Message Boards Digest

December 19, 2019

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

rocknrolls2 created a topic in Other Kinds of Welfare Benefit Plans

NJ Short-Term Disability Mandate and Application of Maximum Benefit Limit

"An employer has a number of sites in NJ at which it employs a number of employees. NJ has a temporary disability benefit which is payable for up to the first 26 weeks of short-term disability. An employer can either use the state mandated benefit level and get the administration through the state labor department or purchase insured coverage which provides an equal or better level of benefits than the state mandated benefit. Let's say this employer chose solely the state mandated benefit. The maximum weekly benefit for disabilities beginning and ending between January 1, 2020 and June 30, 2020 is $667 per week (the benefit amount is equal to 2/3 of the average weekly wage. For disabilities beginning and ending between July 1, 2020 and December 31, 2020, the maximum weekly benefit is increased to $881. Thus, let's say an employee who earns $1,321.50 per week goes out on short-term disability, effective June 2, 2020. $1,321.50 x 0.667 = $881. Since the benefit begins in early June of 2020, assuming the employee is disabled for 26 weeks, would he get $667 for up to 26 weeks or would the employee get $667 per week up through June 30, 2020 and $881 per week from July 1, 2020 through early December, 2020?"

Number of replies posted  1 reply      Number of times viewed  18 views      Add Reply

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figure 8 created a topic in Defined Benefit Plans, Including Cash Balance

Amendment to Increase Required Service Requirement for CB Accrual

"A small CB plan (~25 participants) currently requires 1 hour to benefit for accrual. They want to freeze for 2020. Obviously it is too late to issue a 204(h) notice by 12-31-19. Could they get around this by amending the plan to require 1000 hours for 2020, and then just make sure to freeze before 1000 hours are worked in 2020? I do understand they could just freeze ASAP and limit the 2020 accrual to be based on comp through, say, the first week of January (assuming it only takes a few days to confirm with them and get the 204(h) issued). But it'd be easier to just have no accruals for the year."

Number of replies posted  1 reply      Number of times viewed  43 views      Add Reply

Peter Gulia created a topic in Investment Issues (Including Self-Directed)

How Do Retirement Plans Handle Mutual Funds' Proxies?

"Mutual funds' proxy-voting solicitations are much fewer than they were in the 1980s and 1990s. Yet it's still not none. A trust company's typical directed-trustee agreement provides that the trustee votes the trust's securities only as the plan's administrator directs. That leaves the administrator (usually, the employer) with an unwelcome duty. An individual-account plan could require participants (and others with accounts) to direct the fiduciaries' voting. But often this is practical only if the plan's administrator has engaged a recordkeeper or other service provider to deliver the fund's proxy-voting solicitation and collect the participants' (and beneficiaries' and alternate payees') directions. BenefitsLink mavens, will you share your experiences about which recordkeepers offer or disclaim such a service?"

Number of replies posted  0 replies      Number of times viewed  23 views      Add Reply

Nate X created a topic in 401(k) Plans

Increase 401(k) Service Requirement for Eligibility

"We are amending a plan to increase the eligibility from 3 months to a year of service. Employees who never completed a year of service but were previously eligible will only be allowed to continue as a participant if they have a balance in the plan on the amendment effective date. Our document does not restrict us from kicking participants out of the plan due to a plan amendment. Does anyone see an issue with amending the plan to only grandfather those with a balance?"

Number of replies posted  7 replies      Number of times viewed  82 views      Add Reply

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

Controlled Group, Plan Administrator, and SPD

"I have an employer that has 2 companies that are part of a controlled group. In reviewing their plan compliance (while doing something else), I saw that they had one SPD mega wrap that comprised the plans for both companies. Thing is, the 'parent' company sponsors and administers the medical and dental for both companies. The 'child' company sponsored and administers some different benefits than the parent (pre-paid legal, etc.). Correct me if I'm wrong, but shouldn't the plans for the 'child' company be in a different SPD wrap (or standalone SPDs) than the 'parent' mega wrap? I believe the Code says that each administrator/plan sponsor has the requirement to furnish the SPD. If this is just going to the 'child' company's employees, I guess it is only a technical violation. Am I picking nits here?"

Number of replies posted  1 reply      Number of times viewed  25 views      Add Reply

PGWilliams created a topic in 401(k) Plans

Discretionary Deposits in 401(k) to Make Up for Missed Match

"My employer has a 401K that does not have a 'true up' clause. This was a huge surprise to me and I discovered this when they were withholding too much money for my 401K and I hit the federal limit 3 months before the end of the year. I thus was informed that I was no longer eligible for the employer match because I wasn't contributing to the 401K anymore since I'd maxed out the federal limit. Because the larger-than-expected withholding was due to a mistake made by the accounting department, I asked if they could just use the option in the 401K to make a discretionary deposit to provide the missed matching in the form of a bonus, but I was told it was somehow 'illegal' to do that without any explanation. My plan provider says they are within their legal options to provide me, and only me, a bonus to cover the difference and they have many avenues in which to justify it. The plan is a safe harbor plan and I am a HCE. I'm getting conflicting information from everything I've read and my plan provider. What are my options here? It appears my company is dragging their feet to run out the clock so they can claim there is nothing they can do about the problem. My understanding is even as an HCE under a safe harbor plan, they could give me a bonus so long as the total did not exceed 4% of my income. Am I correct here? Any thoughts on this? I'm not an accountant nor am I a benefits specialist and I would love some help understanding all of this."

Number of replies posted  3 replies      Number of times viewed  53 views      Add Reply, Inc.
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