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Message Boards Digest

February 20, 2020

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

Vested2020 created a topic in 401(k) Plans

2 Weeks' Notice Given After 1,000 Hours But Before Vested

"I have a question about vesting in the final 33% of my employer’s match. To my records, I’ll vest in it after 1,000 hours of service, which I should hit on Friday June 12. The previous 2 years when I vested in the first and second 33%, I saw that amount become vested in my T Rowe account the following pay day, which in this case will be on Friday June 26. If I put in my 2 weeks notice on Wednesday 6/17 (to resign on Wednesday 7/1), which will be after I hit the 1,000 hours of service but before I see it become vested in my account on T Rowe, will it forfeit my unvested amount? Sorry for the complicated timing, but it’s roughly $12,000 that I’m set to vest in, and I don’t want to make a mistake and leave it on the table."

Number of replies posted  4 replies      Number of times viewed  127 views      Add Reply
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ratherbereading created a topic in 401(k) Plans

Calculating How Much the HCEs Can Defer in 2020

"I have a large plan that failed ADP/ACP testing for 2019. They have 11 HCEs and 200 plus NHCEs. They want to know how much the HCEs can put away in 2020 in order to pass the test. Not sure how to figure this out. They do current year testing and are less than 5 years old so they can't switch to prior, correct?"

Number of replies posted  6 replies      Number of times viewed  81 views      Add Reply

DDB BN created a topic in 401(k) Plans

Employee Was Non-Union But Now Is Union Employee

"SHM 401k plan with age 21 and 1 year eligibility, excludes union employees. A non-union employee has been contributing to the SHM non-union plan for several years. During 2019, he switched to a union employee but is continuing to make deferrals to the SHM non-union plan. His Shop Steward told him that 'since he cannot contribute to the union 401k for a year, he can continue his SHM 401k Plan contributions until that time.' Is that correct? Because he already completed the one year of service requirement with the Employer as a non-union employee, shouldn't he be able to enter the union 401k plan on the date he switched?"

Number of replies posted  4 replies      Number of times viewed  50 views      Add Reply

justatester created a topic in 401(k) Plans

Davis Bacon/Prevailing Wage Profit Sharing Contributions -- Must Pass General Nondiscrimination Test?

"Employer make prevailing wage profit sharing contribution. That is the only profit sharing contribution. Is it subject to General Testing? If yes, Gateway if using accrual basis? In this plan's case, there is an HCE who receive the PW contribution. Also, how do you determine who is 'eligible' for the prevailing wage?"

Number of replies posted  5 replies      Number of times viewed  47 views      Add Reply

JustMe created a topic in 457 Plans

Deadline to Establish a Rabbi Trust

"Client recently notified us that they have a 457(b) plan for their executives and they don't know whether they have a Rabbi Trust in place. Their plan was established over 10 years ago. Is there a problem with establishing one for the assets now?"

Number of replies posted  2 replies      Number of times viewed  28 views      Add Reply

austin3515 created a topic in 401(k) Plans

Anyone Recognize This Web Interface?

"Client sent me a screen shot of their prior TPA's data collection module. It seems to be called 'Plan Sponsor Link'. There are several tabs across the top of the screen, including one that says 'Annual Data Collection'. Underneath there are a series of 'Steps' including General Information, Principal information (e.g., owners and officers listings), Family relationships, Other Businesses, etc. Green Checkboxes appear for steps that are complete. It's obviously a program someone built for TPAs. And it looks awesome. Really awesome. Does anyone know the name? I figure some of you are probably using it too."

Number of replies posted  5 replies      Number of times viewed  80 views      Add Reply

toohot4tv created a topic in Defined Benefit Plans, Including Cash Balance

NRA vs. NRD

"There's a lot of information out there about what a permissible Normal Retirement Age is. IRC section 411(a)(8) says a plan cannot have an NRA later than 65 & 5. The plan I'm looking at has an NRD that is the last day of the plan year (December 31) in which 65 & 5 is met. So for someone born on January 1, the NRD would basically almost be age 66 for them.Typically, plans define NRD as the first of the month coincident with the attainment of NRA. This has the same issue as the one noted above, in that someone born on the 2nd day of the month would have a NRD that is almost at age 65-1/12 and someone born on the first day of the month, the NRD would be 65. But this doesn't feel as unfair as the example above, where the NRD is practically at age 66. What restrictions are there on NRD? This might be a dumb question, but I've never had to think much about it since all the plans I've seen before have a NRD that is close to NRA."

Number of replies posted  4 replies      Number of times viewed  62 views      Add Reply

oldman63 created a topic in 403(b) Plans, Accounts or Annuities

Does This Charter School's 403(b) Plan Comply with the 403(b) Regs?

"A charter school 403(b) plan provides that all employees who work 10 or more hours a week are eligible to participate in the plan. Plan also establishes a minimum deferral of $10 per month. My understanding of Universal Availability is that no minimum age or service requirement is allowed for eligibility to make elective deferral contributions. Statutory exclusions for elective deferral contribution eligibility:

  • Employees whose annual contributions will be less than $200
  • Employees eligible to make salary deferral contributions to another 403(b), governmental 457(b), or 401(k) plan sponsored by the same employer
  • Non-resident aliens with no U.S. source income
  • Students performing services described in IRC Section 3121(b)(10)
  • Employees who normally work less than 20 hours a week (lower number of hours can be selected) subject to certain conditions.

Does the charter school 403(b) plan design comply with 403(b) regulations?"

Number of replies posted  0 replies      Number of times viewed  16 views      Add Reply

Becky Schwing created a topic in 401(k) Plans

Pre-Funded Profit Sharing Contribution

"Employer deposited $50k in 2019 for a profit sharing contribution not realizing they had excess DB assets of $52K that came over from their terminated DB plan which would cover the 2019 profit sharing contribution which ended up be $44K to max out the owner. If the CPA does not take a deduction for the $50K deposit can they just carry the $50K over and allocate it in 2020 or is there an issue with funding the plan and not allocating the money? Is there a penalty for that?"

Number of replies posted  3 replies      Number of times viewed  42 views      Add Reply
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