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Message Boards Digest

May 16, 2023

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

dragondon created a topic in 401(k) Plans

Effect on 401(k) Plan of Plan Sponsor's Change in Business Structure

"If we have a company that is currently a LLC taxed as a S corp but they are changing their structure to be a LLC taxed as a C corp is there anything specific that we need to keep an eye out for in their plan? I assume we need to make an amendment to update the tax structure and the EIN for the plan sponsor. Outside of that is there anything in the plan design that needs to be updated if a tax structure is changed? They don't want to change anything else in their plan such as vesting, eligibility, ect."

3 replies so far   |    Click Here to Add a Reply

Jeff Kirtner created a topic in Retirement Plans in General

Applying for Waiver of Penalties/Interest for Late-Filed 5330s

"A plan had numerous prohibited transactions over a number of years, with very large excise taxes due. The PTs were only recently discovered. We are now filing 5330s. I believe there is reasonable cause and would like to request the IRS to waive interest and penalties on the late filing of 5330s. I am unsure how and when to request the waiver. Does anyone have experience with that?"

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Dougsbpc created a topic in 401(k) Plans

SECURE Act 2.0: Roth Contributions

"The SECURE act 2.0 allows plans to fund matching and nonelective contributions as Roth. [1] I believe the participant must be 100% vested to do this correct? [2] What about safe harbor matching and nonelective contributions. Can they be funded as Roth?"

1 reply so far   |    Click Here to Add a Reply

5500Nerd created a topic in Form 5500

PFML Reported in Form 5500

"We have more and more clients from NY and MA for instance who want PFML reported in the Form 5500 for health and welfare. It is deemed as self-insured. We need to list the benefit code on page two. Would you suggest using 4Q and note list PFML? We assume to list PFML in the SAR as well. Any thoughts/feedback?"

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Belgarath created a topic in Retirement Plans in General

Rehire Eligibility Question

"Starting with the applicable plan language: Rehired Eligible Employee who had not satisfied eligibility. If any Eligible Employee who had not satisfied the Plan's eligibility requirements is rehired after severance from employment, then such Eligible Employee shall become a Participant in the Plan in accordance with the eligibility requirements set forth in the Adoption Agreement and the Plan. However, in applying any shift in an eligibility computation period, the Eligible Employee is not treated as a new hire unless prior service is disregarded in accordance with Section 3.5(d) or (e) below. ... 3.5 (d() or (e) don't apply in the following scenario... Plan uses age 21, 6 consecutive months with at least 500 hours for eligibility, entry date quarterly. If eligibility requirements not met in the initial specified time period (6 consecutive months with at least 500 hours) then the employee is subject to the 1 Year of Service requirement. After the initial 12 month eligibility computation period, the computation shifts to Plan year, which is calendar.

"Original date of hire, 6/6/2017 -- Date of termination 8/20/2017. Had 200 hours of service. Rehire date of 8/2/2021 -- had 833 hours in 2021, over 2,000 hours in 2022. So, since the employee had not met eligibility prior to termination, then what is the entry date? Is it 4/1/2022? 1/1/2023? Other? It appears that since the employee is not treated as a new hire for the eligibility computation period shift, then the eligibility computation period shift has already occurred, and is now Plan Year 2021, then 2022, etc. Thoughts?"

2 replies so far   |    Click Here to Add a Reply

John314 created a topic in Defined Benefit Plans, Including Cash Balance

Terminating DB Plan and Cycle 3 Restatements

"A DB plan utilizes a pre-approved document and intends to terminate before the end of the year. Given we are now into the Cycle 3 restatement period for pre-approved DB plans, does the plan need to restate onto the Cycle 3 document or can they continue to rely on the prior restatement assuming they amend for any mandatory changes since the last restatement?"

No replies yet   |    Click Here to Add a Reply

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