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Message Boards Digest

April 28, 2020

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

52626 created a topic in 401(k) Plans

Mid-Year Merger of Safe Harbor Plan into Another Plan

"Employer in a controlled group has three plans. A 403(b) and a 401(a) for the not-for-profit entity. A 401(k) Safe Harbor for the for-profit entity. The for-profit entity will move to a not-for-profit status late in September. The employees in the 401(k) will be enrolled in the 403(b) Plan. They are paid by the employer of the 403(b) plan. Employer wants to merge the 401(k) into the 401(a) plan. [1] Can a 401(k) plan merge mid-year even though it is a Safe Harbor Plan? [2] Does the 401(k) lose its Safe Harbor status for 2020 if the contributions stop as of 9/1? [3] If the merger is not allowed, must the remain 'frozen' for new contributions until it can transfer on 1/1/2021? Would it lose its Safe Harbor status in that event?"

2 replies   |    36 views   |    Add Reply

Jakyasar created a topic in 401(k) Plans

Adding (Not Eliminating) Safe Harbor Mid-Year

"Plan Sponsor wants to add Safe Harbor rather than eliminate it. Existing 401k plan with deferral and discretionary match options. Employer provides 10% of deferral as match. Plan consistently fails ADP for the past 3 years. Sponsor wants to proceed with a safe harbor match, let's say effective 7/1/2020, standard 3% of the first 100% plus 50%..... How will the plan satisfy SH for 2020 and is there any testing that needs to be done? How are the salaries considered for the first part of the year and second part of the year? Assume that the discretionary match is made at the time the deferrals. So for the first 6 months, they made the match which is way less than the actual SH match amount would have been."

4 replies   |    50 views   |    Add Reply

WCC created a topic in 401(k) Plans

Reduce EACA Percentage Effective January 1 for Some Participants But Not All

"Five years ago a 401(k) plan implemented an EACA with an auto-enrollment of 6%. The plan administrator has decided that 6% is too high for future participants, and would like to lower the percentage -- only for new participants -- to 3% effective January 1, 2021 (calendar year plan). The recordkeeper is a large national vendor who is also the document provider. The recordkeeper says that, if they lower the percentage on January 1, 2021, they must lower *all* auto-enrolled participants to 3%. This includes any participant who was auto-enrolled at 6% during the past 5 years. They state that the EACA uniformity rules will not allow new participants to be enrolled at 3% while leaving the existing participants at 6%. Is the recordkeeper correct? If the EACA percentage is decreased, must it be decreased for everyone who was ever auto-enrolled, in order to keep the EACA benefits?"

3 replies   |    47 views   |    Add Reply

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

$100,000 Loan Limit Applies to a DB Plan?

"Does the temporary $100,000 loan limit (under the CARES Act) apply to defined benefit plans?"

1 reply   |    37 views   |    Add Reply

Julia C created a topic in Defined Benefit Plans, Including Cash Balance

What Mortality Table and Interest Rate to Use for a 50% J&S Annuity Under a Money Purchase Plan?

"I have been asked to calculate the 50% J&S for Money Purchase Plan participants. I am not finding any actuarial equivalent provisions in the document. What mortality and interest rate should I use?"

3 replies   |    34 views   |    Add Reply

Belgarath created a topic in Retirement Plans in General

Rollover-Eligible Distributions Allowed from All Government-Sponsored Thrift Saving Plans?

"If a plan allows rollovers from '401(a)' plans, does this include a governmental TSP? I know TSP distributions CAN be rolled to IRAs, qualified plans, etc., but does a TSP specifically need to be listed under the plan types that can be rolled in, or is that covered under the umbrella of 401(a)?"

0 replies   |    12 views   |    Add Reply
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