Message Boards Digest

November 19, 2021

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

Dobber created a topic in SEP, SARSEP and SIMPLE Plans

Sole Proprietor Wishes He Hadn't Set Up a SEP-IRA in Early 2021

"Solo Proprietor earlier this year funded a SEP-IRA for the 2021 tax year. Now, due to a surprise increase in earnings, he wants to fund a Solo 401(k). The idea is that he will be able to contribute the maximum ($58,000) which he won't be able to with the SEP.

I'm aware that an employer can't fund both a SEP and a Solo 401(k) in the same tax tax, assuming the SEP was established using IRS Form 5305-SEP. That being said, what options, if any does the owner have in reversing/canceling the SEP contributions? And instead fully funding the Solo(k) for 2021?"

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Santo Gold created a topic in Distributions and Loans, Other than QDROs

Participant Loan Available Only If 10 or More Years of Service?

"Could a 403(b) loan program be established in a way that a loan can be taken for any reason, but only for individuals with 'X' years of service (e.g., 10 years of service)? The plan in question does not have any HCEs so there would not be a discrimination issue, but in general is it permitted to structure a loan program in this manner?"

3 replies so far   |    Click Here to Add a Reply

Ananda created a topic in Plan Terminations

Use of a Qualified Replacement Plan -- Must Be Named Specifically?

"A terminating DB Plan has excess assets and wants to transfer to a 401(k) Qualified Replacement Plan ('QRP'). The 401(k) plan has standard QRP language stating it will accept such transfers and the terminating DB plan has a termination amendment stating excess assets will be transferred to a QRP.

Does the language have to specifically name the QRP and is there an amendment reflecting or documenting the actual transfer?

For a different terminating plan, the excess assets have been transferred to a 401(k) QRP but the excess assets are not being distributed rapidly enough for some participants. The plan sponsor has two other profit sharing plans. Can he treat all 3 plans as QRP's and transfer excess assets from the original 401(k) QRP to the other 2 profit sharing plans and thus accelerate distributions?"

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DHarris41 created a topic in 401(k) Plans

Repay My 401(k) Loan Using a Rollover from My Wife's 401(k)?

"I currently have a 401k loan for $3k. My wife has a Roth 401k with a former employer worth $3k. Is it possible to roll my wife's 401k into my plan to pay off the loan?"

1 reply so far   |    Click Here to Add a Reply

gholtz created a topic in 401(k) Plans

Seeking Guidance on 411(d)(6)(E) and 1.411(d)-4, A-2(e)

"Hello, new to the site and the retirement industry in general. Could anyone please help me understand in what circumstances it is permissible to amend to remove an optional benefit?

We have a client who purchased two companies via stock purchase and need to merge both subsidiary plans into theirs (messy, I know). There are partial and installment withdrawals in one of the subsidiaries, but we would like the surviving plan to have lump-sum only (with partial and installment only available for RMDs as is standard). The Code seems clear, but I'm just not understanding the regulations on this matter."

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Basically created a topic in Plan Document Amendments

History of the IRS 6 Year Restatement Cycle?

"Can anyone point me to a link that will outline the history of the IRS' 6 year restatement history? is there such a definitive list? When it started? Required and optional interim amendments, a chronological history?"

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

One Life DB Takeover with No AFTAPs

"I'm looking into taking over a set of one-life, owner-only DB plans. AFTAPs were never done because these were one lifers. AFTAPs are never exempt unless frozen prior to 9/5/2005, if I recall correctly. Some of them have been around for many years. I believe 101j notices are not required but benefit accruals should have been frozen in time. The plan document provided had no 436 options elected, which is odd. I'm checking with the vendor (same as mine) on what can be done here or even it was possible to complete the document without any of these provisions. If anyone has any experience with this situation, could you share on the fix?"

5 replies so far   |    Click Here to Add a Reply

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