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Message Boards Digest

July 25, 2018

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

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coleboy created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Calculation of PCORI Fees; HRA Terminated Mid-Year

Plan year runs 1/1/17- 12/31/17. HRA is terminated 4/30/17. Must a Form 720 be done? Are fees based on the period 1/1/17 through 4/30/17?
Number of replies posted  0 replies      Number of times viewed  15 views      Add Reply
 
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401_noob created a topic in 401(k) Plans

Top Heavy Plan Has Deferrals, Safe Harbor Match, and Prevailing Wage Contributions: No More Free Pass?

If a Top Heavy Plan has only deferrals, safe harbor matching contributions, and prevailing wage contributions, does it lose its free pass? I know that it gets a pass if only deferrals and the safe-harbor contributions are made, but does the prevailing wage contributions blow that up or is there another exception for those contributions? Now, what happens if the eligibility for prevailing wage is immediate and the other contributions are 21 & 1 YOS? Usually that would blow it up too, but again I don't know if there is an exception for prevailing wage contributions.
Number of replies posted  1 reply      Number of times viewed  39 views      Add Reply
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calexbraska created a topic in 401(k) Plans

Plan Sponsor Has Left a Controlled Group Mid-Year: Consequences for Testing?

We have a plan sponsored by a company that was part of a controlled group. As of 6/28 it was spun off. It's now a stand-alone plan. How do we do testing for 2018? Do we have to do half the year as a controlled group, and half as a stand-alone? Or can we just test based on how everything sits as of 12/31/18?
Number of replies posted  4 replies      Number of times viewed  67 views      Add Reply
Author's photo

AlbanyConsultant created a topic in 401(k) Plans

HCE Started Deferrals Before Eligible to be a Participant; How to Correct?

A calendar year safe harbor plan has a 12-month elapsed time eligibility to defer. The owners hired their daughter in August 2017. She deferred $5K in 2017, in violation of the eligibility requirement. She's deferred more during 2018. We got the 2017 annual data yesterday. Going 'by the book,' what violation occurred 'first'? Her 'personal 415 limit', such that the excess simply needs be distributed to her and will be taxed in the year of distribution? That seems too easy. Also, I'm remembering something about double-taxation under section 402(g).
Number of replies posted  6 replies      Number of times viewed  69 views      Add Reply
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Vlad401k created a topic in Distributions and Loans, Other than QDROs

402(g) Limit Exceeded; How to Correct After April 15?

Let's say a participant contributed over the 402(g) limit in 2017 to the plan and the error wasn't discovered until after April 15. How would this issue be corrected? My understanding is that if the participant exceeded the limit at just one company, that means that the plan is at risk of disqualification and the excess needs to be distributed even if the participant is not terminated. Is that correct? Also, I read that the 10% penalty would apply as well as the 20% Federal tax rate. How would that be coded? Still code "8"?
Number of replies posted  2 replies      Number of times viewed  33 views      Add Reply
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