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Message Boards Digest

October 12, 2020

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

Susan L. created a topic in Defined Benefit Plans, Including Cash Balance

COLAs in Private Sector DB Plans?

"Are you aware of any private sector defined benefit plans, not including multiemployer plans, that still occasionally provide for an ad hoc cost of living increase of retiree pension payments? Or do you know any resource for researching this question?"

6 replies   |    58 views   |    Add Reply
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Jakyasar created a topic in Retirement Plans in General

Profit Sharing Plan -- Can the Allocation Method Be Changed for 2020?

"Current profit sharing plan document provides: - No last day rule - No minimum hours requirement - Comp-to-comp allocation. An attorney is saying that, because no PS contributions were made during 2020, the allocation method can be changed now or by end of year, so that each participant can be their own group. The contribution will be made after the plan year. Can that be done?"

8 replies   |    86 views   |    Add Reply

austin3515 created a topic in 401(k) Plans

Recordkeeper Who Will Take a Plan Without an Investment Advisor?

"Does anyone know of a recordkeeper will take a plan with no advisor? I think Employee Fiduciary mught be one? If so, what have the sponsors done for an investment line-up? I was thinking the sponsor might choose to just offer some series of target date funds... We have a decent number of clients who won't leave brokerage accounts because they don't want to pay 50 basis points to an advisor. And some plans are so small no advisor would ever take them."

11 replies   |    108 views   |    Add Reply

Carol V. Calhoun created a topic in Retirement Plans in General

Projected 2021 Limits?

"I know that the IRS won't announce the new 415, etc., limits until at least late October. However, in past years, @Tom Poje used to project the limits about now. Given his retirement, is anyone else doing this?"

1 reply   |    49 views   |    Add Reply

Francis created a topic in Form 5500

End of Year Value on Line 6a of Form 5500-EZ

"The 2019 Form 5500-EZ asks for the total plan assets at the end of the year (Line 6a, column 2). The 12/31/2019 account statement shows a 12/31/2019 value of $300,000. In February 2020 a $17,000 contribution was added for the 2019 plan year. Should Line 6a column 2 show $300,000 instead should it show $317,000?"

1 reply   |    44 views   |    Add Reply

gc@chimentowebb.com created a topic in Nonqualified Deferred Compensation

Postponement Election by a Specified Employee

"How would you administer the 1 year/5 year elective postponement rule for an employee who is a specified employee?

For example, Jill is a specified employee with a payment due at separation. She intends to retire in 7 months, but the payment must be delayed for 6 months. Is the 1 year deadline to make the postponement election measured to the date of separation when the payment would have been made, if not for the 6 month delay? If so, it is too late for Jill to postpone? Or is the 1 year election deadline measured to the date it will actually be paid, 13 months from now in this example, which would make this a timely election for Jill?

And, just to be consistent, from which date -- termination date when it would have been paid, or 6 month delay date when it is paid -- does the 5 year postponement clock run against?

I'm thinking that the 1 year and the 5 year periods are each measured against the actual payment date, taking the 6 month delay into account as a plan provision. In other words, Jill in this example could make a timely election, even though only 7 months before the date when the payment would have been made were it not for the 6 month delay. The 5 year postponement period would also be measured from that actual payment date."

1 reply   |    27 views   |    Add Reply

pjr@frdayton.com created a topic in Form 5500

Using Code 4R on the Form 5500-SF When Moving from a Trust to a Fully-Insured Product

"We have a small employer health plan that is maintained in conjunction with a trust. Therefore it's funded and we file a Form 5500-SF. We have assigned Plan # 501 to the filing. When the plan terminates the trust and switches over to a fully insured product, we list Code 4R saying the plan will not file a Form 5500-SF going forward. We believe this is better than indicating it's a final filing. In other words, the plan continues, but the funding method has changed; the plan is not terminated. If we marked the filing as final, then we would have to use Plan # 502. Does anybody have any thoughts on this?

Clearly we have to use Code 4R or mark it as final; otherwise the government will expect another filing. Again, we think the better approach is to use Code 4R rather than indicate it is a final filing when the employer simply continue the plan but changes the funding method."

1 reply   |    22 views   |    Add Reply

BTG created a topic in Plan Document Amendments

Employment Agreement Can Serve as a Plan Amendment?

"Is anyone aware of a good discussion on whether/when an individual employment agreement will be construed as an amendment to an ERISA plan? For example, assume a retirement plan provides for 3% employer contribution, but the company signs a contract with one employee promising 5%. Or, alternatively, a retiree health plan provides that benefits can be discontinued at any time, but the company signs a contract with one employee promising to maintain those benefits for life. I have to imagine that this issue comes up relatively frequently especially at less sophisticated companies, but I have found surprisingly little guidance so far."

3 replies   |    41 views   |    Add Reply

my2greenize created a topic in Health Plans (Including ACA, COBRA, HIPAA)

COBRA Eligibility After Re-employment and Subsequent Termination or Reduction in Hours

"I retired early due to COVID and am now on COBRA benefits. If I go back to work for the same company I retired from, and I again get health insurance benefits, and then leave or reduce my hours, would I be eligible for COBRA benefits again?"

1 reply   |    12 views   |    Add Reply

JulesInCNY created a topic in Retirement Plans in General

Beneficiary Neither Resides in the United States Nor Is a U.S. Citizen

"Has anyone had a situation where the named beneficiary is not a US citizen or resident? I'm not sure what to use for a taxpayer ID number or whether I should be advising this person that they will have to file a US income tax return, because the funds being paid out are coming from a qualified retirement plan (not individual) where the participant lived/worked in the U.S. and had an SSN. He passed away unexpectedly following retirement so we didn't have a chance to pay him out directly. We're dealing with a family member outside the U.S. who doe not speak English. I have no direct contact information other than through the prior employer."

2 replies   |    17 views   |    Add Reply

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