Message Boards Digest

September 28, 2022

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

BG5150 created a topic in Retirement Plans in General

Top Paid Group Question -- Applies to Health Savings Accounts, Too?

"As I understand it, if an employer choses to utilize the Top Paid Group (TPG) for its benefit plans, it must be used on all benefit plans, retirement and non-retirement plans. So, this would include 401(k) and an HSA, right? If an employer wants to use TPG for HSA, they have to use it for the 401(k) right? But what happens if you have conflicting choices? The HSA says TPG and the 401(k) plan says standard?"

4 replies so far   |    Click Here to Add a Reply

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kmhaab created a topic in 401(k) Plans

Form 5500 Required if New Plan Has No Participants and No Assets Yet?

"If a 401(k) plan has no participants and no assets, is a Form 5500 required? The plan provides for employee deferrals only (no employer matching or other employer contributions) and no employees have enrolled in the plan to date. The plan has never held any assets. Is a Form 5500 required? TIA!"

3 replies so far   |    Click Here to Add a Reply

Peter Gulia created a topic in IRAs and Roth IRAs

Is an IRA's Sale to a Not-Yet Spouse a Prohibited Transaction?

"Is an IRA's sale to a not-yet spouse a prohibited transaction? Imagine this not-so-hypothetical situation: Two people who have contemplated marriage decide to wait. Why? One's IRA owns real property, which the couple intend as their new residence. The IRA holder believes that living in the property while the IRA owns it would result in an improper personal benefit and prohibited transaction. Instead, the IRA sells the property to the holder's not-yet spouse. (Assume the IRA's sale is for an amount an appraiser says is fair market value.) The couple delay their marriage, and the IRA holder's move, until the year after the year in which the IRA sold the property.

BenefitsLink neighbors, have you seen any court decision or agency proceeding that analyzes a situation anything like this as a too-clever evasion or somehow a prohibited transaction? What tax-law doctrines might the IRS (or a taxpayer) use to reason that the IRA's sale to a not-yet spouse ought to be treated as if it were a sale to the IRA holder's spouse?"

3 replies so far   |    Click Here to Add a Reply

Dennis G. created a topic in Cafeteria Plans

FSA Medical Expense Reimbursement Before Entry Date

"A 125 Plan allows entry date first day of month after meeting eligibility requirements. The 125 Plan is a calendar year plan. If the entry date of the participant is November 1, can the participant submit for reimbursement a medical expense incurred in March of the same calendar year?"

1 reply so far   |    Click Here to Add a Reply

TPApril created a topic in 401(k) Plans

Retroactive Participation in a New Profit Sharing Plan for Persons Employed on a Specified Mid-Year Date

"New plan. Effective date 1/1 for PS of current year (10/1 for 401(k) and safe harbor). Owner wants to allow all employees employed as of 7/1 to be immediately eligible as of 1/1. Does it make sense then that anyone hired between 1/1 and 7/1 is immediately eligible, on their date of hire (instead of 1/1)?"

3 replies so far   |    Click Here to Add a Reply

Belgarath created a topic in 403(b) Plans, Accounts or Annuities

'Ad Hoc' Distributions - Protected Benefit?

"ERISA 403(b) plan allows 'ad hoc' distributions -- i.e., partial withdrawals for terminated participants. Is it allowable to eliminate this option for current accrued benefits? (Plan provides for lump sum distribution.) Note that this is not an 'in service' distribution question."

No replies yet   |    Click Here to Add a Reply

Tom created a topic in Other Kinds of Welfare Benefit Plans

Separate Form 5500s for Employers Participating in a 'Community' Welfare Benefit Plan

"We have a client who provides health through a community plan. Employers pay into it, there is insurance and a trust with assets. Each participating employer has had to file their own 5500 under their EIN. The health plan has provided information for Schedules A and I in the past.

I requested the information for 2021 and was told by our client that the health plan is filing the 5500 on behalf of the plan and that participating employers no longer need to file a 5500. I have to think our client will need to file a 5500 marked 'Final' as the IRS/DOL will be looking for one since there was a 2020 filing and since we filed an extension 2021.

I am attempting to clarify this with the health plan people but still waiting for a response. If they don't provide any direction, we will prepare a 5500 for our client to sign and file.

The 5500 program doesn't like a welfare benefit plan with no Schedule A or I but I suppose I can ignore that validation warning. Better to get one filed and possibly amend later if needed. We only file a handful of welfare benefit plans and have never had to file a final."

No replies yet   |    Click Here to Add a Reply

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