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Message Boards Digest

February 21, 2018

Here are the most recently added topics on the BenefitsLink Message Boards:

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TPA Bob created a topic in Mergers and Acquisitions

SH Plan Merging Mid-Year with Non-SH Plan

Two unrelated entities are merging into a new entity (a type A or C reorg; accountants are working out the details). They wish to merge their retirement plans. Both are calendar year plans. Plan A is a safe harbor 3% QNEC, Plan B is not safe harbor and has a matching contribution. Their goal is to merge the plans as soon as possible (in mid-year) with the new resulting entity becoming the sponsor of the resulting plan. They also want the merged plan to be a safe harbor (3%) plan. Can the merged plan be treated as "new" and adopt SH provisions? Do we need to wait until 2019, etc.?
Number of replies posted  0 replies      Number of times viewed  22 views      Add Reply
 
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chriskkelly created a topic in 401(k) Plans

Service as a Corporate Director; Start a Solo 401(k) Plan?

A retiree that is interested in starting a solo 401(k) plan in order to defer some consulting income he'll receive over the next 3 to 5 years. He also receives compensation from serving on the boards of directors for two businesses (reported using Form 1099). Can compensation for service as a director support a 401(k) deferral?
Number of replies posted  3 replies      Number of times viewed  64 views      Add Reply
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Mickie Murphy created a topic in 457 Plans

457(b) Employer Contribution Includes Annual Catch-Up?

Hospital has a governmental 457b. They have multiple plans. In one of them, the hospital contributes on the behalf of participants up to the deferral limit. Is the employer limited at the 402(g) limit before catch-up, or instead can it contribute up to the additional annual catch-up limit? Because the employer has contributed $24,000 to a participant for 2017, do we need to return $6,000 so that they are only funding $18,000? My thinking is that the catch-up is available only if the participant actually defers.
Number of replies posted  1 reply      Number of times viewed  36 views      Add Reply
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Loves401(k) created a topic in 401(k) Plans

Apply Forfeiture Provision to Full-Timer Who's Become a Seasonal Worker?

Someone was full-time and has received discretionary non-elective contributions. They're now seasonal and working only 300 hours per year. Plan document calls for a forfeiture after 5 Breaks in Service. Would you forfeit while still employed?
Number of replies posted  4 replies      Number of times viewed  64 views      Add Reply
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cbassociate2017 created a topic in Other Kinds of Welfare Benefit Plans

Level Funded MEWA -- Can It Be Considered Fully Insured?

If a MEWA plan is level funded, can it possibly be considered fully insured? And if it has not existed for a year, does that give us any out from being considered a MEWA? Seller is part of a MEWA and hasn't been in compliance with state insurance laws.
Number of replies posted  1 reply      Number of times viewed  39 views      Add Reply
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JKW created a topic in 401(k) Plans

Missed Deferrals in 2016 and 2017 - Still Fixable?

Due to an error in the client's payroll system, a participant's deferral was not taken for the plan years 2016 or 2017. They received their 3% SHNE, which was the only employer contribution. With the new 25% corrective contributions, can they still do this? I just want to make sure, because it says "the last day of the second plan year after the plan year in which the failure began" (which was 2016). So that would be 12/31/18, correct?
Number of replies posted  1 reply      Number of times viewed  48 views      Add Reply
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thepensionmaven created a topic in 401(k) Plans

Applying Eligibility Requirements for Rehired Employee; No Plan In Effect at Earlier Termination of Employment

While reviewing W-2s for 2017, client informs me one of the employees was employed prior to the effective date of the plan (1/1/16) and was rehired 11/5/16. Because there was no plan prior to his leaving the company, isn't he treated as a new employee and thus,the waiting period would apply?
Number of replies posted  1 reply      Number of times viewed  42 views      Add Reply
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TPA Bob created a topic in 401(k) Plans

Related Organizations Scenario: Affiliated Service Group Here?

As part of a plan merger we are looking at one of the plans subject to the merger. Organization has four owners who each have established their own LLC and elected to be taxed as an S Corp. Each LLC owns 25% of the organization and is receiving guaranteed payments from the Organization. Each S Corp is then paying W-2 compensation to the owner from proceeds received as guaranteed payments. Current arrangement allows each S Corp to have its own retirement plan and be tested separate from the Organizations plan. The TPA firm says based on ownership and related that they should not be considered related organizations for retirement plan purposes. The Organization is in a service business. I am trying to explain the technical reason they should be considered one plan for testing purposes. Any thoughts?
Number of replies posted  1 reply      Number of times viewed  28 views      Add Reply
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Tom Poje created a topic in Distributions and Loans, Other than QDROs

Easing of Restrictions on Hardship Distributions

In a recent publication -- https://www.spencerfane.com/publication/congress-eases-restrictions-hardship-withdrawals/ -- the authors say: [1] Can include earnings from deferrals; [2] Don't have to require the employee to take a loan first; [3] Don't have to suspend deferrals for 6 months; [4] Plan would have to be amended for these provisions, after 12/31/2018 (entirely optional, not required to amend). Will you amend your clients' plans to take advantage of those rules?
Number of replies posted  3 replies      Number of times viewed  43 views      Add Reply
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Belgarath created a topic in 403(b) Plans, Accounts or Annuities

Who Processes a Domestic Relations Order to a Non-ERISA 403(b) Plan?

Plan is set up to be a non-ERISA, deferral-only plan. In order to avoid ERISA status, operational requirements apply in addition to the plan provisions. The Plan Administrator, upon receipt of a domestic relations order, refers it to the Vendor because the Plan Administrator doesn't want to kick the plan into ERISA status by making a determination as to whether the order meets the requirements for a QDRO. Vendor kicks it back and says, "I'm not going to make this determination." A similar situation could occur with hardship withdrawals. How do you folks or your clients handle these situations?
Number of replies posted  7 replies      Number of times viewed  33 views      Add Reply
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