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Message Boards Digest

July 1, 2020

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

Gilmore created a topic in Form 5500

Electronic Signatures OK on Form 5500 (Rather than Handwritten)?

"Is the DOL accepting electronic signatures on the Form 5500, such as an Adobe signature? Or are hand signatures the only signature method?"

6 replies   |    103 views   |    Add Reply
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NJ_BenAdmin created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Employee's Mistake During Open Enrollment 7 Months Ago; OK to Allow 'Correction' of Coverage Election Now?

"An employee just notified us that he forgot to include a dependent child on his dental coverage when electing the plan during open enrollment in November 2019 (the child was selected to be covered under the medical and vision plans). We are wondering if there would be any administrative type reason to allow the child to be covered, retroactive to 1/1/2020, or if doing so would violate Section 125/ERISA rules? There's been no qualified life event or status change to permit a mid-year enrollment. This is purely an issue where the employee just realized their mistake 7 months into the plan year."

0 replies   |    24 views   |    Add Reply

D.J. Simonetti created a topic in Distributions and Loans, Other than QDROs

COVID Distributions -- Designations and Withholding

"As I understand the CARES Act rules re coronavirus-related distributions (CRDs), a distribution that otherwise qualifies for treatment as a CRD can 'attain' that status either by [1] the employer designating it as such or [2] the participant treating it as such on his tax return. So my questions are: [1] How does the employer designate a distribution as a CRD? [2] Can the employer designate a distribution as a CRD without amending the plan, for example where the employer intends that only distributions on employment termination will be designated as CRDs? [3] If an employer does not designate an otherwise qualified distribution as a CRD, does the employer have to withhold 20% even if the participant treats it as such on his tax return?"

1 reply   |    34 views   |    Add Reply

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

When Is the First RMD Due, and What's the Starting Benefit to Use?

"I haven't had a noncalendar RMD for DB/CB for many many years so a bit rusty (if a DC, based on 1.401(a)(9)-5, Q&A, based the latest val within the calendar year prior to he distribution due)

Cash balance plan, effective 7/1/2019 with 6/30/2020 year end.

Vesting is 100% after 3 years and no service prior to 7/1/2019.

Participant who is already over age 71, will be 100% vested at the end of 6/30/2022.

When is the first RMD due, 4/1/2023? What benefit do I have to use?

For example, AB at 6/30/2021 is $1,000/month (0% vested); AB at 6/30/2022 is $2,000/month (100% vested). So RMD at 12/31/2022 is? RMD at 4/1/2023 is?"

6 replies   |    49 views   |    Add Reply

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

Wealthy Self-Employed Person Interested in Adding a DB Plan

"I have a client who's a self-employed attorney, Schedule C filer, age 65, average annual compensation of $700,000 (net on Schedule C). She maxes out her DC plan every year and wants to continue doing that. Starting this year, how much could she put into a new DB plan on top of the DC, if any?"

4 replies   |    56 views   |    Add Reply

Santo Gold created a topic in Operating a TPA or Consulting Firm

How to Handle Closed Customer Accounts When Selling a TPA Business?

"When the time comes to sell a TPA business, how are terminated plans/clients or plans that moved on to another TPA typically handled? For example, we have clients that have been gone for 3, 5 even 10 years. If we were to sell the TPA business, who maintains responsibility for any out-of-the-blue questions or follow ups on those old clients -- the new TPA, or the one that is selling? I assume this would be part of a sales agreement, but in general, would a new TPA be willing to that on?"

4 replies   |    58 views   |    Add Reply

Ponderer33 created a topic in Other Kinds of Welfare Benefit Plans

Severance Pay Formula Can Take Into Account the Previous FMLA Leave?

"Is it unlawful for a severance pay formula with a 12-month lookback to reduce the months worked by FMLA leave time taken by an employee? What if all leave time is not included in the severance formula?"

0 replies   |    12 views   |    Add Reply

Manish created a topic in 401(k) Plans

Learning the Compliance Rules for 401(k) Plans

"If I start today to learn compliance for 401(k) plans or, for that matter, all DC plans, what are the basics that I need to know?"

2 replies   |    53 views   |    Add Reply

Will.I.Am created a topic in 401(k) Plans

Post-SECURE Act -- Must a New 3% Safe Harbor Nonelective Plan Be in Effect for At Least 3 Months?

"Under the old rules (pre-SECURE), if you wanted to start a brand new SH plan the plan needed to be in effect for three months in the initial year. I assume this rule is still valid for safe harbor match plans, but what about safe harbor nonelective 401(k) plans? Can you now adopt a safe harbor nonelective plan in December of its first year with the new changes of the SECURE Act? Or would the 401(k) arrangement still need to be in effect for 3 months for either type? I just want to know if the ability to retroactively amend the plan to be safe harbor up to 30 days before the end of the plan year (and even after the year is over if 4% contribution is used) under the SECURE Act applies for the first (initial) plan year."

0 replies   |    25 views   |    Add Reply

K-t-F created a topic in Distributions and Loans, Other than QDROs

Another Plan Termination Question -- Loan Repayment

"When a plan terminates, a loan that's not paid back prior to distribution must be offset. But could the participant pay back the loan after distribution? For instance, the participant might deposit the outstanding loan balance into their IRA within 60 days."

1 reply   |    27 views   |    Add Reply

Pammie57 created a topic in 401(k) Plans

Full Plan Year But Deferrals Start 10/1

"A new plan is effective 1/1. But the plan sponsors did not get it all set up until later. Deferrals started 10/1. Do they have to pro-rate either the deferral limit or catch-up? I've seen conflicting opinions. What about compensation? I'm thinking they use just 10/1 through 12/31."

1 reply   |    47 views   |    Add Reply

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