Message Boards Digest

September 23, 2022

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

david rigby created a topic in Defined Benefit Plans, Including Cash Balance

Plan Sponsor in Receivership But Not Yet Taken Over by PBGC -- Any Need to Suspend Optional Lump Sums?

"DB plan sponsor is an insurance company, currently in receivership under its state insurance department. This status has not altered the plan's requirement to do annual valuations, file Form 5500, etc.; the actuary prior to receivership is still in place. The prospects for rehabilitation (and/or coming out of receivership) are virtually nil. While there is no formal statement yet from the state DOI, it appears likely the DOI will seek to have the PBGC take over the plan. (The plan actuary has not been part of discussion, if any, between the DOI and the PBGC.) Most recent AFTAP is around 100%, but a termination ratio is estimated around 70-75%. The plan has been frozen for several years. The plan has an unlimited LS option.

The current question is, whether any PBGC regs and/or practices would require the plan to suspend (i.e., before any formal action by the PBGC) the use of the LS option for anyone currently reaching a benefit commencement date (retirement or otherwise)? My review found nothing on point; checked all the Blue Books, did not see anything in the regs (although that might be easy to miss). Any relevant experience? Ideas/suggestions?"

1 reply so far   |    Click Here to Add a Reply

Jakyasar created a topic in Retirement Plans in General

When Does New Partial Owner (Mid-Year Acquisition of Plan Sponsor Stock) Become a Key Employee?

"PS plan, top heavy for 2021. Both key and non-key receive top heavy minimum. Plan also has 5% gateway requirement for non-HCEs. Beginning of 2021, Joe owned 100% of the company. On July 1, 2021, Joe sold 20% to an employee, Mary. As of 12/31/2021, ownership is 80/20. When did Mary become a key employee? What contribution does Mary need to get for 2021?"

1 reply so far   |    Click Here to Add a Reply

TPApril created a topic in 401(k) Plans

New Safe Harbor Plan Deadline is October 1 -- But Must Notice Have Been Given to Employees by September 1?

"I understand a new safe harbor 401(k) plan can be signed prior to October 1 and effective October 1. However, does the notice for the new plan need to have been delivered to eligible employees by September 1 (i.e., 30 days previously)?"

4 replies so far   |    Click Here to Add a Reply

TPApril created a topic in Form 5500

Switching from Cash Basis to Accrual Basis in Order to Defer 5500 Reporting of First Year's Contribution

"Is it a big deal to switch between cash and accrued basis? New 1-person plan deposited $500 as a starter contribution after the end of the plan year. As part of a controlled group, she would normally file a 5500. We'd like to wait until the current plan year contribution is filed before starting to file, and then file as accrued, so the 2nd plan year contribution would show the contribution for both the first and second plan years."

No replies yet   |    Click Here to Add a Reply

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