Message Boards Digest

October 6, 2021

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

RayJJohnsonJr created a topic in Form 5500

What to do about 2020 5500's when Co. B bought Co. A midyear and kept the same 401k Plan

"Co. B bought Co. A in an Asset Purchase. I checked and it is permissible for Co. B to assume the existing 401k of Co. A. Effective 6/1/20, the Plan Sponsor was changed from Co. A to Co. B. Many employees who worked for Co. A immediately became Co. B employees. I'm thinking: Co. A. files a 5500 for the period 1/1/20 until the sale date which simultaneously made A's employees B's employees. That 5500 would end with $0 assets. And it would be marked "final." Co. B would file a 5500 for the period beginning on the purchase date thru 12/31/2020. Am I on the right track? Or the wrong track? Thanks"
4 replies so far   |    Click Here to Add a Reply

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BG5150 created a topic in Form 5500

Hurricane Ida Relief?

"Is there Hurricane Ida relief for 5500s? Company involved is based in NJ."

2 replies so far   |    Click Here to Add a Reply

TPApril created a topic in 401(k) Plans

multiple entities/ownership - Single or Multiple ER Plan?

"Basic structure - One corporation with limited staff owns two entities, each with their own EIN. Neither entity has ownership in the other. The two entities want to set up a common PS plan, but they want one of the two entities to sponsor rather than the common owner. Trying to figure out if this is a Single Employer or Multiple Employer plan?"
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imchipbrown created a topic in 401(k) Plans

A nickel reappears.

"401(k) Plan is terminated. All plan assets are paid out, a final 5500-S/F is filed and the company is sold. One individual's brokerage account was paid out in a check for $10,000 in March, then a check for 5¢ in April. The $10,000 is deposited; the 5¢ check goes stale and returns to the account. Participant can't be bothered to deal with the 5¢ check. What to do....?"
2 replies so far   |    Click Here to Add a Reply

Crjcpm created a topic in Employee Stock Ownership Plans (ESOPs)

CO Lawyer Recommendations

"After 2.5 years with the DO EBSA, their Solicitor’s Office couldn’t get ESOP Plan administrator to buy back my husband’s stock so he could get his final payoff. We need a CO lawyer to handle this as the DOL said there is no question of the money being owed. Can anyone help?"
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Madison71 created a topic in 401(k) Plans

Hardship Question

"Good Morning - 40 year old participant requested a hardship withdrawal from his 401(k) account to purchase a principal residence. The purchase of a principal residence is listed as one of the safe harbors for hardships in the plan document and there are no maximums or restrictions listed. Participant submitted the purchase agreement and is requesting the entire purchase price of $500,000 as a hardship withdrawal. Participant certified they do not have other assets to satisfy the financial need and the employer does not have any information to the contrary. Any issue outside of the financial hit to the participant as a taxable distribution subject to a 10% early withdrawal penalty? It certainly goes against the spirit of a hardship, but the purchase of a principal residence (without limitation) is deemed an immediate and heavy financial need. I appreciate your thoughts."
4 replies so far   |    Click Here to Add a Reply

Bird created a topic in Retirement Plans in General

Termination of services fee from plan assets

"Anybody see this from Paychex? A Plan Transfer Fee of $1,500 will be applied to any client who transfers its plan recordkeeping to a new service provider and who is not currently/does not continue to process payroll with Paychex. Select the Plan Transfer Fee payment method from the options below. Note: If you do not select an option, Paychex will collect the fee from the Plan's assets. I'd think that ceasing payroll services and tying that to taking fees from plan assets is problematic."
2 replies so far   |    Click Here to Add a Reply

bzorc created a topic in 401(k) Plans

Eligibility Question

"Plan sponsor has two groups of employees: "Exempt" and "Non-exempt"; both groups are eligible for the company 401(k) Plan However, they wish to have two separate eligibility requirements for the plan: The "Exempt" group must complete 30 days of service, and they enter the plan on the 1st of the month following. The "Non-exempt" group must complete 60 days of service, and they enter the plan on the 1st of the month following. Questions: One, the prototype we utilize does not allow for a 30 (or 60) day requirement; it appears that it must be in months. Am I missing something?; and Two, I don't believe you can have a dual eligibility requirement for the 401(k) feature of the plan. Thanks for any replies."
1 reply so far   |    Click Here to Add a Reply

Archimage created a topic in Operating a TPA or Consulting Firm

Projection Software

"Anyone have a good recommendation out there for contribution projections for prospects? The only one I can think of is Relius Proposal but it has been discontinued. Any other good ones out there?"
2 replies so far   |    Click Here to Add a Reply

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