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Message Boards Digest

July 30, 2019

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

401(k)athryn created a topic in 401(k) Plans

Any Correction Opportunity for Late Make-up of USERRA-Required Contribution?

A participant was on military leave from October 2018 until March 2019. She received a safe harbor contribution for 2018 based upon actual 2018 pay through October, but now needs to receive the 3% safe harbor on the compensation she would have earned during her period of military service. Likewise, she will need a 3% safe harbor on missed pay for 2019, but this will not be calculated until the end of the year when we calculate the contribution for all employees. USERRA indicates that the make-up 2018 contribution should have been deposited within 90 days after her return to employment or by the time that the other safe harbor contributions were deposited. This make-up contribution is now LATE. Is there a known correction to this error? I did not see anything in EPCRS, but maybe was searching for the wrong terms. Do I need to calculate earnings from the 90 mark after re-employment until now?
Number of replies posted  0 replies      Number of times viewed  25 views      Add Reply
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Terry Frick created a topic in Defined Benefit Plans, Including Cash Balance

Trouble Getting My QDRO Approved

I'm a retired Merchant Seaman since 2015 due to disability. The same year I'm divorced and file for retirement. When the divorce was done it had to be amended to incorporate the QDROs for my Pension and Money Pension accounts. The drafted QDRO for the Pension was approved and signed by the Judge in 2016 and the MPB (Money Purchase Stock Options) was also approved by plans to be a good QDRO and sent for Judge's signature which was not signed due to the defense's questions. First, in Nevada, I thought it wasn't the Judges to rule that we had to be in agreement before he signs? Second, I have been begging for this to be finished for 3 years now and my own attorney has stopped helping. The attorney who drafted the QDROs is not helping either. The Plan Administrator says I must wait until they get the signed QDRO back. But that can take forever. How long do I have to wait? Any information to this problem would be much appreciated. Also, in the QDRO it states she will receive gains until the QDRO is segregated and dispersed. Is that the reason for the defense to hold it this long?
Number of replies posted  0 replies      Number of times viewed  36 views      Add Reply

Belgarath created a topic in Plan Terminations

Avoiding a Top Heavy Minimum Contribution for Year of 401(k) Plan Termination

There are discussions of this subject, but didn't find one QUITE on point for this specific circumstance. 401(k) plan, key person has deferred more than 3%. Not a safe harbor, but has a discretionary matching contribution. Business is ceasing operations, probably in September. Plan will be terminated. The employer does NOT want to provide a top heavy minimum. No employer match or profit sharing contribution will be made for 2019. Seems like if they make the plan termination date as 12/31/2019 rather than in September as they originally proposed, but all employees are gone as of, say, September 15, then they fail the last day requirement and no top heavy is due. Is it that simple, or am I missing the boat? (It would be different if they made the plan termination date, say, September 15th and that is the day all employees terminated employment.)
Number of replies posted  2 replies      Number of times viewed  27 views      Add Reply

Belgarath created a topic in Cafeteria Plans

Flexible Benefits Plan

I haven't seen a plan document (if there is one) but here is the election form. Each employee that is given this form is allotted (x dollars). This is money the employer gives them. The employer does not deduct anything from their paychecks. The bookkeeper writes checks to employees directly after they submit supporting documents stating that they used the money for things such as medical bills and/or dependent care costs. I haven't seen such an arrangement before, as I don't deal with welfare benefit plans. Is this common? Given that they have a choice between the other benefits and cash to be deposited to an IRA, are the health/welfare benefits still non-taxable? If this is actually under a cafeteria plan, is there a problem with the IRA arrangement -- since the money isn't actually put into the "plan" then this seems ok? I'm very confused by this arrangement...

Flex Benefits Enrollment Options (Year)

If you would like to participate in the Flex Benefits Program, please read the following and fill in the information on the included form.

For the contract year 2018-2019, (employer) is offering the following Flex Benefits to each staff member who is currently working 30 hours or more:

For the (x) contract year, the (employer) Flex Benefits amount is (x). This is to be prorated from date of hire. These funds may be used in the following ways:

  1. All or some of the funds can be allocated to purchase health insurance provided by the (employer).
  2. All or some of the funds can be allocated towards medical expenses not covered by other health insurance plans. Please note: Medical benefits may be paid to a designated beneficiary (other than the employee's spouse or dependents) but this will then be considered taxable income and must be reported.
  3. All or some of the funds can be allocated for Dependent Care.
  4. All or some of the funds can be allocated for an IRA set up through the (employer). Please note: You may allocate funds not used for the above to be put into an IRA at the end of the year. However, this will be considered taxable income and must be reported.

    In addition, you may contribute your own PRE-TAX dollars into option number 5.

    By signing this, you acknowledge that you understand that you are committed to the enrollment choices on this form for the entire contract year of (X).

Flex Benefits for Year (X)

Name:___________________________

Social Security #:___________________
Flex Benefit PortionEmployee Portion
Health Insurance$_________________
Medical Expenses$_________________
Dependent Care$_________________
IRA$_________________

IRA: I wish to allocate any unused portion of #1, 2 or 3 to an IRA, understanding that this will become taxable income and must be reported. _______Yes   _____No

AUTHORIZATION: I certify the above information to be true to the best of my knowledge and that the children for whom I will be claiming dependent or child care expenses either reside with me in a parent-child relationship or are legally dependent on me for their support. I further understand that the Flex Benefit amount will be in effect for the entire plan year and cannot be revoked except as permitted by federal law.

Signature:___________________________

Date:________________

Number of replies posted  5 replies      Number of times viewed  38 views      Add Reply

BG5150 created a topic in Retirement Plans in General

Money Withheld for a Now-Closed SIMPLE IRA

Company had SIMPLE IRAs for their employees in 2017 and 2018. There were deferrals (one in 2017 and one in 2018) that were withheld but not sent to the IRAs. The IRAs are closed (they still exist, but no new money is being contributed). Company has 401(k) plan for 2019. Most of the people still have the IRAs because they're waiting to roll the money into the 401(k) plan. One person cashed his out. These are small amounts -- less than $50. I'm guessing they need to deposit the amounts to the existing IRAs. What about the one who closed his?
Number of replies posted  0 replies      Number of times viewed  16 views      Add Reply

dmb created a topic in Cross-Tested Plans

Minimum Allocation in Money Purchase Plan?

We have a money purchase plan with two allocation groups. It satisfies the minimum allocation gateway. There is a non-standard definition of compensation which leads to my question which is, can a money purchase plan include a minimum allocation? For example, if the two allocations for the two groups are 7.5% of eligible comp and 5% of eligible comp, can the plan also provide that regardless of above no participant shall receive less than 2.5% of total comp?
Number of replies posted  3 replies      Number of times viewed  26 views      Add Reply
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