 25 CE credits. Register here.

RCK13 created a topic in 403(b) Plans, Accounts or Annuities

403(b)(9) Church Plan: Some Questions on Plan Administration

"We have our first 403(b)(9) church plan with discretionary profit sharing that is allocated at a rate of 12% of comp per year. Is there any type of testing required?

I know that, because it's a 403(b), there's no ADP test and that Section 403(b)'s maintained by churches are not subject to the coverage and nondiscrimination testing rules and that it also isn't subject to the universal availability rule. But I'm uncomfortable saying that NO TESTING needs to be done and I'm wondering if we should be testing comp limits, employer contributions, and for minimum contributions or if we have to test the profit sharing contribution at all.

A few other questions I'm getting stuck on: Do forfeitures need to be separately accounted for by person? Can church plans utilize auto-rollovers or cash out provisions?"

1 reply so far   |    Click Here to Add a Reply

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

No Need for Documentation of Reasons for a Hardship Distribution?

"Client has a participant who is requesting a hardship in a plan that's with one of the large national 401k vendors. Client called the vendor. (We're the TPA.) Backup documentation comes up during the conversation. Vendor tells the client that 'unless the TPA needs the backup documentation then it isn't necessary anymore to get such documentation on hardships from the participant.' Is that correct?"

1 reply so far   |    Click Here to Add a Reply

TMcfall created a topic in 401(k) Plans

Two Entities, Same Owners, Different Plan Designs

"Company A and Company B are owned 100% by the same person. Company A offers a 401k safe harbor plan. Company B offers a 401k plan with no matching contributions. Because the same person owns 100% of both companies, would the two plans need to be identical in plan design? Additionally, if both plans have the same design, is there any need to combine the plans as a controlled group with a participating employer?"

4 replies so far   |    Click Here to Add a Reply

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Pension Benefit Guaranty Corporation [PBGC]
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