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Message Boards Digest

June 26, 2018

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

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Stephanie created a topic in Distributions and Loans, Other than QDROs

Can Profit Sharing Plan Be Amended to Remove In-Service Distributions?

I have a plan that currently allows profit sharing contributions to be paid from the plan after the assets have been allocated for 2 years and requires that they participate for at least 5 years. The client wants to remove this distribution option. Is that a protected benefit? I've read conflicting information.
Number of replies posted  2 replies      Number of times viewed  103 views      Add Reply
 
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Madison71 created a topic in 401(k) Plans

404(a)(5) Notice Needed When Funds in Brokerage Account Are Merged/Liquidated and Then Replaced?

A participant directed plan has a core fund line-up and a brokerage window. There are times where certain funds invested in by the participants in the brokerage window are liquidated/merged and their money in those funds are moved to a replacement fund. I understand that brokerage windows are not DIAs and therefore do not have the same notice requirements. However, a description of the window needs to be provided in an annual 404(a)(5) notice. Is there a requirement to disclose to participants in the brokerage window prior to the replacement, similar to what is required of other replacement funds in the core line-up?
Number of replies posted  0 replies      Number of times viewed  24 views      Add Reply
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pmacduff created a topic in SEP, SARSEP and SIMPLE Plans

SIMPLE Contributions Still Merely 'Receivable' Despite Withholding After Payroll Period Ending on Sunday, Dec. 30?

We all know you can't have a SIMPLE and 401(k) in the same plan year. However it's possible to have a year-end receivable contribution for the SIMPLE that would be made after the PYE, which I believe is OK. But here's this situation: Employees are paid bi-weekly. The period covered is 12/16/2017 -- 12/30/2017; check date 01/07/2018 (I'm aware that was a Sunday!) The payroll company report indicates "Week 1" and will report that as 2018 W-2 wages on a cash basis. SIMPLE withholdings were done. Accountants just discovered this now. (SIMPLE accounts already have been transferred to the new 401(k) accounts for each person.) What's the fix here?
Number of replies posted  1 reply      Number of times viewed  35 views      Add Reply
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ldr created a topic in 401(k) Plans

Creative Solutions for Plan That Will Fail Top Heavy Test in 2018?

Today my skills as a magician are being questioned, as I have failed to pull a rabbit out of hat.... A referral partner has brought us a situation with a client of his who is not our client. The party in question has a 401(k) plan that eliminated its Safe Harbor match in 2012 and has been subject to all testing ever since. This employer is angry because he has been told that for the first time, his plan became Top Heavy for 2018 based on the 12/31/2017 results of the test. He has been told that if he doesn't want to be obligated to make a Top Heavy contribution of any kind, then the Key employees cannot defer in 2018. Deferrals count, and even if a Key only deferred 1% of pay, then the company would owe the non-Key participants 1% of pay as a TH minimum contribution. Of course if any Key deferred 3% or more, then the company would have to make the standard 3% TH minimum contribution. The referral partner is looking to us for some kind of magic trick to allow the Keys to defer whatever they want to defer and somehow not owe a TH minimum contribution. My crystal ball must be cloudy or something because there's nothing I can find to do about 2018. For 2019, they should adopt Safe Harbor provisions again, whether it's the 3% SHNE or the basic SH match. If they aren't willing to do that, then they just have to accept the fact that the Keys can't defer. Am I missing something? The referral partner has been told that a "creative solution" should be found. I can think of all kinds of creativity for failed ADP/ACP tests, cross-tested formulas that don't work out, etc., but I don't know of a "creative" solution to Top Heavy!
Number of replies posted  26 replies      Number of times viewed  177 views      Add Reply
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etg created a topic in 403(b) Plans, Accounts or Annuities

FBRIC Determination

I am having general trouble understanding the third criteria of FBRIC (fully benefit-responsive investment contracts) determination for financial reporting purposes: "The terms of the investment contract require all permitted participant- initiated transactions with the plan to occur at contract value with no conditions, limits, or restrictions."

The contract will say something like:

Transfers from Fixed Account Plus. The Participant may transfer up to 20% of the Accumulation Value allocated to Fixed Account Plus during each Certificate Year.

Is that a limitation that would violate the criteria of fully benefit responsive investment contracts? As an additional question, are there any good CPE's or just websites or videos with in depth explanation of the investment vehicles we see in these plans (GICs, PSAs, etc.)?

Number of replies posted  0 replies      Number of times viewed  31 views      Add Reply
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