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Message Boards Digest

March 2, 2018

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

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draper1 created a topic in Defined Benefit Plans, Including Cash Balance

Increase RMDs as Accruals Increase?

Suppose you compute the first RMD for a 5% owner on a 4.99% increasing life annuity basis. Does this mean all subsequent year accruals should also be expressed as 4.99% increasing life annuity amounts determined at the end of the respective plan years when the additional accruals are measured?
Number of replies posted  0 replies      Number of times viewed  28 views      Add Reply
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lcollins300 created a topic in 401(k) Plans

Top Heavy Minimum When Key Defers Less Than 3%

Would like to clarify that when a key defers less than 3% (say 1%) then the top heavy minimum would only be 1% -- correct? Employer is not making any other contributions except top heavy minimum.
Number of replies posted  3 replies      Number of times viewed  60 views      Add Reply
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Vlad401k created a topic in 401(k) Plans

Taking Back a Discretionary Matching Contribution?

Company has a discretionary match provision chosen in the plan document. Company chooses to fund the matching contributions pay-date by pay-date. Let's say at the end of the year, the company decides it doesn't want to fund the discretionary match. Can the company take away the matching contribution from the people whose accounts were funded?
Number of replies posted  5 replies      Number of times viewed  65 views      Add Reply
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Lori H created a topic in Form 5500

Large Plan's Audit Not Finished by Extension Deadline

Years ago before e-filing, we had a large plan that filed right at the extension deadline with a "note" from the CPA stating something to the effect that the audit would be filed once completed. The plan sponsor filed the 5500 with the note and at some point after the extension deadline the audit was filed. Is this still an acceptable procedure?
Number of replies posted  7 replies      Number of times viewed  62 views      Add Reply
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jmartinrps created a topic in 401(k) Plans

Safe Harbor Contribution Must Be Made for Employee Terminated in Prior Year?

Company adopted 401k plan w/ Safe Harbor effective 1/1/2018. An employee terminated in late December 2017. Her final paycheck was paid 1/7/2018. Does the company need to make a 3% contribution on this final pay because it was paid in 2018?
Number of replies posted  10 replies      Number of times viewed  76 views      Add Reply
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CLE401kGuy created a topic in 401(k) Plans

ADP/ACP Testing: When Match Is Forfeited vs. When Match Is Refunded

Can someone clarify when match is forfeited vs. when it is refunded, when completing ADP and ACP testing? Scenario: plan matches 25% up to 8%. The ADP and ACP tests fail independently. We've historically completed ADP and ACP tests "simultaneously" and refunded the respective elective and match to HCE's after leveling. The permitted ADP for HCE's though falls below the 8% match cap so we're wondering if some match should be forfeited prior to running ACP testing. So when exactly does match forfeiture come into play when correcting failed ADP and ACP? In reading today, I came across ASPPA material indicating that non-vested match refund should be forfeited and that after both ADP and ACP are 'corrected' if any HCE's match% is greater than that of the NHCE's that portion should be forfeited. We are a Relius office and the refunds calculated by the system supports running both tests "simultaneously" and correcting each independently as opposed to running the ADP test, getting refunds and then determining if any match should be forfeited based on those refunds.
Number of replies posted  3 replies      Number of times viewed  56 views      Add Reply
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BG5150 created a topic in Retirement Plans in General

Eligibility Isn't a Protected Benefit?

Plan has a 3-months of service requirement and month entry dates. Rhoda was hired on February 15 and would enter the plan on 6/1. However, in September that year, the employer amends the plan to require 1 Year of Service (with semi-annual entry dates), and does not specifically exempt those already in the plan. Rhoda is no longer an eligible and active participant in the plan until 7/1 the next year, correct?
Number of replies posted  8 replies      Number of times viewed  75 views      Add Reply
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TPApril created a topic in Plan Document Amendments

To Amend or Not to Amend for Disability Determination

With the upcoming 4/1/18 effective date of new disability claims procedures as related to plans which do not use an unrelated party to determine disability, I'm curious if there is a general push to amend these plans so that disability is determined by an unrelated party such as the Social Security Administration or any licensed physician, or just leave as is and deal with the new, potentially more administratively challenging requirements.
Number of replies posted  0 replies      Number of times viewed  21 views      Add Reply
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EXBen created a topic in Other Kinds of Welfare Benefit Plans

HRAs for HCEs

Client wants to establish an accrual account into which the company would make annual contributions. The purpose would be to reimburse executives for health insurance premiums (or to pay those premiums directly to the insurance company) upon retirement from the company. This account would be funded during employment, but would reimburse the HCI during retirement. In effect, the client wants to provide an executive benefit that would pay for post-retirement health insurance premiums on a tax-free basis. (I know they can do this on a taxable basis through a 457(f) plan). Is this considered a "self-insured" medical reimbursement plan under Code section 105? Or would it be considered a "fully-insured" health plan? It appears that this type of arrangement would be required to meet the discrimination testing under 105(h). But if it's considered fully insured, I'm unclear as to whether discrimination testing is still required. Also, what about the application of the ACA to these types of plans? There were some proposed regs stating that fully insured plans would have to comply with 105(h) discrimination testing; were they finalized?
Number of replies posted  0 replies      Number of times viewed  22 views      Add Reply
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mmustafa created a topic in 401(k) Plans

Fixing Excess Deferrals

An employee deferred more than $18,000 for the 2017 plan year but he isn't at least age 50 by 12/31/2017. How to fix?
Number of replies posted  1 reply      Number of times viewed  26 views      Add Reply
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KevinMc created a topic in 401(k) Plans

Distribution of Safe Harbor Matching Conbtributions

Is safe harbor match money eligible for an age 59-1/2 in-service distribution?
Number of replies posted  2 replies      Number of times viewed  23 views      Add Reply
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