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Message Boards Digest

March 2, 2022

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

K-t-F created a topic in 401(k) Plans

Deferral... Voluntary Contribution... Mess!

"Client bonused himself $28,000 to max out his deferral. He reported on his W-2 $28k in box 12 and coded it D. I told him he exceeded the 402g limit. He withheld taxes from the $28k and deposited $25,858 into the plan. He wants to say that the extra $2k is a voluntary contribution. He can do this (doesn't exceed 415 limit) but it needs to be in Box 14... correct? And technically he needs to actually deposit $28,000... correct? In the end he needs to amend the W-2 and make whole the $28k in the plan... correct?"

No replies yet   |    Click Here to Add a Reply

BG5150 created a topic in Retirement Plans in General

'Otherwise Excludable' When Years of Service Measured by Elapsed Time

"What happens when the plan's method of crediting hours of service is the elapsed time method? Is a Year of Service merely when someone works for 12 months straight (or credited due to spanning rules)? How does that translate to calculating 'Otherwise Excludable'?

I have a participant in a 403(b) plan who was hired 7/3/18 and worked 350, 650, 675, 720 hours in '18, '19, '20 and '21. Is the OEX rule purely 1,000 hours in a year, or can it be based on elapsed time and depends on the plan's definition? Can this person be OEX or no?"

1 reply so far   |    Click Here to Add a Reply

Pension RC created a topic in Defined Benefit Plans, Including Cash Balance

Highly Compensated Employee Characterization for Purposes of Form 6088

"Column b of the Form 6088 asks that you indicate whether each participant listed is an HCE. For this purpose, is a former HCE considered an HCE?"

1 reply so far   |    Click Here to Add a Reply

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

Distribution from Defined Benefit plan - rollover to Roth account in governmental 457(b) Plan?

"So I'm struggling with this - distribution from a Defined Benefit plan - participant wants to roll into a Roth account in a Governmental 457(b) Plan. I'm thinking it must be rolled into the 457(b) plan as non-Roth, then converted as an on-plan Roth rollover. But that seems stupid - can it just be rolled directly to the Roth account in the 457(b) (and of course reported as taxable)?"
4 replies so far   |    Click Here to Add a Reply

thepensionmaven created a topic in Form 5500

1099R issued to Plan Sponsor

"Participant terminated, entitled to payout, check was requested from the annuity carrier. Plan Sponsor receives the 1099-R showing Plan Sponsor as the recipient, with the gross amount the participant is entitled to, and an amount withheld. The broker must have established the annuity in the company name and not the name of the Plan. I would think the annuity carrier paid the IRS the withholding but under their EIN. Annuity carrier sends Plan Sponsor a net check, sponsor deposits into their corporate account and pays the participant, cross referencing the whole transaction. Now participant is calling client complaining she ever received a 1099R, and client comes to us to prepare. I believe that since withholding already paid, I would show the net distribution as the gross and the net amount taxable with $0 withheld?"
4 replies so far   |    Click Here to Add a Reply

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