Message Boards Digest

May 20, 2022

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

shERPA created a topic in Estate Planning Aspects of IRAs and Retirement Plans

Form 5495

"This isn't specific to IRAs, etc. but is an estate close-out issue. Filing form 5495 to request an estate trustee's discharge of any personal liability after 9 months, I need to list and attach the returns for which this is requested, in this case forms 1040 and 1041. The returns are filed, the 5495 asks for the IRS service center where they were filed. 1041 was mailed to Ogden, but the 1040 was filed electronically. So in the service center box, should I put "filed electronically", or list the service center where the paper return would have otherwise been mailed? IRS instructions are very brief and don't address this. Thanks."
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thepensionmaven created a topic in Plan Terminations

Asset Sale -Plan Termination

"Client selling the assets of his company, effective 6/5/2022; all employees will be terminated, employee contributions cease as of that date. Employer has yet to make the 3% safe harbor (always made after the end of the plan year), so the plan must stay open to receive those contributions. The buyer maintains a 401(k) to which all participants in seller plan will rollover, but the plan has a 60 day eligibility requirement, Can't the seller's plan remain open for those 60 days?? One participant has an outstanding loan, to which no further payments can be made after the participant terminates. The outstanding loan balance is a QPLO which can be rolled over, can't it just sit in the seller's plan until expiration of the 60 days? The solution would be for buyer and seller to agree to waive the 60 day eligibility for employees of the seller's plan, but that has yet to be decided."
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EBECatty created a topic in 401(k) Plans

Retroactive amendment to loosen eligibility

"A plan sponsor wants to make profit-sharing contributions for the 2021 plan year to employees who did not meet the plan's eligibility criteria in 2021. There is no testing failure if they remain excluded. Is it possible to amend the plan now to make the eligibility terms less restrictive? It seems like an -11(g) amendment would not work because it wouldn't be correcting a failure. Likewise, we're beyond the timeline for adopting a discretionary amendment. If they received allocations anyway, despite the plan terms, how would everyone view a retroactive corrective amendment under SCP to conform to the plan's actual operations (i.e., retroactively loosen the eligibility terms for the profit-sharing component only)? Only non-HCEs are in the potentially expanded group. The expansion would not cover the deferral components so there wouldn't be an issue with their inability to defer in 2021. Is there any other way to accomplish? Appreciate any insights."
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James created a topic in Defined Benefit Plans, Including Cash Balance

Increases after 70.5 for employee in payment?

"A participant was working while they attained age 70.5 back in 1998. They continued to work through 2008. Each year, through 2004, the benefit was increased to reflect additional accruals. After 2004, there were no increases. We're trying to figure out if the benefit should have been increased after 2004 through termination. I seem to recall a test or rules of some sort for people working past 70.5 and receiving their benefit, something like comparing the present value of the benefit as if it was always being made to the accumulated value of benefits already paid, and if the difference was greater than you increase, otherwise you don't. But, I can't seem to find this anywhere. Does anyone recall this? Thanks,"
1 reply so far   |    Click Here to Add a Reply

Peter Gulia created a topic in 401(k) Plans

What do you think about a requirement to use an automatic-contribution arrangement?

"If enacted as it passed the House of Representatives, the “SECURE 2.0” bill [H.R. 2954] would require a new § 401(k) or § 403(b) salary-reduction agreement to include an automatic-contribution arrangement. What do BenefitsLink neighbors think about this? Would you like the new requirement? Would you dislike it? And for either view, why would you like or dislike an automatic-contribution requirement?"
4 replies so far   |    Click Here to Add a Reply

Belgarath created a topic in Cafeteria Plans

Business being sold - what options for cafeteria plan?

"Does this follow the same rules as qualified plans, or is there a whole separate regulatory scheme?"
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Belgarath created a topic in Cafeteria Plans

Business being sold - what options for cafeteria plan?

"deleted post"
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