DCqanda

I've got a client that is asking whether Medical Loss Ratio (MLR) rebates paid back to employees from a health insurer can be considered retirement plan compensation. The plan has the following exclusion: All fringe benefits (cash and noncash), reimbursements or other expense allowances, moving expenses, deferred compensation, and welfare benefits are excluded. No other exclusions are chosen. The plan uses 3401(a) as the definition of compensation. The client's argument is yes since it is the participant's compensation that is being rebated. This isn't like a flight, hotel, or car rental, but an overpayment that would have otherwise been in their salary. What I've seen is that these amounts typically are for a prior year's premium payment and I wonder if it wasn't already considered plan compensation during that year? I know the paycheck reduction is pre-tax for the health plan premium but I believe that it is still considered plan compensation under "Elective deferrals or salary reductions made pursuant to §125, etc" The payroll code is currently no but no documentation exists for why. Some context: https://www.irs.gov/newsroom/medical-loss-ratio-mlr-faqs Scenario D seems the be the relevant scenario Anyone gone down this trail already? I'd also be interested in hearing about best practices for taking the numerous contemporary payroll codes and properly assigning them to plan's compensation under the little guidance that the retirement plan regulators and plan documents provide. The IRS used to post a chart online Definition of Compensation Chart.pdf, until 2013 or so, but even this only has 20 categories. Thank you in advance.

An employee was recently moved from a foreign entity to the US entity of the same company that sponsors a 401(k). They are a resident non-citizen with US income now. Should the original hire date form the foreign entity be used for crediting service for vesting? Or the date that they moved to the US and began employment with the US entity? The plan document is mum on the topic; no provisions that state how to credit service based on service at the foreign entities. The plan has immediate entry but ER contributions have a vesting schedule. Thank you in advance.