Message Boards Digest

January 23, 2023

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

Below Ground created a topic in Retirement Plans in General

Ethical Dilemma

"Hypothetical situation: Trustee terminates plan and takes all money, including monies due to employees. Takes this money and transfers into a personal IRA for this trustee. Believes he/she can get away with it since no reporting of benefits was ever done to participants. What is the TPA or actuary's obligation in this situation?"

9 replies so far   |    Click Here to Add a Reply

joef created a topic in 401(k) Plans

SECURE 2.0 317: Retroactive First Year Deferral for Sole Prop

"Under SECURE 2.0 section 317, a Sole-Prop can RETROACTIVELY elect to defer for a new startup 401k for PYs beginning after 12/29/22. Normally I would think that means “for 2023 PYs”, but could the following work:

  1. Initial SHORT PY = 12/30/22 - 12/31/22
  2. Limitation Year = calendar year ending within PY
  3. Compensation Computation Period = calendar year ending within PY
  4. Therefore elect to defer full 20.5K/27K for 2022 PY fully deductible for 2022 Tax return.
  5. (+ PS alloc up to 415 limit, which is NOT prorated since Limitation Year is full 12 months, as well as Comp year; this part was already available for retroactively adopted plans I believe)

I’m a pension actuary obviously trying to think outside the box and there may be other boundaries that can’t be crossed that I am not thinking of. 401ks are not my forte."

10 replies so far   |    Click Here to Add a Reply

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

DB RMD Paid in Lump Sum Rather Than Monthly

"Participant turned 72 in 2022. The AB 1/1/2022 is $1,000 and 12/31/2022 is $2,000 Must start RMD 4/1/2023. Does not want to take it monthly, wants a lump sum withdrawal. As 9 months in 2023, is it correct to provide $18,000 on 4/1/2023 (9 * $2,000)? If taken later, would you adjust each monthly payment from 4/1/2023 to date of withdrawal by 5% (plan pre/post %). If wants to take in February 2023, would you adjust the distribution to 11*$2,000 i.e. $22,000 Any other corrections to my math/thoughts,?"

2 replies so far   |    Click Here to Add a Reply

JProehl created a topic in Nonqualified Deferred Compensation

W-2 Reporting on Employee Deferrals

"We are looking at setting up [a nonqualified] plan that has a discretionary employer contribution and also allows the employee to defer a portion of their pay. I am confused a bit by the IRS W2 directions because they do not seem to indicate any reporting in Box 12 Y for employee deferrals. From the NQDC Reporting Example chart in the IRS Publication 'Example 1 -- Deferral, immediately vested (no risk of forfeiture). Regular wages: $200 Defer, vested: $20 Employer match, vested: $10 Box 1 = $180 ($200  -- $20) Boxes 3 and 5 = $210 ($200 + $10) Box 11 = $0' There is no mention of Box 12 Y, yet the directions for Box 12 Y clearly indicate 'Deferrals under a section 409A nonqualified deferred compensation plan'."

No replies yet   |    Click Here to Add a Reply

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