Message Boards Digest

December 31, 2019

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

khn created a topic in 401(k) Plans

Benchmarking Legal Service Providers

"Everyone is aware that Plan Sponsors have a fiduciary duty to periodically benchmark service providers, such as recordkeepers and advisors, that are paid from their 401(k) Plan. However, if a large company has outside counsel that they use for all corporate activities, but also pay sporadically from their 401(k) Plan when they perform work that can be paid as a qualified expense, do those services have to be formally benchmarked? I think the selection of the outside counsel would be considered a settlor function since the fiduciaries are not involved in the decision. However, since they sometimes are paid from the Plan, does the Committee need to perform some sort of benchmarking on legal services? Any insights are appreciated."

Number of replies posted  1 reply      Number of times viewed  41 views      Add Reply

chibenefits created a topic in 401(k) Plans

Not a Controlled Group But Employer Thought It Was -- Multiple Employers in Single 401(k) Plan

"Client has various levels of ownership in a variety of businesses, and was operating a single 401(k) plan for all of the companies under the assumption that it was a controlled group. Well, SURPRISE!! It is not a controlled group. Now what? I understand that we will have to re-run coverage and non-discrimination testing for the years in question. But, any thoughts on how to handle this going forward? Form a multiple employer plan? The companies are all in the same industry."

Number of replies posted  2 replies      Number of times viewed  50 views      Add Reply

pmacduff created a topic in Distributions and Loans, Other than QDROs

Electronic Filing of 1099-R Forms

"I have a TCC for the IRS FIRE site and file the 8955-SSAs for our clients after they review them. Can I use the same TCC to file the 1099-R forms for the few that we do? I wasn't sure if that same TCC code will work or if I have to prepare a 4419 and get a different TCC to file the 1099-R forms. Still have some small balance forward plans and have been preparing paper forms."

Number of replies posted  2 replies      Number of times viewed  33 views      Add Reply

waid10 created a topic in Other Kinds of Welfare Benefit Plans

Dependent Status of Custodial Stepchild for Purposes of Employer-Provided Life Insurance

"We have an employee who approached us with the following request and situation. She is the stepmother of a child. She and the father are no longer married. She has a court order awarding joint legal custody to the mother, father, and herself (stepmother). Primary physical custody has been awarded to her (stepmother). The employee (stepmother) wants to add the child as a dependent beneficiary to her employer-provided life insurance policy. Our policy language requires that the non-biological parent be a legal guardian or that the step-mother be married to the natural parent. The court order is a custody order and not an appointment of legal guardianship. Any thoughts?"

Number of replies posted  1 reply      Number of times viewed  17 views      Add Reply

BG5150 created a topic in Correction of Plan Defects

Is a 100% Corrective QNEC OK?

"EPCRS calls for a 50% QNEC for failure to implement a participant election. What if the ER wants to make the person 'whole' and contribute 100% of the missed deferral? I'm guessing that would be OK because EPCRS are suggested corrections and the participant will definitely be better off with 100% vs 50%. But what about 415? What year would that apply to? If the 50% QNEC was supposed to be $5,000 and they put in the full $10,000, what year(s) do these QNECs affect? What about ADP testing?"

Number of replies posted  3 replies      Number of times viewed  19 views      Add Reply

Lauren0507 created a topic in Plan Document Amendments

Removing an Extended Payment Option for Surviving Spouses: Anti-Cutback Violation?

"A defined contribution plan currently provides that death benefits must be paid out over 5 years generally, but allows for extended payments to a participant's spouse. The client wants to remove extended payments and apply the 5 year rule to all beneficiaries, including the spouse. The plan does not allow annuity distributions. Are the extended payments protected or may they be eliminated as an optional form of benefit?"

Number of replies posted  1 reply      Number of times viewed  12 views      Add Reply, Inc.
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