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Message Boards Digest

February 5, 2020

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

thepensionmaven created a topic in 401(k) Plans

Deferral Deposits for Shareholders

"We have a SHNE 401(k) plan, 2 shareholders, 10 employees. The client is on extension every year and contributes in September for the previous year. The accounts are investment-only with a major carrier. The carrier has returned the elective deferrals of the shareholders telling them they have over-contributed for the year. It has been my understanding that, as long as there is an election by the participant prior to the end of year, he has the ability to make the deferral contribution for the previous year. Of course, this could be incorrect. Does anyone have a cite?"

Number of replies posted  5 replies      Number of times viewed  67 views      Add Reply
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Belgarath created a topic in Cross-Tested Plans

Rate Banding Using Relius

"This really is a question for Relius, but perhaps some of you have dealt with it already. Suppose you have a midpoint EBAR (for HCEs) of 8.740. So any EBARs within 5% above or below this midpoint are considered to have an EBAR of 8.740. This gives you a range of 9.177 to 8.303. In the Relius testing, it uses the LOW of 8.303 for the EBAR in the testing. So a HCE with an unbanded EBAR of 9.1, for example, is in the testing at 8.303. Is this correct? I thought that the testing would have to use use the midpoint of 8.740."

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

Pensions2020 created a topic in 401(k) Plans

SECURE Act Safe Harbor Notice

"We know that the 3% Safe Harbor Annual Notice has been eliminated with the SECURE Act. However we received information from VOYA that says it is still required to give participants a notice if they are a new hire. I haven't read this anywhere else in regards to the SECURE Act. I would assume that only the SPD would need to be distributed?"

Number of replies posted  0 replies      Number of times viewed  37 views      Add Reply

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

Use DB-Type Distribution Forms upon Termination of a Cash Balance Plan?

"Client is in the process of terminating his CB. As far as election forms, I assume the options must be enumerated in similar detail to a straight DB, i,e., can't just give the lump sum option and spousal waiver (as in a DC)."

Number of replies posted  1 reply      Number of times viewed  42 views      Add Reply

Silver70 created a topic in Miscellaneous Kinds of Benefits

Travel Allowance in Lieu of Mileage Reimbursement

"My employer would like to give an employee a travel allowance in lieu of them needing to submit mileage reimbursement forms monthly. I know this is taxable, but would it be considered supplemental wages? If so, it will be separated from their normal wages, so would this be best to do at the Supplemental rate? Would this need to be coded for the W-2's?"

Number of replies posted  1 reply      Number of times viewed  20 views      Add Reply

DDB BN created a topic in 401(k) Plans

Terminated Plan with Stale Checks

"401k PS plan with a pooled profit sharing account. The plan terminated and all distributions were made during 2019. Form 1099-R was issued for all distributions including the 2 participants who did not cash their distribution checks from the pooled account. We are unable to contact these 2 participants after many attempts over the last year. Their balances were $139 and $87 and Form 1099-R was issued indicating a cash distribution. Since the plan is terminated, would you forfeit the accounts, escheat to the state, auto rollover? Does anyone have a procedure that they follow regarding situations like this?"

Number of replies posted  0 replies      Number of times viewed  33 views      Add Reply

John314 created a topic in Defined Benefit Plans, Including Cash Balance

Funding Method Change?

"For single employer plans, we currently have a 'standard' approach to determine the expected return on assets for asset smoothing and actual ROA used for rolling FSCB/PFB forward. This approach involves an assumption that annuity cashflows generally happen at the middle of year, and expenses are paid at the end of the year. We have a couple of plans that we received as part of an acquisition several years ago that reflect actual cashflow timing to the day. We would like to move them to our 'standard' approach to be able to take advantage of processes and tools we have built. Any change would be very minor. Looking for opinions or guidance on whether adjusting the assumed cashflow timing in these calculations amount to a change in funding method. I haven't been able to find anything in Gray Books, regs, revenue notices, etc. that gets to this level of minutia which makes me think we should be fine to make the change without having to file with the IRS for approval."

Number of replies posted  7 replies      Number of times viewed  60 views      Add Reply
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