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Message Boards Digest

April 22, 2022

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

K-t-F created a topic in Distributions and Loans, Other than QDROs

Plan Sponsor Is Acquired; Rollovers Allowed Into New Employer's Plan; OK to Treat Non-Rolled-Over Loan as Taxable Distribution?

"This client sold his business, it was absorbed by a larger company. Almost all of the employees went to work for the new owner. Many employees are rolling their pension accounts into the new employer's plan, some into IRAs. One employee has a loan and would like to 'cancel it out' and only roll over her tangible assets to the new employer's plan. Any reason she can't do this (split her distribution into 2 parts, roll over into new plan and get a cash distribution of her loan as a taxable distribution)?"

2 replies so far   |    Click Here to Add a Reply

Bifurcated mess created a topic in Qualified Domestic Relations Orders (QDROs)

Alternate Payee Died Before Divorce Settlement

"Marriage was bifurcated (due to age and health of both parties both in their 80s and respondent has Alzheimer's). Court hearing set to address community property but continually postponed by petitioners and respondent's lawyers. 18 months pass; the petitioner's attorney never files a DRO. Petitioner's health declines and has a guardian ad litem. Petitioner subsequently dies but the retirement benefits has not been addressed by the courts. 2 -1/2 years later a court date is set to address retirement benefits. Petitioner's estate is now filing a DRO. Will petitioner's alternate payee status flow to her estate in a defined benefit plan? Will there be any ramifications if petitioner's counsel didn't file the DRO while his client was alive?"

4 replies so far   |    Click Here to Add a Reply

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

DB Plan -- Participant Paid Out Based on Incorrect Salary; PBGC Coverage Exemption Affected?

"Here is a new one for me. PBGC-covered DB plan, owner plus 1 rank-and-file employee. Client pushed to have the only non-owner participant paid out in 2021 after the employee's termination. Client provided the final salary paid for 2021 based on the final payroll (even had them confirm). The final salary was lower than prior years and did not affect the average compensation. Provided the lump sum amount, and they paid out. So, the plan was covering just the owner for the rest of 2021. Went to PBGC and got an exemption from further coverage effective for the 2021 year. All good. Well, just got the actual 2021 W-2s. The employee's actual salary is much higher than the number I was provided, so it affects the 3-year average compensation; i.e., the employee was underpaid his a lump sum by $100 to $200. No 415 issues whatsoever so no MASDs etc. The question is, what happens with the PBGC exemption? Technically the plan still had a rank-and-file participant as of 12/31/2021 who with a $1.50 monthly accrued benefit and a very small lump sum due. Another question: can they pay out this participant based on the prior distribution election form (i.e., an IRA rollover)?"

1 reply so far   |    Click Here to Add a Reply

AlbanyConsultant created a topic in Retirement Plans in General

RMDs to Non-Spouse Beneficiaries -- Is There a Time Limit?

"Al, the owner of the company which sponsors the PS-only plan, was taking RMDs and then passed away in 2017. His two sons, who were his 50/50 beneficiaries and who were participants and now became the 50/50 company owners, chose to not take Dad's money out of the plan. An RMD is being calculated on Al's balance each year and paid to each of the sons (split evenly between the two of them). The plan does have the 5-year-rule selected (though I thought it's only applicable if the participant dies before RBD). Is there any limit as to how long the sons can keep this going inside the plan? Is there something that will require them to take Al's money out at some point? The sons are just over 60 themselves, so they have a few years before they hit RMD status on their own accounts."

1 reply so far   |    Click Here to Add a Reply

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View job as Cash Balance Plan Actuarial Associate

Cash Balance Plan Actuarial Associate  View details

Cash Balance Actuaries, LLC
Remote

View job as Compliance Consultant

Compliance Consultant  View details

Alliant Insurance Services, Inc.
Remote

View job as Retirement Plan Recordkeeper - 401k

Retirement Plan Recordkeeper - 401k  View details

The Trust Company of Tennessee
Remote / Knoxville TN

View job as Manager Compensation - North America

Manager Compensation - North America  View details

Air Products and Chemicals, Inc
Remote / Allentown PA / Houston TX

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