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Message Boards Digest

February 17, 2020

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

sdix401k created a topic in 401(k) Plans

Effect of Forfeitures on Partners' Compensation

"A plan run by a partnership uses forfeitures to fund a QNEC or really any other employer contribution. I assume that the forfeiture amount should not reduce partner compensation up to that amount. Correct? The contribution reduced partner comp in prior years."

Number of replies posted  1 reply      Number of times viewed  37 views      Add Reply
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Dazednconfused created a topic in 401(k) Plans

Former Employee Has Been Rehired -- Plan Has 90-Days Eligibility Requirement

"Eligibility for rehired employee. Plan Eligibility states '90 days of service' (no hour requirement is stated), plan uses actual hours, not elapsed time. Entry date 1st of month following. DoH: 1/28/19. DoT: 4/15/19. Rehired: 11/11/19. I think DoP is rehire date, or 12/1, after they worked the actual 90 days of service was completed. I believe the intent of the employer was 90 days of actual service but I don't see where a day is defined to credit service. I have read other posts regarding situations like this but most say the document uses elapsed time, in this case the doc states actual hours. Would the spanning service apply in this case? So, other than amend the doc to match what the employer intended, some general opinions?"

Number of replies posted  1 reply      Number of times viewed  54 views      Add Reply

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

Impact of an Increase in the 415 Limits for a Frozen Plan

"Sole Prop pension plan, 10% per year of service formula. At 12/31/18, participant has 6 years of participation and 18 years of service. Comp is $160,000 and accrued benefit is $11,000 per month ( eg 60% x $220,000 dollar limit). The plan is frozen 3-15-2019 before accruing 1,000 hours. The 2019 415 limit is increased from $220,000 to $225,000. The question is, what is the benefit used for the FT for 2019? The regs under 430 state that the FT is based on the benefit that has been accrued, earned or otherwise allocated to yrs of service prior to the first day of the plan year. The regs further say that the TNC is based on the benefit that has been accrued, earned or allocated to service from the 1st day of the plan through the val date, which in this case would be the freeze date. The regs are silent with regard to the impact of 415 changes in the dollar limitation. My interpretation is the benefit for the FT is $11,250, e.g. increase in the dollar limit goes to the FT. Any opinions?"

Number of replies posted  1 reply      Number of times viewed  34 views      Add Reply

thepensionmaven created a topic in 401(k) Plans

What's the Correct Entry Date Under These Facts?

"Plan participation entry date is the January 1 or July 1 following completion of age 21 and 12 months of service. Participant was hired on 1/2/2018. Eligibility computation period is 1/2/18 through 1/1/19. Wouldn't the individual enter on 1/1/19 rather than 7/1/19?"

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

austin3515 created a topic in 401(k) Plans

Gotta Be an Affiliated Service Group But Not Sure It Is

"10 Docs own MD Practice, Inc. Those same 10 Docs own 'Surgery Center Holdings, Inc.' which in turn owns 60% of 'The Surgery Center, Inc.' -- The other 40% is owned by an unrelated hospital. Each Doc owns 10% of MD Practice and Surgery Center Holdings. Here is my question. MD Practice Inc. would be the A-Org and The Surgery Center, Inc. would be the FSO. Does the A-Org Satisfy the requirement that it have an ownership interest? I presumed the answer would be yes and set out to find the justification but came up empty-handed. In order for a corporation itself to be treated as owning something that is owned by a shareholder, that shareholder has to own at least 50% of the corporation. So it seems to me MD Practice, Inc. is not treated as owning any part of Surgery Center Holdings, Inc. and tehrefore does not meet the requisite ownership interest. Make no mistake, my question is 'What am I missing?' This has to be an ASG."

Number of replies posted  0 replies      Number of times viewed  31 views      Add Reply

Shane Joy created a topic in Miscellaneous Kinds of Benefits

Education Assistance Program Claims Submitted Before 2019 Year-End

"I have employees who submitted Educational Assistance forms prior to the cut-off date in December for 2019. Due to a clerical issue, it's only being processed in 2020. Can I count this towards the 2019 IRS limit? Would it need to be included in 2020?"

Number of replies posted  0 replies      Number of times viewed  11 views      Add Reply
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