Miner88

Is a Wellness Program that offers cash incentives for such activities as completing a wellness assessment, viewing on-line seminars, etc. a "group health plan" subject to COBRA? What if the Wellness Program also has a disease management piece in that it reaches out to employees who have certain diseases (asthma, diabetes, etc.) to give them advice and coaching to manage their disease? Any thoughts would be appreciated!!

Thanks for all of your replies. Yes, Deferral Contribution is a defined term in the plan and it does not include catch up. I was planning on correcting the error as a self correction of an operational error under EPCRS - the overpayment will be taken from the participant's account with earnings (calculated based on the lowest earnings rate for the period for the menu of funds available). Someone in HR suggested that we would need the participant's consent to take money out of their accounts, and, although I didn't agree, I wasn't 100% sure.

It is a discretionary match determined each year by the Board. The way the resolution was written was that the match is made "in the amount of 2% of the Deferral Contributions made by each Participant." HR looked at both elective deferrals and catch-up contributions to determine the amount that was 2% and sent that amount over to the TPA as the match amount.

Our 401(k) plan document does not allow for matching contributions on catch-up contributions. However, HR has been matching catch-up contributions for 3 years and just discovered the error. To correct the error, we are going to take the overpayment out of participant's accounts (along with earnings). Do we need the participant's consent to do this?

Thank you Bird!

Thanks for the reply rcline46. There will be far less than 20% of the participants being terminated, so I don't think there will be a partial termination. I was wondering if there were issues with giving just the new employees contributions (and differing amounts among that group itself) and not the existing participants in the buyer's plan. Also, aren't there limits as to the amount that an employer can contribute during a plan year or that a participant can receive - would these limits apply in this case?

If a company, as part of a divestiture, is terminating employees who are just shy of vesting in their pension and/or 401(k) plans, can the buyer make a one-time contribution to the new employee's 401(k) accounts in the buyer's plan to make up for the present value of the forfeited benefits? What issues need to be considered?