Message Boards Digest

July 9, 2018

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

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Rafael created a topic in Employee Stock Ownership Plans (ESOPs)

Reallocation of Shares During 5-Year Break in Service Period

Can a Plan Administrator reallocate the unvested shares of an employee who has currently left the employ of the company to other participants before a "forfeiture" event (i.e. 5-year break in service or distribution)? The idea is to keep the account "open" and accounted for, but have the shares reallocated. In the event the employee comes back before a forfeiture event, the shares would be reissued/contributed/reallocated to the returning employee. The Volume Submitter Plan this fund is based on states that the Plan Administrator will continue to hold the undistributed, non-vested portion of the account of a participant until a forfeiture event, so I believe that as the plan is written, the stock would need to remain in the account and not be reallocated. However, could the plan be amended to state that only the account will remain "on file" but allow for the stock to be redistributed? Similarly, could the plan be amended to shorten or do away with the 5-year break in service requirement (other than by allowing a distribution)? I am pretty certain that one cannot, because the ERISA Outline Book (2016) makes no mention of it; and IRC Sec. 411 requires a 5-year period; and there are issues of cost basis and the deduction of additional contributions (to make up for growth -- or is growth even accounted for during the break in service period?). My supervising attorney is pretty certain that the Plan can be amended to shorten the time before forfeiture. (I am a summer associate, but I intend to work in the Benefits practice and I have found this forum helpful. I would appreciate some guidance as to additional resources I can look at. Thanks!)
Number of replies posted  2 replies      Number of times viewed  61 views      Add Reply
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luissaha created a topic in Governmental Plans

USERRA Aspects of a Contributory DB Plan

For employees returning from military leave, it's my understanding they have the option to make their employee contributions for time out under USERRA, but are not required to do so. What about the employer's contribution? Does it have to be made if the employee elects not to make his/her contribution?
Number of replies posted  1 reply      Number of times viewed  42 views      Add Reply
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SJones created a topic in 401(k) Plans

5500 Question: How to Contribution for 2017 Made During 2018?

Am filing 5500 and trying to see how to account for a profit sharing contribution for 2017 that was made in January of 2018. Because it was made after year-end, the Dec. 31, 2017 balance doesn't account for it. My business income tax return did account for it, on the 2017 return. Should I add this amount to the 2017 ending balance on the Form 5500, or should I wait to account for it on the 2018 Form 5500?
Number of replies posted  7 replies      Number of times viewed  95 views      Add Reply
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AlbanyConsultant created a topic in 401(k) Plans

Handling Switch from Union to Non-union Status

When we took over this 401(k) plan, union employees were not excluded, but the plan sponsor wanted us to exclude them when we restated the plan document so we did so, on a prospective basis. What happens when a union employee goes non-union, and then switches back to union status? Can he defer from that new union pay because he was grandfathered? Or because he switched to an ineligible class after the amendment date, can he not defer any longer?
Number of replies posted  1 reply      Number of times viewed  25 views      Add Reply, Inc.
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