Message Boards Digest

August 16, 2018

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

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oldman63 created a topic in 457 Plans

After-Tax Contributions in a 457(b) Governmental Plan

A 457(b) governmental plan operates under an AXA plan document. There is an unusual provision in the AXA base plan document: "Mandatory Employee Contributions. Notwithstanding section 4.09(a) above, if the Employer has elected Mandatory Employee Contributions in the Adoption Agreement, such contributions shall automatically be deducted from the Employee's Compensation at the rate or dollar amount indicated in the Adoption Agreement and shall be treated as an after-tax Employee Contribution. If so indicated such Mandatory Contribution shall be to the Plan and be treated as a contribution that satisfies section 3121(b)(7)(F) of the Code. It is the Employer's responsibility to determine whether this Plan will meet the requirements to be a social security replacement plan." I have no problem with the Mandatory Employee Contributions, but 457(b) plans cannot accept after-tax contributions, with the exception of Roth contributions. This plan does permit Roth contributions, but the aforementioned provision is very explicit in its reference to after-tax, not Roth contributions. What do you think?
Number of replies posted  0 replies      Number of times viewed  27 views      Add Reply

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

ACA-Compliant Health Insurance for Part-Time Executives

We have three senior executives who are part-time and don't work enough hours to be eligible for the GHP. Two are on Medicare. We'd like to somehow help pay for the health insurance or Medigap coverage they've obtained elsewhere. We realize that direct reimbursement creates an employer payment plan that runs afoul of the ACA. Any ideas? It's my understanding that we could increase their taxable wages to help them pay for these individual insurance policies and/or Medigap coverage, but that we can't require that the funds be used for that purpose. However, we would want to determine the amount of the increase by doing some research on how much this alternative insurance is costing and base the compensation adjustment on our findings. Would that pass muster?
Number of replies posted  4 replies      Number of times viewed  46 views      Add Reply
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BombyxMori created a topic in Qualified Domestic Relations Orders (QDROs)

Division of Child Support Wants Entire Account Balance; Tax Withholding Problem

The Division of Child Support wants essentially the participant's entire account for back child support, and there is not enough left in his account to gross up to account for the 10% voluntary withholding that applies under 3405(b). Under 3405(b), 10% is the default (because this is not rollover eligible) but the participant is permitted by that statute to elect anywhere from 0% to 100% withholding. This does not do much to help the division of child support get the exact amount that they want. It seems this only works if a QDRO may also order the participant to elect no withholding on this distribution so that the plan may pay the full amount "net" of (0%) withholding. But I cannot find any guidance or examples of this being ordered. I figure it must be possible, or else child support QDROs have a sort of intractable issue. Has anyone ever encountered this or seen any guidance on whether a QDRO can order a taxpayer to elect not to withhold taxes?
Number of replies posted  7 replies      Number of times viewed  56 views      Add Reply
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JKW created a topic in 401(k) Plans

Use Schedule H to Report Correction of Missed Deferral Opportunity?

A plan had a missed deferral opportunity for a rehire. The plan made the correction and lost earnings. On the Form 5500 Schedule H, it doesn't seem that I should enter it as a late deposit, because it was not withheld and then not submitted. Agree?
Number of replies posted  1 reply      Number of times viewed  35 views      Add Reply
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LW created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Can I Force Health Plan of My Ex-Husband's Wife to Name Me as Alternate Payee for Benefits for My Kids?

I am divorced and our QMCSO requires my ex/children's father to provide health insurance. He does, through his wife -- she carries our children (her stepchildren) on her employer's health plan. Her employer's health plan is self-insured/self-funded. My ex is a federal employee. Public Law 106-394 requires him to either enroll the children under his FEHB coverage or provide documentation that he has other health coverage for the children, which he does through his wife (the children's stepmother). The children are not enrolled in FEHB or any other plan -- the stepmother's plan is their only health insurance coverage. I would like to be listed as an alternate payee for benefits for my kids on her employer policy. Does ERISA give me that right? I think it does but stepmother's employer says it does not. They say it's because the kids are not her dependents and the QMCSO doesn't require her to carry the children on the plan.
Number of replies posted  0 replies      Number of times viewed  22 views      Add Reply
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J. Bringhurst created a topic in 401(k) Plans

Calculation of Match on Separate Bonus Deferral Election

Client's plan uses W-2 definition of compensation and permits separate deferral election on bonuses. Match is 100% of deferrals up to 3% of compensation and is payroll based; no year-end true-up. If someone elects 10% deferral from regular paycheck but 0% deferral from separate bonus check, is any match calculated with respect to the bonus amount? Example: $10,000 salary check with 12% deferral and $1,000 bonus check with 0% deferral. Deferral is $1,200. Is match based on compensation of $10,000 ($300) or $11,000 ($330)? Is the answer different depending on whether bonus check is paid on same day as salary check or on a different day?
Number of replies posted  5 replies      Number of times viewed  51 views      Add Reply
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coleboy created a topic in SEP, SARSEP and SIMPLE Plans

SIMPLE IRA Program: Matching Contribution After Owners Have Hit Cap on Contributions

Employer has SIMPLE IRA with the 3% match. The 3 owners have maxed out their contributions in July. The match is made each pay period. Should the 3 owners continue getting the 3% match even though their contributions have maxed out? I realize that the match is made on the whole year's compensation but what if their own contributions ended up being less than 3% when their total year's compensation is used? Should the employer wait to true-up at year-end? Or is it like a 401(k) plan, where if the match is made each payroll period, it stops when the contribution stops and no true-up is needed?
Number of replies posted  1 reply      Number of times viewed  18 views      Add Reply, Inc.
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