Message Boards Digest

August 24, 2018

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

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ruth_ann69 created a topic in 401(k) Plans

Elected Deferral Not Deducted

Question about employees who are allowed to receive an advance on their earnings. What to do when the employee has over-advanced and will be negative (in the hole)?" This is common in the transportation industry. Should the employer honor the elected deferral or take whatever earnings are available to cover that advance debt? We have a qualified plan that allows both pre- and post-tax deferrals.
Number of replies posted  4 replies      Number of times viewed  61 views      Add Reply

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Mr Bagwell created a topic in 401(k) Plans

Quarterly Statements: Electronic Format Only

A good sized player in the 401k market sent this letter to my co-worker in July 2018. Actual language:

"What is happening? In an effort to add extra security to the handling of your private information, your quarterly statement will be available going forward in electronic format only. Switching to electronic transmission of these statements allows us to become more digitally based and environmentally conscious with our paper usage, and provides quicker access to past statements.

What does this mean to you? You will receive a notification to the email address saved in your profile whenever your new quarterly benefit statement is available online. This notification will contain a link to the login page of your account. Please note that if you were already receiving your statements online, there is no charge, and that electronic delivery does not automatically apply to any other plan information, which you have the right to receive in writing. If you are interested in receiving other plan communications electronically, please follow the instructions found in the e-documents section of your account. There, you can select all of your other paperless preferences.

What actions should you take? We strongly encourage you to visit the plan's website at...., where you can view, print, or download your current and past statements, utilize insightful reports and financial tools in addition to seeing your other important account information. To ensure the statement notification goes to the correct address, please take a moment to log into your account and view the account summary to verify that your preferred email is saved to your profile. If you have any questions or concerns, or would like a paper copy of your quarterly statements, do not hesitate to contact one of your plan's Customer Care Representatives at ... "

Electronic format only? Anyone else doing electronic format only? I'm aware of participants being able to request electronic format only, but a full plan level change to it? It's like a negative election quarterly statement if you want paper. FAB 2006-03A mentions that paper statements can be requested free of charge; this provider is still offering paper, but you're going to have to work to get it. I'm surprised, and yet, not surprised by this action. Figured we would end up there anyway. Any thoughts on this?

Number of replies posted  6 replies      Number of times viewed  70 views      Add Reply
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calexbraska created a topic in 401(k) Plans

Can 401(k) Plan Exclude Employee Rewards from 'Compensation'?

We have a 401(k) plan that defines Compensation as Section 3401 comp, excluding:
  • 414(s) Safe Harbor Exclusions
  • Differential Wage Payments
  • Stock-related compensation
  • Nonqualified deferred compensation payments
We currently have an "award" system, where employees can receive "points" from others for recognition of job well done. They use the points to purchase items from a catalog. [1] Is this included in Compensation for the 401(k), or can it be excluded as a "fringe benefit"? [2] If it is included in Compensation, can we amend the plan to exclude it? [3] If we amend the plan, can that be done mid-year? Do we need to send out notices? Any nondiscrimination testing issues?
Number of replies posted  0 replies      Number of times viewed  27 views      Add Reply
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cpc0506 created a topic in 401(k) Plans

Applying the Service Spanning Rules

Employee A was hired on 12/19/2017 and terminated 1/3/2018. He was subsequently rehired on 6/1/2018. Plan requires 2 months of service for deferrals and 6 months of service for employer contributions with monthly entry dates. No minimum age requirement. Is Employee A eligible for plan on his rehire date of 6/1/18 for deferrals due to the service spanning rule? And therefore eligible for PS as of 7/1/2018?
Number of replies posted  1 reply      Number of times viewed  37 views      Add Reply
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cpc0506 created a topic in 401(k) Plans

Prior Year Testing -- No Match Contributed in Prior Year

Client elected to make a matching contribution for this current plan year. The prior plan year, the client chose not to contribute a match. Plan uses prior year testing. I believe that since the prior year match rate for NHCEs was 0%, all match received by HCEs this year needs to be returned due to a failed ACP test. Do you agree? Note that this is NOT the first year of the plan's existence, nor the first time that the client is contributing a match.
Number of replies posted  4 replies      Number of times viewed  52 views      Add Reply, Inc.
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