Message Boards Digest

May 25, 2023

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

PS created a topic in Plan Terminations

Puerto Rico Plan Termination

"This is the first time I'm handling a Puerto Rico Plan that needs to be Terminated. I would like to under how different this is from a regular plan termination specially when it comes to a [1] forced distribution for the unresponsive participants. [2] Any special notice that needs to be sent out to the participants? [3] Can Participants be rolled over to an IRA account? should that be Puerto Rico Individual Retirement Account only? [4] What are the option available for a participant that has loan? [5] how does 5500 and Non-discrimination testing work?"

No replies yet   |    Click Here to Add a Reply

AMDG created a topic in 401(k) Plans

Increased Catch-Up Limit for Ages 60-63 - Mandatory?

"Just curious if the change to 414(v) (based on Section 109 of SECURE Act 2.0) is mandatory. In other words, a plan sponsor may choose to permit age 50 catch-up contributions. If permitted, then *must* the plan permit the full increased catch-up limit for ages 60-63, or *may* the plan impose the same catch-up limit for all age 50 catch-up contributions regardless of age?"

6 replies so far   |    Click Here to Add a Reply

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

Distribution to Beneficiaries who are Minors

"I work for a bank that is trustee of a 401k plan. One of the participants passed away in 2019 with no beneficiary form. He has $590 in his account. He was not married. He has 6 children. In the state where he lived, 18 is the age of majority. 4 of his children are older than 18. The other two are 15 and 17 years old. Each bene is due around $95. For the 2 children who are not 18, must those checks be paid to a guardian? I think those 2 kids might be living with a grandmother. If the payment has to be made to the guardian, do I need to request something to substantiate who is legal guardian for the two minor children?"

1 reply so far   |    Click Here to Add a Reply

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

Participant Awarded Non-Spousal Pension by Lying About Being Married; He's Now Deceased and Wife Wants Her Spousal Benefits

"Multiemployer pension plan. Participant files an application for benefits. States he is not married and chooses a non-spousal, 60 sum certain form of payment. Lists son as his beneficiary. Participant received payments for about a year and dies. Just to complicate matters, participant never cashed his payments. Son began receiving the payments that participant was entitled to before his death, along with the remaining payments for over a year now (and continues to do so). The Fund has now learned that participant was married at his effective date and at his death. Spouse now wants her pension benefit. Not that we are obligated to follow it, but the probate court has awarded her spousal benefits. No idea if it is applicable, but our plan document does include a statement that if a participant, beneficiary, ect makes a false statement/furnishes fraudulent information relevant to a claim for benefits, then benefits not vested shall be denied, suspended, or discontinued. But the fact that we are dealing with vested benefits, I'm not sure we could have the participant's actions effect the wife's entitlement to benefits. Any suggestions on how to handle this situation? Just spitballing here, but it seems like we need to stop the son's payment ASAP. With SECURE Act 2.0, its likely gonna prove difficult to seek an overpayment from son, unless we have on record some fraudulent statement made by him, which I doubt. Once the wife applies, we should adjust the form of payment to a spousal pension, and give her the payments participant was entitled to prior to his death, and spousal payments until her death. I don't like the thought of having to pay out some benefit periods twice, but I'm not sure there is any way around it. We probably should also set the record straight with the probate court about federal preemption. Any and all guidance is appreciated."

5 replies so far   |    Click Here to Add a Reply

SSRRS created a topic in Retirement Plans in General

Paying Plan Fees with Plan Assets

"A portion of a Plan's assets were discovered as unclaimed funds and returned to the plan sponsor. This was done by a company that specializes in finding unclaimed funds, and this company is charging a fee (commission) for finding these assets. Can plan assets be used to pay this fee? Is this considered a settlor or a non settlor expense?"

3 replies so far   |    Click Here to Add a Reply

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