Message Boards Digest

June 24, 2019

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

Jeff Kirtner created a topic in Correction of Plan Defects

EPCRS Fix If Automatic Contribution Arrangement Is Terminated?

Plan document included an auto-enrollment feature of 2% starting 7/1/2018, no matching contributions. Employer never implemented the auto-enrollment feature. Now the employer intends to terminate the auto-enrollment feature effective 7/1/2019. Under EPCRS, the employer can fix the errors under the special safe harbor correction method (no QNEC required, but correct deferrals must begin). Are the "correct deferrals" the amount that is in effect at the time of correction (now 0% because the ACA was eliminated), or 2% (because that's the deferral that would have been in effect at time of correction if the error had not occurred)?
Number of replies posted  0 replies      Number of times viewed  24 views      Add Reply

mming created a topic in Retirement Plans in General

When Is a Business Entity Formally Recognized for Plan Purposes?

An employer that is fully owned by one individual sponsors a qualified plan in which several employees participate. This individual has also set up a separate shell LLC (in which she also has 100% ownership) that does not perform any business transactions, and for which no business tax returns are ever filed. She does not receive any income from the shell company, and it does not have any other employees. I'm trying to determine whether I should indicate that the plan sponsor is a member of a controlled group on the 5500-SF. Is just signing a document establishing the shell company the only thing needed for it to be considered a controlled group member? Or would it also need to first have an EIN issued?
Number of replies posted  1 reply      Number of times viewed  44 views      Add Reply

403BWilder created a topic in 403(b) Plans, Accounts or Annuities

Annual Notice Required to Satisfy Universal Availability Requirement?

The 403(b) regulations require 403(b) plan sponsors to provide an effective opportunity to eligible employees to make 403(b) deferrals to the plan. According to 1.403(b)-5(b)(2), this requirement is satisfied by providing a notice to the employees at least once a year that tells the employees that the 403(b) plan is available, and also tells them how to make or change the amount of their 403(b) deferral election. [1] What does this annual universal availability notice referenced in the regulations look like? Is there a published or sample form? [2] If there isn't a published or sample form, what other types of notices and documents satisfy the annual universal availability notice requirement? [3] When is the annual universal availability notice distributed? Does it have to be no later than 12 months after the last notice, or literally no less than once per plan year? (For example, is a notice provided in January 2018 followed by a notice provided in July 2019 OK?) [4] Are all eligible employees supposed to get the annual universal availability notice every year, regardless of whether they are actively deferring to the plan or have previously declined to defer? If yes, what if they're currently in the midst of a deferral suspension following a pre-7/1/2019 hardship distribution? Or, what if they've just exited a deferral suspension due to a pre-7/1/2019 hardship? [5] Do plan sponsors need to get employees' signatures or otherwise record the date that they sent the notices to eligible employees and the date the eligible employees received the notices in order to document that they have satisfied the universal availability requirement?
Number of replies posted  0 replies      Number of times viewed  13 views      Add Reply

AdKu created a topic in Defined Benefit Plans, Including Cash Balance

QPSA Notices in Operation

In IRS 417(c) -- QPSA -- Spousal Benefit it is stated: "A qualified plan, like a defined benefit plan, money purchase plan or target benefit plan, must provide a QPSA to all married participants unless the participant and spouse consent in writing to waive the QPSA." Further, "it must give a participant a QPSA notice during the period beginning when he or she is age 32 and ending with the close of the plan year before the participant is age 35,or within one year from when an employee becomes a plan participant if he or she is hired after age 35." As a practical matter, must practitioners provide the QPSA notice for all affected participants of all the DB/Money Purchase/Target Benefit Plans within the applicable QPSA election period as stated in the Code? Does it mean the surviving spouse will receive a lump sum instead of annuity if a participant/spouse consented to waive QPSA in writing and the two were married more than 1 year when the annuitant/the participant died before retirement?
Number of replies posted  1 reply      Number of times viewed  29 views      Add Reply

mjf06241972 created a topic in Form 5500

Using Code 3B on Form 5500

"Code 3b -- Use this code if the plan covered self-employed individuals in the return year." Does this mean if someone was a Schedule C or K-1 employee (not W-2) in the plan?
Number of replies posted  2 replies      Number of times viewed  28 views      Add Reply

in-house ERISA created a topic in Qualified Domestic Relations Orders (QDROs)

Alternate Payee Is a Participant

If an alternate payee is also a participant in the 401(k) plan that is subject to a QDRO (i.e., the divorcing couple work for the same employer and both participate in the same plan), must the plan create a separate account for the alternate payee, or may the plan transfer the QDRO award into the alternate payee's existing account under the plan?
Number of replies posted  3 replies      Number of times viewed  39 views      Add Reply, Inc.
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