Message Boards Digest

March 16, 2020

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

Ken_BenefitScape created a topic in Form 5500

Form 5500 Software -- Pros and Cons

"I'm trying to get a handle on whether to use the DOL EFAST2 web-based filing system in its native format or use one of the many integrations available on their website. I would like to hear from any BenAdmin familiar users to see which products they prefer. Our staff is very knowledgeable in the employee benefit and ERISA arena but I would like them to have access to a tool that could facilitate and guide their work."

6 replies   |    188 views   |    Add Reply

JustMe created a topic in 401(k) Plans

Employer Makes 'Matching' 401(k) Contributions When Participant Makes Student Loan Payments

"If an employer wants to implement a setup similar to Abbott Labs (2% loan repayment, 5% 'match' to 401(k) plan) and the plan has individual rate groups for a profit sharing allocation, is there a need to amend the plan to allow for this setup? Or is the contract for the 'match' for student loan repayments outside of the 401(k) plan and the 'match' is really just a discretionary contribution to the PS plan by the employer?"

2 replies   |    38 views   |    Add Reply

Car23 created a topic in Retirement Plans in General

When to Credit Year of Service If Gap Between End of Payroll Period and Payment Date Straddles Two Tax Years?

"Employer's payroll period ended 12/28/19 but payment not made until 1/5/20 in accordance with regular payroll procedures. Employee hits 1,000 hours during payroll period ending 12/28/19. Does the employer have to credit the time in 2019 or, because it was not paid until 2020, can the employer treat the hours for pay period ending on 12/28 as performed in 2020 based on the payment date? Labor Reg. 2530.200b-2(c)(4) and Example 5 do not technically apply since the payroll period does not straddle the tax years. Instead, it is the gap between end of the payroll period and payment date that straddles the tax years. Is there any basis for extending the concept to the situation described?"

3 replies   |    45 views   |    Add Reply

AJC created a topic in Retirement Plans in General

Determining Plan Eligibility with Multiple Periods of Service

"Have a calendar year plan. An employee after age 21 started working 01/01/2018; worked 1,000 hours; and terminated service 11/01/2018. The employee was rehired 08/01/2019, worked 501 hours during 2019, and remains employed on 12/31/2019. I think the earliest possible date this employee will be eligible to participate is 01/01/2021, which will be based on their 2020 employment and hours of service. Am I thinking correctly?

The plan has the following language:

You will become eligible to make Salary Deferral Contributions on the a) first day of the first month of the Plan Year or b) first day of the seventh month of the Plan Year, coincident with or next following the date you attain age 21 and you complete one (1) Year of Eligibility Service, provided that you are an Eligible Employee on that date.
Computing Service
With respect to eligibility to make Salary Deferral Contributions, 'Year of Eligibility Service' means an Eligibility Computation Period during which you complete at least 1,000 hours of service. 'Eligibility Computation Period' means a 12-consecutive month period beginning with your first day of employment. Any succeeding Eligibility Computation Period will then switch to the Plan Year, beginning with the Plan Year that includes your first anniversary of employment. You will generally earn an hour of service for each hour you are paid for the performance of duties for the Employer (however, numerous exceptions and special rules apply). All eligibility service with the Employer is taken into account.
2 replies   |    160 views   |    Add Reply

Miquiztli created a topic in 401(k) Plans

My 'Employee Status' Is 'Terminated -- Awaiting Payment'

"I recently quit my job of 24 years. It took them two weeks to change my 'Employee Status', which, for a whole two weeks after the day I clocked out for the last time, said 'Employee Status: Active.' They finally changed it or maybe it finally went through, but now it says 'Employee Status: Terminated - awaiting payment.' What does 'awaiting payment' mean? I don't have a loan balance and they did deduct my medical payments as usual from my final check."

3 replies   |    57 views   |    Add Reply

newemployee401k created a topic in 401(k) Plans

My Employer Failed to Contribute the 401(k) Deferrals I Had Elected to Make

"I started working in May 2019. First job. Huge multinational firm. I elected to contribute 20% of my pre-tax income into my 401k to hit the $~19k max employee contribution limit. My employer matches up to 6% for the first $100k of my salary. In November 2019, I noticed that 401k deductions hadn't happened properly at all in any payroll -- meaning 20% was not taken from my paycheck (bi-weekly) and hence no deposit to 401k. I was paid my full base salary exclunding medical premium and HSA deductions. I escalated my concern to HR, which took 3 months to investigate. They got back to me in February 2020 after constant follow up. Meanwhile the 2019 tax year was over and I got my Form W-2 showing no 401k deductions.

HR told me that the underlying root cause was identified and that the mistake was not on my side. They said they will provide the full 6% match into my 401k as if deductions had happened properly, but that they cannot deduct any 2019 employee contributions for me retrospectively. Instead they would pay me a penalty of 2% of my base pay as compensation (into my normal paycheck and not 401k) in 2020 which they said is 'the standard IRS guidance' to fix the issue. My 2020 deductions would happen as normal.

My problem: I dont want the 2% fee to be paid to me (which would be taxed). Instead I want them to fix the issue by deducting from my paycheck and depositing into my 401k what should have been done properly in 2019. I am willing to cover that from my 2020 salary (for both 2019 and 2020 deductions) or I'm willing to transfer the amount back to the employer (I had given HR these options as well). Meanwhile I have filed for a tax filing extension until October 2020 to get some runway to deal with this problem.

Is it true that a 2% penalty is the standard IRS guidance? Or is there a way to get them to put in the proper amount into my 401k for 2019 contributions?

If there are rules to get HR to do the right thing, any idea of the impact on my tax filing will be welcome."

4 replies   |    184 views   |    Add Reply

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

Spouse Wants to Disclaim Receipt of Death Benefit

"Surviving spouse is receiving a small QJSA benefit from a defined benefit plan. She is elderly and needs to go into a nursing home, but the pension pushes her past an income limitation-- making the cost of the nursing home very expensive. She would like to disclaim the retirement benefits, but we don't see an avenue to allow for this to occur because her husband died longer than 9 months ago and she has been receiving monthly benefits since his death. Regarding an assignment of Interest, she could assign her interest under 1.401(a)-13(e) but the monthly benefit would still be considered taxable income. And regarding a cash-out, the plan does not allow for any type of lump-sum unless present value is less than $1,000. Current funding status would prohibit large lump-sum benefit payments anyway. Any ideas would be appreciated."

2 replies   |    158 views   |    Add Reply

Kathy Bittle created a topic in 401(k) Plans

ADP Refund Is Required But Account Is Already Mostly Distributed

"I have a client that has failed the ADP test and will need to take a refund. However, last April he took a hardship distribution which wiped out most of his deferral account and now he doesn't have enough money to process his refund. What course of action would we need to take? Technically the deferrals are no longer in his account and he did not roll it over, so basically we have the same result except for the distribution code and early withdrawal penalty. He was not yet age 59-1/2 when he took his hardship."

1 reply   |    54 views   |    Add Reply

k man created a topic in Defined Benefit Plans, Including Cash Balance

DB Restatement Deadline Possibly Pushed Back?

"Is there any chance this deadline is going to get pushed back in light of the coronavirus?"

0 replies   |    31 views   |    Add Reply

Here are the most recently posted jobs on, a service of BenefitsLink:

View job as Relationship Manager Relationship Manager  View details

Benefit Plans Plus, LLC [BPP]
Saint Louis MO / Edwardsville IL / Henderson KY

View job as Retirement Plans Specialist Retirement Plans Specialist  View details

Benefit Plans Plus, LLC [BPP]

►View More Jobs

►Post a Job

►Get Instant Job Alerts, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2020, Inc. All materials contained in this mailing are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe | Privacy Policy