Message Boards Digest

April 18, 2023

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

smallbusinessquestion created a topic in Plan Terminations

Market Value Adjustment for Stable Value Fund During Plan Termination

"Hola, I am working with a small 401k that is terminating due to a buyout. The existing 401k plan has a stable value fund, which is now triggering a Market Value Adjustment. I have reached out to the fund requesting information on a put option, but since the plan is terminating, I am not sure that even if the put is allowed. Date of termination hasn't yet been established - but the assets generally must be distributed within a year of the date. I'm concerned that the put option (if available) might be more than 12 months."

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Bri created a topic in Plan Terminations

Gated Hedge Fund Affecting Distribution of Assets at Plan Termination

"Husband/wife (only) CB plan. Terminated last March. Plan was sufficiently funded, and the plan document allowed for a pro-rata increase to plan benefits up to the 415 limits. (Neither was reached, even.) IRA rollovers processed a year ago for MORE than the actual accrued benefits under the formula. Problem is -- there was a $200K residual balance stuck in a gated hedge fund. It still exists a year later because they can't seem to liquidate it. So the 'get all assets out in 12 months' has now been broken. Technically the employees (not old enough for an in-service) both got more than they were required to. At this point I'm just wondering who's seen this kind of fact pattern before and what became of it. I wouldn't think the original rollovers would draw IRS scrutiny, but would finally moving any further excess to IRAs at this point, even with re-papering the participants, be problematic? Could the IRS deem any amounts at this point just a reversion to the sponsor? (Hiding behind the idea that the participants are technically fully 'paid enough' at this point.) I wish I knew the limitations on changing the named investor on that hedge fund -- whether or not it could be 'transferred' between plans or to an IRA directly, since it's apparently not liquid enough to sell. (I enjoyed 4-5 years of hell a decade ago due to a gated hedge fund in a DC plan.)"

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Bird created a topic in Distributions and Loans, Other than QDROs

RMDs for 2021 and 2022 After Participant Death - Any IRS Guidance?

"Did I miss any IRA guidance on exactly how beneficiaries must take distributions over 10 years? They initially said, or at least everyone thought, that any time was ok - all in the tenth year if that is what was desired. Then last year they said no, it had to be taken each year, but 2021 and 2022 were ok if RMDs weren't taken. But they didn't say if 2021 and 2022 had to be taken in 2023, or if it would be ok to do it ratably over the remaining years - seems kind of important to be left hanging this long."

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