Message Boards Digest

June 23, 2020

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

Scuba 401 created a topic in 401(k) Plans

Vesting in the Time of Coronavirus

"If an employee is paid during the pandemic but doesn't work, and doesn't work 1000 hours, does the employee get a year of service for vesting? Plan defines a year of service as 1,000 hours."

9 replies   |    80 views   |    Add Reply

Clare created a topic in Other Kinds of Welfare Benefit Plans

QSEHRA and Medicare Premiums

"Business has a premium-only QSEHRA just covering health insurance premiums (not dental, vision premiums etc.). An employee will be going on Medicare soon. While I know Medicare part B, Medicare Advantage (part C), part D, and Medicare Supplemental premiums may be reimbursed under QSEHRAs, is it fair to cover the supplemental/voluntary medicare premiums like Part D or medigap premiums for this employee if we only cover primary health insurance premiums for employees with market place or other health insurance coverage? Would that be considered a difference in how we are treating employees with marketplace coverage vs. an employee on Medicare? Or would that mean we should permit employees who do not use the full amount of the reimbursement amount if they have marketplace coverage (say if they are young with a relatively lower premium) to use the 'extra' amount toward supplemental health insurance too if they so wish? Would it be safer to just reimburse the employee's Part B premiums and/or Medicare Advantage premiums, but not supplemental premiums such as Part D and medigap? Or should we amend the plan document to be more specific as to what premiums are covered and which ones are not?"

0 replies   |    16 views   |    Add Reply

retirementplanning created a topic in 401(k) Plans

Third Party Can Make a Loan to a Solo 401(k) Plan?

"Is it possible for a third party to loan to a solo 401K plan? I have been researching and have seen some references that an arm's-length third party loan to a Solo 401K Plan would represent an exemption from a prohibited transaction as long as the following conditions are met: it must be non-recourse, pay a reasonable interest rate, and be for the benefit of the participants of the plan. Is that right?"

6 replies   |    76 views   |    Add Reply

justatester created a topic in 401(k) Plans

More Prevailing Wage/Davis-Bacon Fun

"Plan has 1 YOS/age 21 for pretax, match and nonelective. Based document (not AA) has language that indicates no age/service requirements to receive DB contribution. So in theory, all employees are eligible for DB contribution. However, to actually receive a contribution you must work a DB job. Here are my questions: [1] For ADP/ACP, do we only include those with 1 YOS/age 21? What if someone received a DB but did not have 1 YOS? [2] Plan is top heavy, of those employed on the last day of the plan year, who receives the Top Heavy allocation? Only those with 1 YOS/age 21? [3] Can the Davis Bacon contribution be used to off set the Top Heavy obligation? The plan has the option to use the DB as a QNEC for ADP or to offset ER contribution. Does this matter?"

1 reply   |    42 views   |    Add Reply

Scott created a topic in Correction of Plan Defects

Forfeitures Did Not Occur; Plan Wants to Terminate

"401(k) plan provides that unvested amounts are forfeited upon the earlier of 5 consecutive breaks in service or the date of distribution or deemed distribution. Company is about to terminate the plan and just discovered that, while forfeitures have been occurring when employees terminated employment and either took a distribution or were deemed to take a distribution (e.g., terminated with no vested interest), no forfeitures have been occurring for individuals who didn't have a distribution or deemed distribution but have incurred 5 consecutive breaks in service. So, these former employees still have unvested amounts credited to their accounts more than 5 years after their termination. The plan provides that forfeitures are to be used to offset employer contributions, or reallocated if forfeitures are greater than the contribution obligation. Any ideas as to what to do? Can the company simply cause the forfeitures to occur now and transfer those amounts to the forfeiture account? Or is a correction required for past years, and if so, what would that look like?"

1 reply   |    39 views   |    Add Reply

Lauren0507 created a topic in 401(k) Plans

Calculating Missed Deferrals per EPCRS

"EPCRS provides the missed deferral opportunity (MDO) is equal to 50% of the employee's missed deferral. The missed deferral is determined by multiplying the ADP of the employee's group (HCE/NHCE) by the employee's compensation. We have a situation in which 2 HCEs participated in the plan 2014-2018 and during each of those years a NHCE was not given the opportunity to defer. Since there is no NHCE group in the plan, how is the missed deferral determined?"

1 reply   |    20 views   |    Add Reply

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