Waiver of PS due to SSI benefits?

[BG5150]

I thought some people discussed this a while ago.  But can a plan allow for people to waive their PS (and SH) contributions due to the resource limit for SSI disability benefits?

[BG5150]

No one?

A solution floated was not doing a waiver, but just excluding people who are at risk of losing SSI benefits from the PS allocation.  ADP test and coverage is fine, so neither test will be affected materially.

[Nate S]

The intent is good, but I wouldn't draft an exclusion based upon disability or age status.  You could establish a compensation band(indexed to the SSDI threshold) for the exclusion, this would be definitely determinable and non-discriminatory.  Any post-year end election/resolution you make should recognize the harm to those participants if the benefits are fully paid; you're not following the document regardless, but maybe this gives reasonable motive. If I recall this issue correctly, there is little you can do, if they are eligible, then they must benefit according to the document.  If the employer is so inclined, maybe a non-compensatory expense reimbursement to replace the ssdi benefits subject to refund.

[Peter Gulia]

Consider that a nonelective contributions subaccount might not be a countable resource regarding a Social Security disability benefit if, following the retirement plan’s provisions, the participant cannot get a distribution from that subaccount.

20 C.F.R. § 416.1201(a) https://www.ecfr.gov/current/title-20/chapter-III/part-416/subpart-L/section-416.1201

For example, if the plan provides no distribution from a nonelective contributions subaccount until the participant’s normal retirement age, a younger participant might lack a countable resource.