Message Boards Digest

April 7, 2022

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

BG5150 created a topic in 401(k) Plans

Missed 2021 Match for One Person -- Include Earnings When Making Late Deposit?

"Employer deposits match and a 'profit sharing' each pay period for everyone (who is supposed to get each). They missed one guy for a couple payrolls in 2021. (Deferrals went in fine.) They deposited the missed contributions the other day. Given that the contributions need to be deposited by the time they file their taxes, do I need to bother with earnings? (Let's assume the taxes weren't filed yet.)"

3 replies so far   |    Click Here to Add a Reply

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Egold created a topic in Retirement Plans in General

Massachusetts Schools Pension Plan for Non-Teacher Employees

"In Massachusetts, the pension plan allows participants to retire after 10 years and attaining age 55. If a participant takes a leave of absence due to medical reasons from April through August, can this participant be denied a pension if he decides not to go back to work? The participant completed 10 years of service and age 55 during this time period."

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

Rev. Proc. 2017-56 -- Valuation Date Change for Terminating DB Plan

"Calendar DB plan with EOY valuation. 1 Lifer. Date of plan termination is 4/1/2022. Need to run the final val.

Under automatic, is my new val date 1/1/2022 or 4/1/2022? I think either is fine but want to double check."

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BG5150 created a topic in Retirement Plans in General

Short Plan Year with Self Employed Participant -- Determination of 'Compensation'

"As I understand it, sole proprietors and partners are considered to have their income determined on the last day of the year. How does that work in a short plan year? I have two examples: [1] Plan year 10/1/21 to 12/31/21. Effective date 10/1/21. Does everyone use pretty much 1/4 of their comp, but the owner gets to use all of it (subject to the comp limit and 415 limits) because it was all 'earned' on 12/31? [2] Plan year 1/1/21 to 6/30. Everyone gets comp for first half of year, 415 and comp limit are pro-rated. But partners get zero comp, therefore zero benefit because they earn their comp 6 months later. Agree?"

1 reply so far   |    Click Here to Add a Reply

52626 created a topic in 401(k) Plans

Coverage Testing -- Controlled Group

"Company A has a standard 401(k) no allocation restrictions for match - passes coverage

Company A purchases Company B ( stock purchase) will be a controlled group.

Company B has a Safe Harbor 401(k) and passed coverage before the purchase.

Intent is to maintain two separate plans.

Company B may move to non Safe Harbor.

Since all employees of the controlled group are deemed employees of Company A, am I correct is saying coverage testing must be satisfied for each? However since one is safe harbor and one is not, cannot aggregate.

Company A HCE 56

Company B HCE 6

Company A NHCE 343

Company B NHCE 1043

Based on these numbers Company A will fail Coverage.

If after the transition period Company B is amended to a standard 401(k) with the same eligibility and match as Company A, is the coverage testing issue a moot point as long as each passes coverage separately/ This hurts my head!"

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DMcGovern created a topic in Retirement Plans in General

Client Has an Owner-Only Plan But Is Partial Owner in Other Companies

"Company M is an LLC taxed as partnership. Two owners, 50/50. Only one of the owners (Owner A) is actively working for Company M, the other owner works for a different company. Company M only has one employee (Owner A), all others are independent contractors receiving 1099's. It's a software development firm and the website shows 12 people as 'employees' (supposedly all but the owner are 1099 contractors).

Owner A also owns 91% of Company K. I'm told Company K has no employees.

Owner A also has a owner-only 401(k) plan with an investment firm and wants to open a cash balance plan with us.

Also found out that Owner A established residence in NY and very recently became a US citizen. He has since returned to France and wants to use his address in France for the plan document and 5500.

It's been difficult to get details on this, so my comfort level is low. Other questions I should be asking or information I should request? Any help is appreciated!"

3 replies so far   |    Click Here to Add a Reply

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