Message Boards Digest

March 3, 2022

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

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

'Reasonable Method' for Purposes of 110% Test

"Doing a 110% liability test for a CB plan. As far as I know, one can use any reasonable method as long as it is approved by the sponsor and stay with the decision forever. The methods I am aware of are: 415 lump sum assumptions, 417e assumptions or 430 assumptions. Assume AFTAP is not an issue.

Usually 430 assumptions would yield lowest amounts but in my case nothing is working so I'm looking for another way to lower the liabilities and see whether they can pay the HCE who is now terminated and under disability. I would like to get this done before an accrual for 2022 happens which will make things even worse.

Any other methodologies that I am not thinking of? I know the bond/annuity etc options but am trying to avoid."

4 replies so far   |    Click Here to Add a Reply

kpension created a topic in 401(k) Plans

Finding a Reasonably Priced Option for Transition from Solo 401(k) to a Plan Covering Employees

"A small corporation wholly owned by a husband and wife has a solo 401(k) plan that they established in 2020 and includes a 1-year eligibility provision. The plan uses a prototype document from a major financial company designed for individual owners and SE companies.

The corporation is about to hire their first employee and knows that the plan needs to change, which would require a new restated document and additional help with plan administration. The financial company, which is also the trustee, states that they only provide these services to clients with 20+ participants as their minimum annual fees starts at $20,000.

The corporation's payroll service, which uses a bundled approach to administer or provide recordkeeping for the smaller companies quoted annual fees less than $2,000. However, it claims they cannot convert the prior plan to a traditional or safe-harbor (SH) 401(k) plan because the current financial institution uses unbundled services. The payroll service which uses Guidelines states that they could not setup a new traditional or SH-401(k) plan until the current solo 401(k) has be terminated for 12 months.

My goal is to find a service provider that will convert or restate this plan and provide annual recordkeeping/administrative services for a 3-participant plan for a reasonable fee. Any takers?"

10 replies so far   |    Click Here to Add a Reply

metsfan026 created a topic in 401(k) Plans

Husband and Wife Each Has a Company; Affiliated Service Group Here?

"Company A - Husband owns.

Company B - Wife owns; currently all work is done for Company A.

The next step for Company B is to expand, providing legal services for additional clients.

What's the fallout for setting up separate plans for Company A and Company B? Can they do it, or do we have an affiliated service group issue?"

1 reply so far   |    Click Here to Add a Reply

Magill created a topic in Retirement Plans in General

Self-Employed Integrated Plan -- How to Calculate the Contribution?

"Does anyone have the formula for a self-employed integrated contribution calculation? My formula isn't working correctly with the check. I'm not sure whether it's the way I am checking it that is the issue."

No replies yet   |    Click Here to Add a Reply

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