karl Posted October 4, 2016 Posted October 4, 2016 We have a company that offers a wellness incentive, which is a dollar amount based on years of service to be used towards medical premiums or reimburse certain wellness items such as gym memberships. This incentive is reported on W-2 and their plan document states to use W-2 income and does not exclude any type of compensation. They would like to amend document to exclude this wellness incentive from compensation. Could this type of amendment be done retroactively to beginning of current or prior year? (This is not a Safe Harbor plan).
Lou S. Posted October 4, 2016 Posted October 4, 2016 I think it may depend. If folks have already earned a right to an allocation or accrual based on the higher definition of pay then amending it would be likely a prohibited cutback. If no one has earned a right to the allocation yet (such as a DC plan with a last day requirement) then you are probably OK to retro amend the definition of compensation.
karl Posted October 5, 2016 Author Posted October 5, 2016 In this situation I think it could be considered a cutback. We're suggesting to not make any changes retroactive. Thank you for your help!
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