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Message Boards Digest

December 30, 2019

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

NW529 created a topic in 401(k) Plans

Applying Top Heavy Test to Initial Plan Year

"A plan is top heavy in its initial plan year. If the plan makes a discretionary match to NHCEs, is this employer contribution included in the top heavy ratio for the first year? Or does it have to specifically be a non-elective contribution as specified in the plan document?"

Number of replies posted  3 replies      Number of times viewed  60 views      Add Reply

Jakyasar created a topic in 401(k) Plans

Catch-Up in Excess of 100% of Compensation

"If 2019 W-2 is $30,000, could I do the following: PS contribution $7,500; 401k Deferral $19,500; Catch up $6,000, not limited to 100% of pay? If 2019 W-2 were $20,000 instead, could I do the following: 401k Deferral $19,500; Catch up $6,000, not limited to 100% of pay?"

Number of replies posted  7 replies      Number of times viewed  92 views      Add Reply

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

Who Is Listed as a Participant on Form 5500-C/R?

"This question goes to the definition of 'active participant' in the Form 5500 instructions for a pension plan. My client received a $2 million age 70 415 lump sum in 2012 under the C-limit, but he continues to work and is still accruing service and comp credits, BUT it's unlikely that he will ever be able to accrue additional benefits. His comp is $350k per year. I ran a MASD analysis and he's still about 10% away from ability to accrue. Should he be listed as a participant on the Form Form 5500-C/R? On the SB he would not be listed as a participant because he has no current benefits."

Number of replies posted  4 replies      Number of times viewed  53 views      Add Reply

TPA Bob created a topic in Correction of Plan Defects

Trying to Make a DFVCP Payment But Web Page Won't Accept It

"I have been trying for two days to pay online a $750 payment under delinquent filer and the page does not come up. Anyone else having issues?"

Number of replies posted  0 replies      Number of times viewed  24 views      Add Reply

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

Anti-Cutback Concerns Arising from Mid-Year Reduction in Pension Benefit Formula

"We have a plan where the sponsor wants to change the pension benefit formula from Z x comp x service to 1/2 Z x comp x service. Employee R did not have the 1,000 hours needed to accrue before the amendment and only accrued 500 hours during the year. Since Participant R has not yet met the 1,000 hours needed to accrue a benefit for the current year, it seems that anti-cutback does not apply and the sponsor can reduce his current year accrual. No problem there. However, the amendment will be adopted next week and also reduces the hours required to accrue a current year benefit from 1,000 to 100. Employee R completed 500 hours, so he gets an accrual. But which accrual is he entitled to receive? My interpretation is the reduced accrual under the 1/2 Z formula, because he didn't gain the right to an accrual until the very day that the benefit formula had changed. Because both the formula and hour change occurs at the same time, it's confusing. Better to amend the formula first, then the hours requirement in the following day?"

Number of replies posted  3 replies      Number of times viewed  39 views      Add Reply

JohnLong created a topic in 401(k) Plans

Employer Won't Let Me Contribute As Much As I'd Like to My 401(k)

"When I initially joined my employer's 401K three years ago, I elected to contribute 30% of my pay. This would put me near the maximum dollar amount allowed. My employer will only deduct 20% of my pay for my 401K . I did some research and found that they are allowed to do this. Apparently there is a rule to keep a few employees from contributing way more than the rest of the employees. So I am contributing $15k a year. My age allows me to contribute up to $25k. What can I do to make up for this shortfall? I already max out my IRA contribution."

Number of replies posted  5 replies      Number of times viewed  71 views      Add Reply
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