Message Boards Digest

August 18, 2021

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

Leslie Kalec created a topic in 401(k) Plans

Forfeiture of Vested Funds Due to Embezzlement?

"I have a client whose employee was fired and convicted of embezzling company funds. There is an outstanding restitution amount. Employee has a 100% vested benefit in the plan. It's a Safe Harbor Plan, so employer contributions (match) are 100% vested. Anyone know of a way to forfeit some or all of those matching contributions? I'm almost 100% sure there is none."

2 replies so far   |    Click Here to Add a Reply

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Brenda Wren created a topic in Health Savings Accounts (HSAs)

Retiring at 62 -- Can I Use HSA for Health Insurance Premiums?

"If I understand the current rules correctly, if I retire at age 62, I can use my HSA funds to pay COBRA health insurance premiums, but after that (18 months) I cannot without paying taxes on the withdrawal. Seems like a rule that wasn't very well thought out. Is this correct? Anyone else think this is unfair?"

2 replies so far   |    Click Here to Add a Reply

Jakyasar created a topic in Retirement Plans in General

Set Up a DB Plan for 2020 But Deduct Contribution in 2021?

"A hypothetical question. Company A wants a DB plan starting in 2020 but it has filed its tax return on time without any extension. It has lots of money and wants to generate a required contribution for 2020 and then deduct it for the 2021 tax year together with a 2021 deduction for any other contribution during 2021. Assume there is enough room for both under 404(o). What do you think?"

4 replies so far   |    Click Here to Add a Reply

Jakyasar created a topic in Retirement Plans in General

Regs or Code Sections That Support Revenue Ruling 76-28?

"Rev. Rul. 76-28 states that contributions can be made after the close of a taxable year-end and still be deductible for the prior year, whether the plan sponsor is filing on a cash basis or an accrual basis, which also references Code section 404(a)(6). I'm doing a little research to see whether any other regs/sections support Rev. Rul. 76-28 and I can't find any. Do you know of any?"

1 reply so far   |    Click Here to Add a Reply

Jakyasar created a topic in Retirement Plans in General

Short Plan/Company Year -- Newly Established DB/DC Combo -- But Low Salaries

"Looking into a plan possibility for new qualified retirement plans. Company A was started on 4/1/2020 (with a 12/31/2020 year end) and wants to set up a DB/PS plan for 2020. Non-PBGC. Two owners, each with $90k salary. So total 2020 compensation was $180k. Do you agree that there is no 415 pro rata requirement here for the salaries or the contribution deduction? I've never dealt with this possible 415 situation because clients' salaries have always been was at the maximum allowed, never at a low level such as $90k. For example, I can generate a DB deduction of $100k (based on $9k salaries each) and $10,800 of deductible profit sharing contributions (6% of $180k) for 2020 if I use their full salaries. Look OK to you?"

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VeryOldMan created a topic in Defined Benefit Plans, Including Cash Balance

Lump Sum Annuity Factor for Fractional Age (Years and Months)

"For 415 lump sum limitation calculations, IRS says it will accept linear interpolation as a reasonable method. For example computing the maximum lump sum at age 62.45, we can use the factor for age 62 and age 63 and linear interpolation. I am looking for other acceptable methods that might provide a higher value. Can't find anything...."

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HCE created a topic in Defined Benefit Plans, Including Cash Balance

Any Actuarial Tables for Same-Sex Spouses?

"We need to calculate survivor benefits for a spouse, but we only have male/female, female/male mortality tables. Do male/male and female/female tables exist that we can use? Or is it okay to use the opposite-sex tables even for same-sex couples? If we do the later, are there any special considerations (i.e. do we need to notify the parties or obtain consent)?"

8 replies so far   |    Click Here to Add a Reply

metsfan026 created a topic in Retirement Plans in General

How to Appoint a Contingent Successor Trustee?

"I have a client that wants to setup a successor trustee, just in case. But I don't see a provision to do so in the plan document. Is there something else that I can have signed, outside of the terms of the plan document, that authorizes and names a contingent successor trustee?"

3 replies so far   |    Click Here to Add a Reply

ombskid created a topic in Retirement Plans in General

50% Owner of LLC Also Works for Self-Employed Wife

"50% owner of LLC also works for his wife as a W-2 (common law) employee. Contributes the maximum 401k and gets a 25% match. Can he get the DC max in the LLC's plan if his compensation from the LLC is high enough? He will not do any 401k contributions by the LLC."

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