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July 27, 2018

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

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pmacduff created a topic in Relius Administration

Calculation of Retirement Age Using Relius System

I'm running administration on plans for 2017. The Relius system is not calculating the Normal and/or early retirement dates when I run eligibility. I've never had this issue before. I doubled checked the Plan Specs with regard to the Retirement information and all seems to be in order. Oddly even the dates for existing employees (who were not previously eligible in the prior year) are "wiping out" to 0 when eligibility is run! The retirement dates ARE in there for those who were and remain participants. Any ideas appreciated!
Number of replies posted  0 replies      Number of times viewed  18 views      Add Reply
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t.haley created a topic in Form 5500

New HRA; No Participants in 2017; Form 5500 Required?

Client instituted retiree HRA effective Jan. 1, 2017. The plan has no participants and no contributions/assets in the plan. Is a Form 5500 required? Do I simply file a Form 5500-SF with zeros for participants, assets, liabilities, etc.?
Number of replies posted  0 replies      Number of times viewed  14 views      Add Reply
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calexbraska created a topic in Correction of Plan Defects

Mistaken Exclusion of Employees Otherwise Eligible to Make Deferrals

We have a group of eligible employees -- basically workers who work for 6 months or less, but aren't expressly excluded by the plan -- who have not been given the opportunity to defer (match not an issue). We are doing a VCP and considering a retroactive amendment to exclude these people (rather than making QNECs). This group has always understood they are excluded, and the employee handbook excludes them, but the plan document does not. Unfortunately, as you might guess, they are all non-HCEs. Any chance the IRS goes for this? Should I even try? If we don't do a retroactive amendment, we will have to do QNECs. This problem potentially dates back to 2005 -- would we have to correct that far back? Or can we just correct back to 2015, based on the 3-year audit/statute of limitations period?
Number of replies posted  1 reply      Number of times viewed  28 views      Add Reply
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Belgarath created a topic in 401(k) Plans

Effect of ADP Failure on Calculation of 415 Excess

Say you have an ADP failure and a 415 failure for a participant. Not catch-up eligible. The ADP refund amount is still considered an "annual addition" for 415 purposes as per 1.415(c)-1(b)(1)(ii). So suppose there is an ADP refund of $5,000, and the 415 excess is determined to be $10,000. Do you have to reduce the participant's account by another $10,000, or only $5,000, since $5,000 has been distributed under the ADP refund?
Number of replies posted  2 replies      Number of times viewed  35 views      Add Reply
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Purplemandinga created a topic in 401(k) Plans

Prevailing Wage Formula Structured as a Match?

Is there anything that would specifically prohibit the formula for a Prevailing Wage QNEC to be structured as a match? For example, would there be any issues in a scenario in which Employer contributes a QNEC to applicable prevailing wage employees equal to 100% of prevailing wage employee's compensation deferred up to 3% of compensation deferred and then contribute 50% of prevailing wage employee's compensation deferred greater than 3% but less than or equal to 5% of compensation deferred.
Number of replies posted  5 replies      Number of times viewed  44 views      Add Reply
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cdavis25 created a topic in 401(k) Plans

Top Heavy Test Applied to a Multiple Employer Plan

A plan is a multiple employer plan. John Doe is a key employee for company A and company B. Both sponsor the Plan. John Doe defers from company A and has a balance of $20,000. He has never received a contribution from company B and has no balance. What do you use for his account balance in the top heavy testing? Use his balance from contributions/earnings from company A for their top heavy test, then use his contributions/earnings from company B for their top heavy test? His balance in company B would be zero, so he would not have a balance in the top heavy test for B. His balance in company A would be $20,000 and he would have a balance in their test.
Number of replies posted  1 reply      Number of times viewed  29 views      Add Reply
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Madison71 created a topic in 401(k) Plans

Adoption Agreement Mistakenly Shows Top Paid Group Election

401(k) Plan document was restated a couple of years ago when moving to a new provider. This is the only plan sponsored by the employer. Top paid group appears to have been inadvertently selected on the adoption agreement. I say that because it was not selected on any of the prior plan documents. The sponsor states that there were supposed to be no changes on the restatement other than a change to the new provider's document. It was not included on the initial draft restatement. In looking at the census data from prior years and this year, it would never have been advisable to select this option. The plan parameters set-up on the system left off top paid group, so it passed testing with flying colors the past couple of years without this selection. When going back to re-test with that option selected, it fails badly each year. The sponsor will amend the plan prior to the end of the plan year to eliminate this option. However, any thoughts on correcting this operational error without having to correct past years based on this inadvertent selection? I know VCP is an option although my understanding is the IRS will not approve if request to retroactively amend to remove top paid based on this reasoning.
Number of replies posted  2 replies      Number of times viewed  46 views      Add Reply
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