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Message Boards Digest

December 2, 2022

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

Lou81 created a topic in 401(k) Plans

Eligibiltiy After Rehire

"Plan has year of service 1000 hours and entry dates of 1/1 & 7/1 I have an employee hired 6/2017 and terminated 7/2017. Only worked 12 hours She has rehired 2/2022 - worked over 1000 hours in the 2022. Plan does not have rule of parity or one year hold and elig switches to plan year. Does she enter the plan 1/1/2023? Thanks!"

6 replies so far   |    Click Here to Add a Reply

Pam Shoup created a topic in 401(k) Plans

Plan Wide Fund Change Fees?

"As an open-architecture recordkeeper, we routinely prepare combined Sarbanes-Oxley/404a-5 notices and manage the fund change process for the advisors when plan wide fund changes are requested. We have not traditionally charged a fee to do this. Lately, advisors have been asking us how much we charge. Is this something you guys are seeing as a line item fee and if possible, can you share a range of how much a fee are you seeing?"
No replies yet   |    Click Here to Add a Reply

AlbanyConsultant created a topic in 401(k) Plans

ADP Test for Fiscal Year Plan: Use Leftover Catchup from Previous Calendar Year?

"6/30 plan year 401k plan, non-safe harbor is failing ADP test. It failed 6/30/21, too, but by recharacterizing $1,200 of the sole HCE's deferrals, a refund was avoided. For 6/30/22, the same sole HCE doubled his deferrals so is failing much worse. He deferred $28,100 for the plan year (not exceeding any calendar year limits), so even when subtracting the catchup, he still needs a refund of $6,700. The thought was that there's $6,500 - $1,200 = $5,300 of catchup that was unused from the previous calendar year - can that be used in this plan year somehow as well? Either to reduce the starting deferrals that are used to calculate the ADP test ($28,100 - $6,500 = $21,600 currently), or to partially offset the amount that is slated to be refunded ($6,700 currently)?"

4 replies so far   |    Click Here to Add a Reply

Basically created a topic in Form 5500

Final Year 5500-EZ, Plan Also Funded

"A Dr. has a plan. He is a sole member entity. He took a position with a larger medical practice starting Jan 1, 2023. He fully funded his plan for 2022. There is no reason we need to keep the plan open past 12/31/2022, right? The 2022 contribution money is in and now want's to roll everything out and into an IRA to close the plan before the year end so he doesn't have a 2023 administration. No problem right? - Roll everything out into the IRA - Generate a 1099-R for the rollover - File a final form 5500-EZ for 2022 Thanks (There is so much good info to learn when you start clicking on posts in all message board areas! I find myself getting into topics that I did not intend to and before you know it you have forgotten why you are here)"

1 reply so far   |    Click Here to Add a Reply

Danny CPA created a topic in IRAs and Roth IRAs

Theft of IRA Assets & Settlement

"I believe I know the answer here, but I am just looking for something definitive that supports my position. A client had approximately $60K worth of Bitcoin in their Roth IRA that was stolen through a hack on one of the crypto exchanges. They believe they are going to receive a settlement check (unsure of the amount) from a lawsuit. Client wants 100% of the proceeds to go back into their Roth IRA. I believe this would be permissible and would not be considered a contribution for the year. I can't find anything definitive to support/oppose that position though. Thoughts? Agree/Disagree?"
1 reply so far   |    Click Here to Add a Reply

Dalai Pookah created a topic in Plan Terminations

Purchase or Distribution of Annuity to Annuitant/Participant in Plan Termination

"A defined benefit plan purchased an annuity from Prudential for one of its participants. The plan is terminating and the participant is willing to either take a distribution or purchase the annuity from the plan. The annuity has a Highest Daily Lifetime 6 Plus Rider, which Prudential is saying will terminate if the annuity is transferred to the annuitant. this rider provides the major value of the annuity. Examining the rider, there is nothing to indicate that a transfer to the annuitant is not allowed. I have little experience analyzing these annuities, but it does not make sense that an annuity sold to a qualified plan would have provisions negating its provisions if the ownership of the annuity is changed from the Plan to the annuitant. This is what we expect would happen either upon termination of employment or termination of the Plan. Prudential is being opaque. They keep saying the transfer will not be allowed to maintain the rider, but will not offer language in the rider (or elsewhere) that supports this assertion. Can anyone offer insight and guidance here?"

No replies yet   |    Click Here to Add a Reply

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