Message Boards Digest

January 28, 2022

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

EBECatty created a topic in 457 Plans

Governmental 457(b) Plans -- Why Use Custodial Accounts vs. a Trust?

"I've never had reason to look closely, and the enactment of the 457(b) trust requirement predates my time in practice, but is there a particular reason why many governmental 457(b) plans seem to use custodial accounts (that meet the trust requirements under 457(g)(3) and 401(f)) instead of trusts?"

4 replies so far   |    Click Here to Add a Reply

thepensionmaven created a topic in Retirement Plans in General

Abandoned Plan -- Sorta

"Accountant asking for advice, told him to consult an attorney. Apparently an old client sponsored a profit sharing plan, back in the 70's. Original plan doc, nothing since then, no 5500s, owners died about 5 years ago, no successor trustee, spouse of one owner still around. All employees paid out in the past. Funds with bank, they want to pay the account and get rid of it. Less than $100k, to one of the owners, so he says, wife is beneficiary, not a trustee. The bank looking for corp resolution naming the trustee so they can pay out the account. Not getting involved, just asking if anyone has ever had such a situation. I don't even know what an attorney would advise."

2 replies so far   |    Click Here to Add a Reply

metsfan026 created a topic in 401(k) Plans

Wife's Solely-Owned Law Firm Provides Services to Husband's Solely-Owned Corporation

"I didn't think this was an issue, but the client was told something by a friend so I wanted to be clear:

Company 1 - Owned 100% by husband (wife not on the books).

Company 2 - Owned 100% by wife (sole employee).

She was told that, because they have minor children, this is a controlled group and needs to be tested together. I don't think so.

The only complication is that Company 2 is a law firm that performs services for Company 1. I'm not sure that it's the only work they do. While this could create issues, it doesn't seem to me to be a controlled group issue. Agree?"

9 replies so far   |    Click Here to Add a Reply

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

Website That Enables a Search of Individual Designed Plans?

"Is there a website that enables a search of individual designed plans -- to check how they designed, for example. Or has a database that stores all the individually designed plan documents."

7 replies so far   |    Click Here to Add a Reply

Dobber created a topic in 401(k) Plans

Effect of Dividend Distributions on Eligibility for Net Unrealized Appreciation (NUA) Treatment

"401k participant has appreciated company stock. Separated from service in 2021. In 2021, he took a distribution of dividends the from employer stock.  It's not clear whether he took the distributions while employed or after separation from service. One of the many NUA requirements is to make lump sump distribution in a single year. Does him taking a distribution of dividends nullify NUA? If so, would he be required to wait until the next 'triggering event' to NUA qualify?"

2 replies so far   |    Click Here to Add a Reply

Leopurrd-401k created a topic in Retirement Plans in General

Lifetime Income Disclosures -- Calculation Details?

"Can anyone point me in the direction of where the Lifetime Income Disclosure calculations are explained in detail. I have found the DOL calculator but I'm not great at finance and need to see all of the steps."

4 replies so far   |    Click Here to Add a Reply

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

Can Funds in a Qualified Replacement Plan (a PS Plan) Be Rolled Into a New DB Plan?

"Fiscal DB Plan-- 7/31 year end. Overfunded $500k. A husband and wife plan only. They got paid out max 415 limits (compensation, not dollar)

Plan terminated 7/31/2020. Benefits rolled into respective IRAs March 2021. The excess was transferred to a QRP (a profit sharing plan) by 7/31/2021 with a small remaining residue in October of 2021.

The DB account is still open with $0 balance.

The idea was to eat up the excess within 7 years as much as possible. They now have opportunity for large salaries for 2021/2022 and want to see whether a new DB plan can be set up and the excess can be transferred back into the new DB for satisfying the contributions. Can this be done?"

3 replies so far   |    Click Here to Add a Reply

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