rocknrolls2

IMHO, not enough facts are known to provide a definitive answer. First look at the plan document. Does it credit service using the counting hours method or usimg the elapsed time method? It would also help to know what the employee's date of hire is. If the hours counting method is used, do eligibility computation periods after the first year switch to to the plan yesr or do they remain 12-month periods that start on the anniversary of the date of hire? One other factor is whether eligibility determinations continue in spite of the suspension of benefit accruals. For this, you need to obtain the plan amendment imposing the suspension. Once this information has been assembled, it will be easier to determine whether and when the employee in your example became eligible.

To further stir the pot on the inanity of NJ's taxation (I am a resident), NJ also does not allow an income tax exclusion for pre-tax contributions to cafeteria plans, flexible spending accounts and 132(f) transit accounts. Even though it has an exclusion for contributions to a cafeteria plan, most employers' concept of a cafeteria plan do not satisfy the conditions for the income exclusion section.

I represent a multiemployer apprenticeship fund which leases office space from its building to a union appointing trustees to the fund. From my reading of the 2025 VFCP, it does not appear that the leasing of office space between the union and the fund is eligible for correction under VFCP. Does anyone think differently on this?

But has the bonus check been paid to the 2 owners? If the answer is yes, no deferral allowed.

Thank you, Peter. Those are excellent points to consider in dealing with this issue. And thank you, Frank (fmsinc) for the helpful case references.

Peter, To answer your questions: the death benefit is provided by a life insurance contract under an ERISA governed plan. The SPD is the plan document. The SPD provides that the designated beneficiary needs to file a claim for life insurance within one year from the employee's date of death. If no claim is timely filed and the whereabouts of the beneficiary are unknown, the disposition of the benefit will be determined by the provisions of the claim policy of the life insurance carrier indicated in the summary of benefits insert. If the plan were to be amended to adopt a missing participant policy, which should require that the whereabouts of the beneficiary be attempted in spite of his or her deportation and such attempt is unsuccessful, even though it is after the fact, since we are not talking about a qualified retirement plan and there is no vesting for welfare benefits (absent a plan provision to the contrary), could the plan treat the beneficiary as having predeceased the participant? I could see that such a provision could apply prospectively, but I am concerned that the amendment would not be valid retroactively.

A participant of a welfare benefit fund passed away. However, his primary beneficiary has been deported and the plan officials have been unsuccessful in attempt to locate her. Can the plan treat the beneficiary as having predeceased the participant and make the benefit payable to any contingent beneficiary or, if none, the plan's default beneficiary? Alternative, can the plan treat the beneficiary as a missing beneficiary and treat the death benefit as it would with respect to any other missing participant or beneficiary under the plan?

I agree with Peter that, from a plan document standpoint, an amendment to require mandatory automatic enrollment is likely within the remedial amendment period. However, because this is a mandatory requirement for plans that do not satisfy the grandfather rule or are church or government plans, there is an operational aspect to this that would require correction. Effective for the 2025 plan year, automatic enrollment should have been implemented for the plan's participants. For that, it would make sense to provide qualified nonelective contributions allocated to the accounts of participant who were not already making elective deferrals to the plan in the amount of the missed deferral opportunity, as per Rev. Proc. 2021-30.

You have not explained who owns which percentages of ABC Company. That would be needed to make a determination.

Brian and Peter, You have raised some pretty good points, I agree.

Following up on this, in the responses citing state wage payment laws, I have seen a number of cases holding that such laws are preempted by ERISA (even applying the more narrow view of preemption that the courts now seem to be following). I know that refunding the overcharge (versus overpayment) is the right thing to do and that it is also the right an ethical thing to include interest, but I am not convinced that reliance on state wage payment laws, in itself, is something compelling the employer or trustee to do so. Any thoughts on that point would be especially welcomed.

The group health plan is self-funded. The participant contributions are deposited into a trust. The employer also contributes for a portion of the premiums.

Employee A works for Company X. For 2025, A elected family medical coverage under X's health plan. Family coverage costs the employee $275 in monthly premium payments. Employee A was actually charged $300 per month for such coverage. X's health plan discovers the error in the third quarter of 2025. Is X required to repay A the amount of the extra premium amount? Is X required to include interest on the reimbursed premium amount?

From my experience, there was a lot of discussion of creating a correction program akin to EPCRS, to deal with 409A violations. That appears to have fallen by the wayside. Unless there is pressure to rekindle the idea, I think it is likely to go nowhere for the foreseeable future. What complicates this further is that the prospect of top execs facing significant tax exposure does not necessarily tear at the heart strings of many of the key policymakers in Washington.

Thanks David and Peter, One thing that likely also played a factor at the time Manhart and Norris were decided was that the "glass ceiling" was substantially lower than it is today. I know from the experience of two brilliant highly-motivated adult daughters, who have moved rapidly up the corporate ladders of their respective careers, only to run smack into the glass ceiling as it currently stands.