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What's a "pay phone"? What's a "collect call"? 😆

Does the Plan require true up based on annual pay? If yes then you need to follow the document and give him a true up. The Plan can limit to compensation to while he is a participant but a non-deferring participant is still a participant. So if he entered 1/1 but didn't decide to start contributing until 7/1 he's still a participant as of 1/1.

John Hancock and American Funds Recordkeeper Direct both allow you to allocate future or to reallocate your entire account. 99% of the time, participants want to reallocate the entire account but I have had a few that only wanted their future contributions to go to a new fund.

The employer might want its employee-benefits lawyer’s advice about these (and other) possibilities: For the periods for which the plan (if a plan was created) had not been communicated to employees, it might not be a tax-qualified plan. “A qualified pension, profit-sharing, or stock bonus plan is a definite written program and arrangement which is communicated to the employees and which is established and maintained by an employer[.]” 26 C.F.R. § 1.401 1(a)(2) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401-1#p-1.401-1(a)(2). But if neither the employer nor any participant paid in a contribution (including a rollover-in contribution if the plan allows them), how much should one worry about the plan not being tax-qualified? From creation (if a plan was created), the plan might be a plan governed by title I of the Employee Retirement Income Security Act of 1974, and one or more of the plan’s fiduciaries might have breached a responsibility to communicate to employees the plan’s existence and essential provisions. If so, a fiduciary might be liable to make good a participant’s loss (for example, a lost elective deferral opportunity) that resulted from the fiduciary’s breach in not meeting a communications responsibility ERISA’s title I requires. But the employer that serves as the plan’s administrator might evaluate how likely or unlikely it is that a participant is aware and mindful of her ERISA rights. Or an IRS-recognized correction about a failure to provide an elective deferral opportunity might reduce a fiduciary’s ERISA liability to make good the participants’ losses.

Our plan at Empower offers three options to move money currently invested: (1) Transfer existing investments (move money from selected investments to other investments) aka "Direct Transfers", (2) Reallocate your holdings (change holdings percentages for your investments aka "Update Holdings", (3) Rebalance to current investment allocations (adjust your holdings to match your investment allocations) aka "Rebalance Account". Then, there is an investment allocation choice for new money which may or may not match what you requested when you transferred your existing investments.

Whether or not an entity is governmental for purposes of the low 400s of the federal tax code can be very tricky to determine and in my experience the IRS can be pretty demanding about the criteria because governmental plans are not subject to discrimination rules, among others. Your your penultimate paragraph is a bit simplistic, but is the starting point for the analysis. Your initial skepticism is warranted.

The problem with having two elections as it completely defeats the purpose of automatic rebalancing. The moment the next contribution comes in - and with each and every "new money" in transaction, you destroy the value of the rebalancing. And then, when the next rebalance occurs, you destroy the value of your new money election. As far as I know (and i have personal experience with Fido and Schwab), no one does automatic rebalancing with dual elections. If someone really wants to do that - do a manual rebalance (fund to fund investment transfers) without changing your new money investment elections. Not sure why anyone would want to do that, but that's really the only way to do it.

The effective date of coverage when experiencing a mid-year permitted election change event is generally a matter of plan design. I recommend making coverage effective the first of the month following the date of the election change request (as opposed to the event) to avoid retroactive payment issues. The exception of course is for birth, adoption, and placement for adoption--which must be effective date of event. Here's an overview: https://www.newfront.com/blog/hipaa-special-enrollment-events-2 Section 125 Permitted Election Change Events: Paying for Retroactive Coverage Employee pre-tax premium payments are made through the company’s Section 125 cafeteria plan. Section 125 does not permit retroactive elections except where the event is birth, adoption, or placement for adoption. (There could also be a retroactive mid-year election for a new hire for elections made within 30 days after date of hire.) In all other cases, the election must be prospective. This means that the employee cannot pay for an election change on a pre-tax basis for any period prior to the date of the election. Example 1: First of the Month Following Election Change Request For example, assume again that Jack marries Jill on January 19, and submits the election to enroll Jill on February 14. As described above, the standard approach would be for coverage to be effective as of March 1 (first on the month following the date of the election change request). Example 2: Date of Election Change Request Some employers may choose to be more generous and permit Jill’s enrollment as of February 14 (the date of the election change request). If coverage is effective as of February 14 (the date of the election change request), there is no issue (assuming the carrier or stop-loss provider approves of the more generous practice) because coverage is not retroactive from the date of the election change request. Example 3: Date of Event On the other hand, if coverage is effective as of January 19 (the date of the marriage), there would be an issue because coverage is retroactive from the date of the election change request (February 14). In that case, there is no basis for permitting Jack to pay for Jill’s coverage on pre-tax basis for the period prior to the date of the election (from January 19 through February 13). That would mean that either a) the company must pay the full cost of coverage for the period from the date of the event to the date of the election, or b) the employee must pay for the coverage on an after-tax basis for the period from the date of the event to the date of the election. Needless to say, neither of those options are ideal. Many companies avoid this issue by providing coverage as of the first of the month following the date of the election change request (except for birth, adoption, and placement for adoption, and mid-year new hire elections made within 30 days of hire). That will always permit the employee to pay pre-tax for the employee-share of the premium for the entire period of coverage. As a reminder, employers should seek insurance carrier (or stop-loss provider) approval for coverage to be effective as of the date of the event because that is only required for newborns and children newly adopted or placed for adoption with the employee. Slide summary: 2023 Newfront Section 125 Cafeteria Plans Guide

Yes, there are many possible ways, and even many widely used ways, to state an instruction for investment allocations. And yes, it’s not unusual for a regime to align instructions for accumulated balances with instructions for ongoing contributions. From context, I’m guessing your query is about a participant’s investment direction expressed as a standing instruction—one that regularly and periodically continues, rather than an instruction that’s one-time or episodic. While it might be useful to consider recordkeepers’ methods, a more immediate question is whether the allocations the particular recordkeeper’s operations produce follow the text of the form the directing participant signed. If the allocations a recordkeeper produces vary from those that would result by following the standing-instruction form, it’s time to rewrite the form to communicate accurately and fairly what the recordkeeper really does. Or if the allocations follow the standing-instruction form but are not what a directing participant expected, it’s time to rewrite the form to communicate helpfully to a reasonable reader. (We know either effort will partially fail because of some participants’ aliteracy. But that doesn’t excuse trying to write a text a reasonable reader could comprehend.) If the clients you mention are employers that serve as plans’ administrators, you might be on to something to suggest a fiduciary attend to this. In my experiences, what recordkeepers do often makes good sense, but sometimes is communicated less skillfully than one might like.

I guess I would question why the participant has elections for new money that are inconsistent with elections for existing money? Actually, we have no "elections" on file for any participant when they reallocate their investments. It's a one time thing that occurs on demand - and those "elections" are not preserved. New money is (apparently) where the participant wants the money to go - and we rebalance to that election as well.

I'll take a stab at it and I'm assuming a calendar year plan since you said calendar is stability period. This is how I would calculate it. Take the benefit at 9/1/2015 and adjust to 12/31/2015 at the AE in the document for 2015 (2015 table and rates) This becomes his protected floor benefit at 1/1/2016. Actuarial increase from 1/1/2016 to 12/31/2016 at the AE in the document for 2016 (2016 table and rates) Repeat each year until 12/31/2022 Actuarial increase from 1/1/2023 to 3/31/2023 at 2023 rates. Check each benefit to make sure you don't exceed 415. You "probably" don't, given the starting point, but the with 9 years of increase the 100% of pay limit could come into play. As for lumpsum. 3/1/2023 benefit from above times the APR using the 2023 AE and check against the 415 lump sum max.