Message Boards Digest

November 3, 2023

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

mefrancis1729 created a topic in Distributions and Loans, Other than QDROs

RMDs to Beneficiaries (Parents) After Participant's Death

"I have a combo 401(k) PS/CB. Owner died unexpectedly in December 2022 while in his 50's. He has no spouse, children, or completed beneficiary forms. His parents (in their late 70's) are the beneficiaries for both plans.... [B]oth plans are being terminated.... Are the parents required to take RMDs from the plans due to their ages or not since the owner was not of RMD age? The plans should be paid out by the end of 2023 or early 2024. There will be required payments from the inherited IRAs, but that is outside the plans. I am more concerned that while the plans are open, the RMD rules are being followed."

1 reply so far   |    Click Here to Add a Reply

52626 created a topic in 401(k) Plans

Coverage Testing

"Controlled Group Company A sponsors a traditional 401(k) Company B sponsors a traditional 401(k) [1] Plan design is identical -- same service, match etc. When completing the coverage test each plan on its own will pass coverage: Company A -- 25 HCE all benefiting / 100 NHCEs all benefiting. Company B -- 75 HCE all benefiting / 1250 NHCEs all benefiting. Each entity passes coverage on their own. It there a requirement that the numerator in the coverage test include the total for each entity?"

4 replies so far   |    Click Here to Add a Reply

Jakyasar created a topic in Retirement Plans in General

Confirming RMD Due Date

"DC plan. Joe DOB 12/1/1951 -- when is first RMD due? Mary DOB 10/1/1950 -- when is first RMD due? In both cases when is second RMD due?"

5 replies so far   |    Click Here to Add a Reply

metsfan026 created a topic in Defined Benefit Plans, Including Cash Balance

Vesting at Plan Termination

"Good morning, I hope all is well. I have a Cash Balance Plan that's terminating as of the end of the year. I know upon termination everyone becomes 100% vested.... If someone has been out for 5 years, do they lose their benefit if they weren't 100% vested? It's a 3-year cliff vesting schedule, if that matters. I looked in the document, but I can't seem to find the wording, just want to make sure I'm right."

1 reply so far   |    Click Here to Add a Reply

ERISA-Bubs created a topic in Securities Law Aspects of Employee Benefit Plans

SEC Remediation

"We had an SEC audit recently, and the SEC found some issues that they say require remediation. I don't want to get into too much detail about the actual issues, but we would like to remediate them by contacting the affected parties directly and explaining to them the issue and what we are doing to correct it. We do not want to put anything in writing. While we want to fully correct the issues, we do not want to risk any reputational harm that may stem from having written documentation out there, implying that we did something nefarious. Is anyone aware whether the SEC ever allows 'oral' remediation? Are there any examples out there of this ever happening? The SEC handbook defines remediation as 'dismissing or appropriately disciplining wrongdoers, modifying and improving internal controls and procedures to prevent recurrence of the misconduct, and appropriately compensating those adversely affected.' We intend to do this; we just want to do it orally."

No replies yet   |    Click Here to Add a Reply

Basically created a topic in Retirement Plans in General

Business Closing; Can Plan Continue?

"I have always understood that a pension plan must have a business to sponsor it. If the business closes then the plan must close. It's as simple as that, correct? A client want's to keep the plan going so that if by chance down the line he want to take a loan he could. I advised him that if he can't keep the plan if he closes his business."

5 replies so far   |    Click Here to Add a Reply

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