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Message Boards Digest

March 31, 2020

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

JustMe created a topic in 401(k) Plans

Dual Eligibility -- New Plan -- Eligibility Requirements Waived at Start-Up

"Client waived eligibility requirements as of the effective date of a new plan. This brings in an HCE hired on the effective date. There are 5 other employees hired after the effective date (all NHCEs) who are subject to the plan's eligibility conditions of 1 YOS and semi-annual entry dates. For coverage purposes we have 100% of HCEs benefiting and no HNCEs benefiting -- so that's a coverage failure, right? Or do we consider the total population and consider 100% of HCEs (HCEs hired on or before effective date + HCEs hired after effective date (here, no HCEs hired after effective date)) benefiting vs. NHCEs benefiting, calcualted as follows: (NHCEs hired on or before effective date)/(NHCEs hired on or before effective date + NHCEs hired after effective date) = NHCE benefiting population ...and that % must be greater than 70% for this waived service condition to pass coverage? I am getting pushback that says one can have such dual eligibility conditions with no need to test for coverage."

6 replies   |    73 views   |    Add Reply
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Becky Schwing created a topic in Cross-Tested Plans

Employees Get Compensation Based on Benefits Under Profit-sharing Plan

"Physician group. They set up contracts with certain employees to base their overall compensation upon the benefits they will receive in their profit sharing plan (which I'm not fond of). If the highest HCE rate is 20% is there any way to give certain NHCEs only a 3% profit sharing contribution based on the employment agreement? OEE does not work, because many are not OEE's. They also don't want to exclude them from the plan altogether. Plan is top-heavy."

1 reply   |    33 views   |    Add Reply

betsy created a topic in 401(k) Plans

Removing Auto-Enrollment and Auto-Escalation from a 401(k) Plan

"I have a plan that is amending to remove the auto-enroll and auto-escalate feature. The service provider wants to take anyone in the plan at the auto-enroll % and make them 0%. That seems odd and makes more work for everybody. Seems the provider should leave everyone 'as is' because this change is for newly eligible participants only. Agree?"

0 replies   |    28 views   |    Add Reply

austin3515 created a topic in 401(k) Plans

Suspend Safe Harbor for HCEs Prospectively and Preserve SH Status?

"I read somewhere along the way that perhaps you could amend a safe harbor plan to eliminate prospectively the SH for the HCEs and preserve the safe harbor status. Is that possible? Anyone looked into that?"

3 replies   |    61 views   |    Add Reply

Cynchbeast created a topic in 401(k) Plans

SH Match Paid to Owners Only, Because No Other Participants Elected to Defer

"We have more than one small plan with SH match where only the owners defer and so only the owners get SH Match. They assure us that HCEs have been given the opportunity to defer. While technically okay, what position are other TPAs taking? Also, for one of these clients, they have a DB, PS and 401(k); of about 8 participants only the 2 owners (H&W) defer. The 401(k) excludes HCEs from SH Match, so effectively this allows only the owners to defer with no ADP testing whatsoever. Again, technically acceptable but... Thoughts? Any adverse experience with IRS running plans this way?"

5 replies   |    60 views   |    Add Reply

JRSP533 created a topic in Distributions and Loans, Other than QDROs

401(k) Withdrawals of Up to $100k per CARES Act -- Required or Discretionary?

"Wondering if all plans administrators and employers will cooperate and increase loan limits and permit withdrawals up to $100k. This isn't discretionary, right? Seems to me a bad decision not to allow these withdrawals but just wondering what the consensus is here and when plans will start to integrate the new rules with all the moving parts."

1 reply   |    60 views   |    Add Reply

chuTzPA created a topic in Operating a TPA or Consulting Firm

SECURE Data Exchange Website

"I'm thinking time we move from using passwords to secure files to a web-based secure file exchange system. Any recommendations for entry level data exchange (for instance, so HR can upload their trust accounting rather than email or fax)? Free?"

2 replies   |    27 views   |    Add Reply

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

CARES Act -- Coronavirus Distribution Allowable from Money Purchase Plan?

"Is a Coronavirus distribution allowable from a MP plan if a participant has not otherwise satisfied the normal distribution requirements? Although 2202(a)(4)(c), if you follow through all the reference trails, might appear to allow it, it seems like it isn't covered under 2202(a)(6)(B), and therefore not allowed? Thoughts? P.S. -- just saw the following from Ilene Ferenczy in yesterday's BenefitsLink Newsletter, which confirms my thoughts. My thanks to Ilene for her write-up! 'The bill permits any 'eligible retirement plan,' including qualified plans, IRAs, 403(b) plans and governmental 457(b) plans, to make a coronavirus-related distribution. The bill makes it clear that the provisions in Code sections 401(k), 403(b), and 457(b) that limit distributions will not be violated by coronavirus-related payments, but provides no such relief for defined benefit or money purchase plans (which cannot make in-service distributions prior to age 59-1/2).' "

0 replies   |    34 views   |    Add Reply

chibenefits created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Health Plan Coverage After Rehire Under CARES Act

"Fully-insured plan covers employees who are 'actively at work' An employer who receives a CARES Act loan has employees on the payroll who are not actively working because of the shut down of non-essential businesses. Would the employer be in technical violation of the medical insurance policy if coverage continues for the employees? Is there anything in the CARES Act about this?"

5 replies   |    48 views   |    Add Reply

rocknrolls2 created a topic in Multiemployer Plans

FFCRA and Multiemployer Welfare Fund's Rights to a Tax Credit

"I looked at the DOL FAQs pertaining to the Coronavirus and employers obligated to contribute to a multiemployer welfare fund. I note that the FAQs, especially Q&As 35 - 37, permit the payment of Emergency Family and Medical Leave benefits and Emergency Paid Sick Leave benefits to be provided 'by other means, provided they are consistent with your bargaining obligations and collective bargaining agreement.' I can foresee that most funds would want to negotiate the bargaining agreement so that they provide the expanded paid leave benefits from the fund and that the existing paid leave provisions may not be sufficiently broad to apply to these expanded paid leave rights. Assuming that's satisfied, would the employer be precluded from providing such paid leave benefits from its own funds and applying for and retaining the IRS payroll tax credits? Would that be consistent with the employer's bargaining obligations and the collective bargaining agreement? Or would there be an obligation? If it would, would the employer be obligated to either have the fund apply for and retain the tax credits or would the employer be obligated to pay the credits obtained over to the funds?"

0 replies   |    10 views   |    Add Reply

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