Message Boards Digest

October 16, 2018

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

Author's photo

justanotheradmin created a topic in 401(k) Plans

Testing Prevailing Wage and PS Together

Is there a minimum rate that needs to be given as profit sharing?Plan Sponsor (C-Corp) has a 401(k) plan. the only contributions are typically 401(k) deferrals, discretionary match, and prevailing wage. Prevailing wage goes to everyone (stupid I know, but we did not write the doc), and the owner did receive a very, very small (less than 1%) PW. 401(a)(4) passes, but 410(b) coverage does not. [1] I'm not aware of any special rules for PW -- but if there are any that would negate the need for 410(b)? Is average benefits good enough? I'm thinking no, because the allocation method and groups aren't a safe harbor or definitely determinable as in an older style new comp plan. [2] The plan allows PS -- on a pro-rata basis, and if a PS is given according to the document, and 410(b) is combined with PW it does pass. But how much PS should be given? The plan is not top heavy, and 401(a)(4) passes on an allocation rate basis, so no gateway minimum either. Surely someone has encountered this before? It is October 15, so there may be something simple and stupid I'm not thinking about clearly.
Number of replies posted  1 reply      Number of times viewed  30 views      Add Reply

Get Ready for the Next Restatement Cycle of DC Documents!

Sponsored by ASC
Be ready for next restatement cycle of DC documents. Provide your clients with the highest quality documents, drafted by ASC's in-house attorneys. Choose ASC for Cycle 3 & join our satisfied Plan Document Clients. Learn More!
Author's photo

Fiduciary Guidance Counsel created a topic in Investment Issues (Including Self-Directed)

Misleading to Call a Stable-Value Account a 'Fund'?

To provide a retirement plan's participants an investment alternative they perceive as having no risk of investment loss, the plan uses an insurance company's separate account and group annuity contract. The separate account has the one plan as the account's only beneficial owner. The annuity contract provides each quarter-year a credited interest rate determined by amortizing investment gains, losses, and values over a duration that approximates an estimate of an average duration for the investments held for the separate account. The contract has delayed payments or a market-value adjustment if the plan leaves the insurer when the separate account's market value is less than the book value credited to participants.

The plan's communications writer wants to label this participant investment alternative the stable-value fund. Everything else in the plan's menu is a registered-investment-company fund or a bank's collective trust fund. The writer thinks it's less confusing if the communications use the word 'fund' to refer to every investment alternative.

But another person (not me) says it's misleading to call an investment alternative a fund if it's not legally a fund. She wants to use stable-value account. She says 'account' uses language that insurance law uses. (She suggests also using 'investment alternative', which ERISA's 404a-5 rule uses, as the general reference over the investment funds and the stable-value account.)

What do you think? In considering whether to use or avoid the word 'fund', does it matter that amounts credited to a participant's plan account can be more than or less than those that would result from the separate account's recent investment results? Do you think 'fund' is misleading?

Number of replies posted  12 replies      Number of times viewed  73 views      Add Reply
Author's photo

5500sorBust created a topic in Defined Benefit Plans, Including Cash Balance

PBGC Premium Date for a Distress Termination?

In a distress termination, do the same rules apply (below) as a standard termination in regards to the payment of PBGC premiums? "The earlier of ... (i) the date premiums would have been due had the plan not been terminated, or (ii) the date the post-distribution certification (i.e., Form 501) is filed."
Number of replies posted  0 replies      Number of times viewed  37 views      Add Reply
Author's photo

mmiller created a topic in Multiemployer Plans

Union Contract Not Settled -- But Are Employees Now Considered Non-Union for Purpose of Plan Participation?

A company has a group of 80 employees that are part of a large union plan. The contract has not settled and negotiations are not happening at this point. What happens to these 80 employees? Are they now non-union employees and have to be included as not benefiting in the non-union 401(k) plan? Do the employees have to first formally disavow the union in order to be considered non-union?
Number of replies posted  0 replies      Number of times viewed  11 views      Add Reply
Author's photo

MGOAdmin created a topic in Retirement Plans in General

Former Partner Goes 'Of Counsel' -- Separate Cash Balance Plan OK?

A former partner in a law firm is now just a 1099 employee of the law firm as they are of counsel. This former partner maximized his benefit in the cash balance plan of the law firm. Can we set up a new cash balance plan for him using his 1099 wages or are his 1099 related to the law firm somehow and therefore he has already reached him maximum benefit?
Number of replies posted  1 reply      Number of times viewed  33 views      Add Reply, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2018, Inc. All materials contained in this mailing are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe | Privacy Policy