Message Boards Digest

May 5, 2020

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

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

PBGC Form EA-S -- OK to Use Scanned e-Signature?

"Under the current circumstances, is it acceptable to file a scanned EA-S with e-signature (if we can get signature on the form), rather than original?"

1 reply   |    40 views   |    Add Reply

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austin3515 created a topic in 401(k) Plans

'Actual Knowledge to the Contrary'

"Quoting from the IRS Q&A released on Monday:

Q11. May an administrator rely on an individual's certification that the individual is eligible to receive a coronavirus-related distribution?

A11. The administrator of an eligible retirement plan may rely on an individual's certification that the individual satisfies the conditions to be a qualified individual in determining whether a distribution is a coronavirus-related distribution, unless the administrator has actual knowledge to the contrary. Although an administrator may rely on an individual's certification in making and reporting a distribution, the individual is entitled to treat the distribution as a coronavirus-related distribution for purposes of the individual's federal income tax return only if the individual actually meets the eligibility requirements.

I actually think the standard has now been shifted to the plan administrator 'must know for sure they qualify.' The person either has a personal financial hardship that the Employer would 100% have first-hand knowledge of, or they or their spouse had COVID which an employer presumably would need to know for purposes of notifying co-workers about the need to quarantine, etc. The Employer would presumably at least be obligated to ask WHEN they had COVID for that reason (was it long enough ago that others are at risk? Are you back to work and you should be at home?). Does anyone agree with me?"

15 replies   |    88 views   |    Add Reply

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

Participant Qualified for Loan Suspension -- But What About Now?

"Participant is furloughed due to the coronavirus. Not terminated, but no pay. Participant requests suspension of loan payments. Two weeks later the plan sponsor receives PPP loan proceeds and the participant is back to working, for argument's sake let's say at full hours and pay for at least the eight weeks of the loan. Must the participant begin payments again, or can the suspension continue?"

2 replies   |    42 views   |    Add Reply

Lisa2005 created a topic in 401(k) Plans

Mid-Year QACA Suspension Requires Auto-Enrollment Suspension?

"If a plan suspends their QACA Safe Harbor contribution mid-year, do they also suspend auto enrollment?"

2 replies   |    26 views   |    Add Reply

Peter Gulia created a topic in Operating a TPA or Consulting Firm

May an Employer Claim the CARES Employee-retention Credit If the Only Expenses Are for Not-working Employees' Health Coverage?

"An IRS interpretation states:

'If the Eligible Employer lays off or furloughs its employees and continues the employees' health care coverage, but does not pay the employees any wages for the time they are not working, the employer may not treat any portion of the health plan expenses as qualified wages for purposes of the Employee Retention Credit because no portion of the health plan expenses would be allocable to wages paid to the employees.' That website display includes: 'This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.'

A letter from three members of Congress asks the IRS to interpret differently CARES Act Section 2301.

Imagine your client wants to file its tax return with the position the Congressmen suggest, that the credit applies for health plan expenses even if no other wages is paid. Your client tells you it wants your written opinion to help protect against penalties. Your client doesn't ask for a more-likely-than-not opinion; a substantial-authority opinion would meet the purpose.

Could you, acting within your profession's conduct rules, render the requested opinion? Would you? My queries are not about anything for my law practice. Rather, I'm tooling-up to teach my summer-semester course on Professional Conduct in Tax Practice. (My students include people in law, accounting, and actuarial firms, and some who render tax advice for other businesses.)

The New York Times reported on the letter mentioned above, and I hope the story -- and your ideas -- might illustrate some points about how practitioners manage uncertainty in tax law. I'll be grateful for any ideas you're willing to share."

1 reply   |    27 views   |    Add Reply

QualGeek created a topic in 401(k) Plans

Searching for Copy of a Basic Plan Document

"I am trying to track down a copy of the Basic Plan Document for the Corporate Benefit Administrators Inc. PPA Non-standardized 401(k) Plan that goes with an opinion letter issued on 3/31/2014 with Letter Serial No: J396139a. Corporate Benefits Administrators Inc. is located in St. Cloud, MN. I keep a repository of basic plan documents for this purpose, but we came up empty looking for this one. Is there anyone out there that might have access to this Basic Plan Document and would be willing to share it?"

0 replies   |    18 views   |    Add Reply

5500sorBust created a topic in Form 5500

Stable Value Fund -- Question About Fair Value

"In previous years, the trust company provided audited financials for Stable Value Fund A (as an example) that reflected investments at contract value and investments at fair value, and a ratio could then be determined the plan year end fair value. The audited financials this year, however, indicate that Stable Value Fund A is now wholly invested in Stable Value Fund B, and the investments at contract value and fair value are the same. I believe this means that SVF A invests its assets in units of SVF B. What does this mean for the plan's 5500? Is there just no FMV adjustment now and going forward?"

3 replies   |    28 views   |    Add Reply

403bear created a topic in Cafeteria Plans

Dependent Care FSA -- Incurring Expenses While Children Are Home

"I am aware of the conversation surrounding the issue of mid-year changes to DCFSA elections with changing costs of care related to COVID-19 stay-at-home orders. But is anyone aware of any thinking about employees in the following situation: employee pre-paid childcare costs at beginning of school year, as many care providers require, making a DCFSA election to cover the costs. In the typical case, employee would be eligible for reimbursements as expenses are incurred, that is, when services are rendered as the children go to the care provider. Now, the care provider is closed and the children are at home. No services are being rendered. However, some care providers are not giving refunds, so the childcare costs remain for the employee even though the children are not going to the care provider. Is there any sort of relief for this situation, or is the answer that the employee is stuck with a cost which is now ineligible for DCFSA reimbursements because care is never actually provided?"

0 replies   |    12 views   |    Add Reply

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