metsfan026

Just a question, after having a discussion with a co-worker. Can a plan have different eligibility dates for a 401(k) and 3% Safe Harbor Contribution, or should they match? I know the eligibility date for a Profit Sharing (or any discretionary contribution) can be different. I just wanted to confirm if the Safe Harbor had to match the 401(k) or not. Thanks in advance!

Thanks! So it would really be just restating the document converting it? Just wanted to make sure there wasn't any other steps

Good afternoon everyone, I hope all is well. I have a new client that has a traditional DB Plan that started in '21. They want to convert that into a Cash Balance Plan. Is there a way to simply restate the Plan (which we need to do anyway) and convert it into a CB? Or do we need to terminate and start a new plan?

I have a client asking about the mechanics of making the employer matching contribution as Roth, as allowed under Secure 2.0. In particular how the taxes are being handled. Is the Match being put through payroll, or are companies paying the taxes independently?

So it would just go to the people active at the time of termination, correct?

I have a Plan that's terminating. Can they allocate the Forfeiture Account to any active participant at the time of Plan termination? They had a few people who had been terminated for at least 6 years, 100% vested, that just refused to take their money from the Plan. They want to avoid giving money to them from the Forfeiture Account, if possible. Thanks!

Perfect. If the owners are among the Top 8, we use them in the Top 8 correct? So it's the Top 8 plus whichever owners would not be included otherwise. Just want to make sure.

So just a little background: There's a total of 37 eligible participants 4 are owners (including owners through family attribution) 19 HCE based on compensation I know you can limit the HCE to the Top 20%, and all owners are considered HCE. So in this case, regardless of the compensation of the owners, would we use them and then the next 4 highest to create the 8? Or do you use the highest 8, and then add any owners who are not included (so you would be over 8)? Thanks in advance!

Here's the language in the document for the Deemed Cash Out. So if someone hadn't been out 5 years, they are now 100% at Plan Termination correct? I just want to make sure my thought process is correct. Thanks! If a Participant's vested interest in his Hypothetical Account is zero, such Participant shall be deemed to have received distribution of his entire vested interest under the Plan as of the date he incurs 5-consecutive Breaks in Service and he shall cease to be a Participant under the Plan as of such date.

I know this is in DC Plans now. Does it also apply to DB Plans?

Good morning, I hope all is well. I have a Cash Balance Plan that's terminating as of the end of the year. I know upon termination everyone becomes 100% vested. My question is, what is the rule to "forfeit" (not the right word) your benefit. If someone has been out for 5 years, do they lose their benefit if they weren't 100% vested? It's a 3-year cliff vesting schedule, if that matters. I looked in the document, but I can't seem to find the wording, just want to make sure I'm right. Thanks!

I'm taking over a client and they are looking to terminate their existing, traditional Defined Benefit Plan to instead utilize a Cash Balance Plan moving forward. I know the limits are lifetime limits, etc. The question is, are they allowed to terminate one and open the new CB Plan within the same year? Someone is telling them that they can't, so I wanted to double-check. Thanks!

If a client wanted to give our firm the authority to sign the Form 5500 on their behalf (I guess signing it under my ID), what do they need to sign to authorize that? Would our firm just be listed as the Plan Administrator on the Form 5500-SF? We've always had the client sign themselves, but for some reason one client doesn't want to do it and would rather have us sign.

Good morning, I hope all is well. Generally when we file Form 5500 we do so on an Accrual Basis. I'm taking over two 401(k) plans, where the previous TPA has been filing the Form 5500 on a Cash Basis. I assume there is no issue, one way or the other? Is it better to continue filing them on a Cash Basis, or should we consider switching over to an accrual basis? Thanks!

We are taking over the Plan right now. I don't think the document specifically says anything, it's just been the administrative policy from what I've been told. I guess the question more is, do the participants have to be given an opportunity to change their coverage or is that policy (assuming it is in the document) is legally allowed?

The question is, someone wants to change to a "better" plan. The old administrators didn't allow it based on anti-selection (if someone was taking the cheapest plan, got sick and moved to the better Plan it obviously had a negative impact). So I guess the question is now if a participant has to be given the opportunity, at least once per year, to elect different coverage under the Plan. Or can they continue with the old administrator's policy

On a self-funded, granfathered plan. Is it required to have an Open Enrollment period to allow participants to upgrade their benefits? Or is that not required?

Just looking for advice on a new Plan setup. We are installing a new Safe Harbor 401(k) Plan with automatic enrollment and automatic increases. Generally, in the past when we've installed a new plan we've always gone with the first day of the Plan being January 1, even if it was signed during the Plan Year. My question is, under the new Secure 2.0 rules is there a reason not to use a 1/1 start date and instead use 11/1 for a short Plan Year? Thank everyone!

One of my clients is of the belief that they can only designate a spouse as the beneficiary of their Cash Balance Plan. I think I know the answer, but I just wanted to make sure. Someone can name a non-spouse their beneficiary, correct? The only caveat being that if they are married, they need to get spousal consent to elect someone else to be their beneficiary. Thanks in advance!

I know it's likely an inexact answer, but I've had people tell me different things. What is the approximate maximum benefit credit you can get in a Cash Balance Plan? Just a ballpark number that you could tell someone when discussing the design. Obviously there are a lot of variables, but just trying to make it easy for someone to understand who doesn't have much knowledge. Thanks!

Sorry for all the questions today! Have 2 participants in similar situations: Participant 1: Was eligible for the Plan, having worked 1,000 hours from 2014-2016 Worked about 250 hours in 2017 Had 0 hours from 2018-2021 Re-hired and worked 900 hours in '22 So it would appear that there was a 5-year break in service. Does that mean that this participant needs to re-establish eligibility, or do they become eligible again from the re-hire date? Participant 2: Was eligible for the Plan, having worked 1,000 hours from 2014-2017 Had 0 hours from 2018-2021 Re-hired and worked '22 This participant only had a 4-year break in service. I believe this means that they do become eligible immediately upon re-hire, since there was no 5-year break. Is that accurate for both participants?

That's what I thought, I just had a moment though that if the money was deferred prior to becoming eligible those deferrals should be excluded. Thanks for the reassurance!

I'm taking over a client and this is the first year I'm operating as the TPA. They do a match, which is funded after the end of the year. Deferrals are allowed immediately Matching Contributions, you become eligible 1st of the month following the completion of 1 year of service. Currently the Plan does not exclude compensation prior to becoming eligible for the Match. It appears that the previous TPA was matching all deferrals made during the year, as long as the participant became eligible at some point during the year (for example, if someone became eligible on 12/1 all of their deferrals would've been matched up to what the formula allows). My question is if that is allowed? Or are they only allowed to match deferrals made after they would've become eligible for the match?

OK, so it's: Up to 5 5-19 20+ That accurate?

Also, I just wanted to clarify: 1st Segment Rate - 0-5 years till retirement 2nd Segment Rate - 6-20 years till retirement 3rd Segment Rate - 21+ years till retirement So if someone is 5 years to retirement, we would use the 1st segment rate. Thanks again!