Message Boards Digest

February 26, 2020

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

Pammie57 created a topic in 401(k) Plans

Late Deferrals Due to Snag Arising During Blackout Period

"I am just wondering if any of you have had a plan affected by a blackout period where deferrals were submitted late because there was an issue with the new provider accepting them? Did you calculate lost earnings on the late deferrals?"

Number of replies posted  5 replies      Number of times viewed  61 views      Add Reply

Cynchbeast created a topic in Retirement Plans in General

Name of the Plan on Form SS-4 Doesn't Agree with Name on Plan Document

"SS-4 for a plan listed plan name as 'ABC Defined Benefit Pension Plan and Trust'. Adoption Agreement mistakenly showed plan name as 'ABC Defined Benefit Plan and Trust'.' Plan is a couple years old and our actuary caught the mistake. What is the best way to resolve this? Would it be appropriate to do a retroactive amendment to correct the original documents?"

Number of replies posted  6 replies      Number of times viewed  54 views      Add Reply

DJL created a topic in Retirement Plans in General

Continued Existence of Named Trust as Beneficiary

"I work for a third-party administration firm. Has anyone had experience with determining whether a trust is in existence when a death benefit becomes payable from a 401(k) plan? FACTS: In 1989, a participant named his parents" Family Trust as the primary beneficiary of his 401(k) plan account (and a non-family member as the contingent beneficiary). The participant was the sole beneficiary of the Family Trust upon the death of the last of his parents. In 2016, the participant set up his own Revocable Trust, but did not change his 401(k) plan beneficiary to be his Revocable Trust. The participant passed away in 2019. The trustee of the Revocable Trust has filed claim for the 401(k) plan death benefit. Since this is not the trust named as beneficiary, the Plan asked for a copy of the Family Trust. The trustee has provided a copy of the Family Trust, but stated that the Family Trust no longer exists. There is no language in the trust documents connecting one to the other. The Plan has denied the claim, on the basis that the Family Trust no longer exists.

The Plan has now received a letter from the attorney representing the Revocable Trust, who has argued that the Family Trust still exists. The attorney has cited 26 CFR 1.641(b)-3 as authority that the trust continues. This regulation deals with termination of trusts in relation to federal income taxes. There is no reference to California trust law or any case law. The Plan is now faced with determining whether the Family Trust still exists for purposes of paying the death benefit. I welcome any thoughts you care to share."

Number of replies posted  3 replies      Number of times viewed  56 views      Add Reply

PensionPro created a topic in 401(k) Plans

One-to-One Correction - 401(k) Plan Uses Prior Year Method Otherwise Excludible

"Plan has consistently been using the prior year method testing otherwise excludible employees separately. In 2017 plan failed testing but did not do refunds in time so plan can not permissively disaggregate otherwise excludible employees to calculate the refund/contribution under the one-to-one correction. Is the one-to-one simply a correction mechanism, or does it cause the plan to have a change in coverage for testing purposes because 2016 and 2018 are being tested on an otherwise excludible basis but not 2017?"

Number of replies posted  0 replies      Number of times viewed  30 views      Add Reply

Gilmore created a topic in 401(k) Plans

Two-Tiered Matching Contribution Formula Gives Rise to Effective Availalbility Issue?

"Client would like a two tiered match formula in which up to the first 4% of compensation deferred is matched at 0%. Second tier 4 to 6% of comp matched at 50%. Since each participant is matched the same at each level of deferral, is this an effective availability issue? And assuming the match is communicated to all participants, an acceptable match?"

Number of replies posted  2 replies      Number of times viewed  47 views      Add Reply

Gilmore created a topic in 401(k) Plans

Matching Contribution Only Considers Base Compensation

"Client would like to allow employees to defer from all compensation, bonuses, etc. Client wants to match on only base compensation, however. The match is 100% of the first 3% of compensation deferred. Since the match would be capped at 3% of base compensation, I'm assuming I have testing issues? If the allocation compensation passes the compensation ratio test, am I good at that point? Or do I need to test the match rates for BRF?"

Number of replies posted  3 replies      Number of times viewed  44 views      Add Reply

5500sorBust created a topic in Form 5500

How to Report Foreign Securities on Schedule H of Form 5500?

"Are there any guidelines for reporting foreign securities assets on Form 5500, Schedule H? For example, could foreign stocks be reported on line 1c(4)(B) - common stock?"

Number of replies posted  0 replies      Number of times viewed  9 views      Add Reply

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

List of Current Litigation on Issue of Actuarial Equivalence?

"Is anyone aware of a source for a complete (and current) list of the various lawsuits in the recent high-profile actuarial equivalence litigation? I believe there have now been 11 different cases filed, but want to confirm that I'm not missing any."

Number of replies posted  2 replies      Number of times viewed  28 views      Add Reply, Inc.
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