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Look at eligibility for a CB credit or PS contribution independently to determine whether someone gets either or both, and then apply your gateway requirements, which might result in all being provided through PS. if provisions don't allow for enough to get gateway then you're looking at an 11(g) amendment. Other complicating factors include top-heavy and safe harbor non-elective. All this should have been flushed out when the CB was designed and implemented and PS provisions amended for compatibility. 1) Employed 12/31 but <1000 hours, CB depends on requirement, PS depends on top heavy. If they get anything in either plan then they must get gateway. 2) Terminated >1000 hours, CB depends on requirement, PS nothing. If they get CB they need to get gateway. If PSP has no overriding failsafe language for gateway then you need an 11(g). I like to see CBP with 1000 hour requirement and PS individual groups with no requirements, and if it's a SHNE then that's what you essentially need..

Look for the term "Forfeiture Break in Service" in your plan document. That's what ours uses. After 5 Breaks in Service the non-vested funds are forfeited. I'd guess the first Break in Service was 2019. Forfeiture in 2024 is right on track.

@Lou S. is on target with the intent of USERRA. See the Department of Labor website here https://webapps.dol.gov/elaws/vets/userra/ben_pens.asp This is a link within this site https://www.dol.gov/agencies/vets/programs/userra and the Know Your Rights menu item. The short answers, subject to some disqualifying circumstances, are yes, the individual gets eligibility service, and no, the military service is not disregarded. These answers also apply to vesting and benefit accrual service. @justanotheradmin in on target with reading the plan document. There are some choices that plan sponsor can make that will affect how benefits are calculated such as adjustments to plan compensation. how hours are counted, crediting hours to avoid a break in service, treatment of an outstanding loan balance, in-service withdrawals, death benefits, make-up contributions and likely more.

I disagree with the TPA. An overspent FSA when dropping COBRA is just like an overspent FSA when terminating employment. The employer has no ability to recover that overspent amount. It's just part of the risk-shifting aspect inherent to the health FSA structure (uniform coverage risk of overspent balances against use-it-or-lose-it risk of forfeitures) that can always lead to net experience gains or losses. Employers cannot recover any amount from an employee who terminates employment mid-year with an overspent health FSA. That would risk disqualifying the entire Section 125 cafeteria plan, resulting in all elections becoming taxable to all employees. No different in the COBRA context. In short, the employee has used COBRA appropriately for the health FSA and has played his cards well. Just like if the employee had overspent the health FSA prior to termination (i.e., without the need for COBRA), the employer can't retro deny claims or do anything else to recover the overspent amount. Note that the situation is a bit more murky when it's an active employee who tries to make an election change the reduces the election below the current YTD reimbursements, but that's not the situation here. More details on that point here if you're interested: https://www.newfront.com/blog/overspent-health-fsa-upon-termination-of-employment-life-event-2 Prop. Treas. Reg. §1.125-5: (d) Uniform coverage rules applicable to health FSAs. (1) Uniform coverage throughout coverage period—in general. The maximum amount of reimbursement from a health FSA must be available at all times during the period of coverage (properly reduced as of any particular time for prior reimbursements for the same period of coverage). Thus, the maximum amount of reimbursement at any particular time during the period of coverage cannot relate to the amount that has been contributed to the FSA at any particular time prior to the end of the plan year. Similarly, the payment schedule for the required amount for coverage under a health FSA may not be based on the rate or amount of covered claims incurred during the coverage period. Employees’ salary reduction payments must not be accelerated based on employees’ incurred claims and reimbursements. IRS Chief Counsel Advice 201012060: https://www.irs.gov/pub/irs-wd/1012060.pdf The cafeteria plan rules require that a health FSA provide uniform coverage throughout the coverage period (which is the period when the employee is covered by the plan). See Proposed Treasury Regulations Section 1.125-5(d). Under the uniform coverage rules, the maximum amount of reimbursement from a health FSA must be available at all times during the coverage period. This means that the employee’s entire health FSA election is available from the first day of the plan year to reimburse qualified medical expenses incurred during the coverage period. The cafeteria plan may not, therefore, base its reimbursements to an employee on what that employee may have contributed up to any particular date, such as the date the employee is laid-off or terminated. Thus, if an employee’s reimbursements from the health FSA exceed his contributions to the health FSA at the time of lay-off or termination, the employer cannot recoup the difference from the employee.

Is there any compelling reason to remove the MP accounts prior to consolidating on a platform? They are already dealing with in-service limitations and QJSA requirements on those accounts, I would think that would become easier on a platform unless the provider cannot handle or handle differently than other portions. Note that MP in-service can be lowered to 59 1/2 now too, if that helps. If you really had to parse those out, I think you could spin-off those accounts into a new separate MP plan - essentially reverse the prior merger - and then terminate that plan. Participants would have to waive annuities with spousal consent, but you couldn't force that, and they could roll lump sums as desired into their IRAs or into the PSP.

I don't think the USCA for the 7th Circuit has addressed this issue but there are cases all over the courntry that have permitted post distribution suits in order to overcome Kari E. Kennedy, Executrix v. Plan Administrator for Dupont Savings and Investment Plan, 129 S.Ct. 865, 555 U.S. 285 (2009). But keep in mind that in footnote 10 Kennedy said: ""Nor do we express any view as to whether the Estate could have brought an action in state or federal court against Liv to obtain the benefits after they were distributed. Compare Boggs v. Boggs, 520 U.S. 833, 853, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997) ("If state law is not preempted, the diversion of retirement benefits will occur regardless of whether the interest in the pension plan is enforced against the plan or the recipient of the pension benefit"), with Sweebe v. Sweebe, 474 Mich. 151, 156-159, 712 N.W.2d 708, 712-713 (2006) (distinguishing Boggs and holding that "while a plan administrator must pay benefits to the named beneficiary as required by ERISA," after the benefits are distributed "the consensual terms of a prior contractual agreement may prevent the named beneficiary from retaining those proceeds"); Pardee v. Pardee, 2005 OK CIV APP. 27, ¶¶ 20, 27, 112 P.3d 308, 313-314, 315-316 (2004) (distinguishing Boggs and holding that ERISA did not preempt enforcement of allocation of ERISA benefits in state-court divorce decree as "the pension plan funds were no longer entitled to ERISA protection once the plan funds were distributed")." Some of recent cases upholding post-distribution suits are: Andochick v. Byrd, 709 F.3d 296 (USCA 4th Cir.,2013). In re: Marriage of Stine, No. A154972, Court of Appeals of California, First District, Division One, - Filed November 22, 2019 - that you can find at - https://scholar.google.com/scholar_case?case=17865274454005199096&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:14880692104701005079:AAGBfm2qi1_JaXLJvydb4f3quYTnTlLkbA cited Andochick v. Byrd. Hennig v. DIDYK, Tex: Court of Appeals, 438 S.W.3d 177 (2014). In McCarthy v. Estate of McCarthy, No. 14-CV-6194 (JMF), United States District Court, S.D. New York (2015) United States District Court for the Northern District of Ohio in Davis v. Drake - http://scholar.google.com/scholar_case?case=3333936970567538351&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt Cunningham v Hebert, Case No. 14 C 9292, United States District Court, N.D. Illinois, Eastern Division. November 1, 2016 - that you can find at: https://scholar.google.com/scholar_case?case=17784378297196159743&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt There are many other from US District Courts as well.

sure. be careful if the auto enroll is structured as a QACA as it will impact other areas, but removing auto enroll is allowed. and if the plan is grandfathered under the pre-SECURE 2.0 rules, then having auto enroll is not required period. and the plan will have to let people know, for example if they are deferring due to auto enroll, is the plan going to put them at zero, or leave them at their %. But for 11 people, why not just get everyone to sign a form electing zero if they don't want deferrals taken out? Or are they wanting to remove it because the 3 year tax credit for it is up? and don't want it cluttering up their plan?

Got it, and for sure a corporate trustee would only accept trusteeship/responsibility for those assets that it also custodied. Here's another thought - if you can find a corporate trustee (recordkeeper?) that also offers a brokerage window, which might also accommodate the ability to transfer existing brokerage accounts' assets in-kind. That doesn't fix the MP issue but does get all assets under one roof/responsibility for simpler admin/reporting but somewhat placates those wanting their brokerage accounts.

WE tell clients to set a policy on this based on factors Paul I and David said and document it. Be consistent is key. Most of my client what determines it is if there are regular working hours on the weekend the last day is the day of the month. If no one works on the weekend as a rule they set the policy if you work the last Friday of the plan year that is the last day. I have never seen the IRS or DOL challenge either way as long as it is done consistently.

Also relevant is whether there is, or might be, some regular work hours on that day (ie, without regard to it being a Sunday).

The allocation condition to be an active employee on the last day of the plan year typically applies to employer contributions such as non-elective contributions or matching contributions (allocated annually). The fact that the last day is on a Sunday is not an issue for employees who are continuing actives. The common decision a plan administrator has to make is whether an employee formally terminates employment and/or retires on the last pay date (6/28 in the question). Some plan administrators take the position the last day is satisfied if the employee worked on the last available work day. Some plan administrators take the opposite position. Some plan administrators consider the reason for the termination (retirement, disability, voluntary termination, involuntary termination). Some plan administrators look at payroll practices so if an employee is paid for a pay period that includes the last day of the plan year, then the employee was active on the last day. Some plan administrators look at how the last day is defined in their health and welfare plans. Whatever or however the decision is made, it must be applied consistently and uniformly to all similarly-situated employees. If the plan is top-heavy, the plan could exclude an employee who is not active on the last day from getting the top heavy minimum contribution (if there is one). Again, be careful that the decision is applied consistently and uniformly.

No, I don't think so. If, for example, a participant got fired on Friday, participant would not satisfy the last day of the plan year requirement. It would be very unusual for a document to specify the last pay date in the plan year for allocation requirement, although it could - I've certainly never seen it.

Yes. Class specific match groups are written into plans all the time. Usually done only for regular match (not safe harbor or its variants). As long as testing (coverage, ACP etc) passes its fine.

The end of December marked the end (at least for now) of my 41+ years in this business, starting as a part time DC system programmer (before I knew what a "forfeiture" was) and ending as an Enrolled Actuary with all the ASPPA exams completed as well. I have also been a Benefitslink Board participant for more than 23 years. Here, as well as through the exams, is where I learned my stuff. I am grateful for the learning, teaching and helping opportunities (and more than a little fun) created by Dave and Lois Baker through this awesome system. Their efforts aren't appreciated enough. Thanks also to the countless Board participants that have educated and helped me over the years; and I hope I've been able able to help others as well. I still plan to linger now and then but goodbye and Happy New Year for now! Thanks again Dave and Lois.

Andy - Yes, without having the pressures of a work schedule, I now attend morning Mass. And taught myself how to play the psaltery, so they even get a little extra music for the morning. Wonderful instrument, wish I had discovered it earlier. I seem to recall one of the questions I worked into the Nondiscrimination answer book went something like "Andy's Heart Nut Company..." May God grant you many years of wonderful retirement.

I was driven out by the (In)secure Act 2.0. I still lurk every day. It confirms my decision to hang up my ghosts. I got many a piece of good advice on these boards. Dave and Lois, you've provided an invaluable service and I'm eternally grateful for it.

Enjoy retirement Andy! You have earned it! I will also echo the appreciation for Dave, Lois and this forum . It is such a great resource for this community and I always enjoy meeting my fellow benefitslinkers in the wild!

(And of course, thanks for leaving me a bunch of plans to have to take over on! 😁)

Thank you, AndyH, and thanks for reminding us all to recognize the amazing resource that Dave and Lois Baker have created for all of us. As I have moved between HR and TDA and back again I have benefitted from BenefitsLink and especially the forums to refresh my memory or to get up-to-speed on a new facet of retirement administration. Best wishes, AndyH, on your retirement, and gratitude to the Dave and Lois!

Amen!