Message Boards Digest

November 3, 2020

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

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

CARES Act Loan Deferment

"An employer provides for loan deferment for qualified individuals under the CARES Act. If a participant has already defaulted on their loan but later becomes a qualified individual, does the employer still have to give that participant the option to defer the loan (i.e., reverse the loan default)?"
0 replies   |    18 views   |    Add Reply

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BG5150 created a topic in 401(k) Plans

What year 5330?

"Plan failed 2019 ADP test. Refunds are being done now. What 5330 would i use? I figured 2019. However, is the form considered late (calendar year plan--it's even past the extension date)?"
2 replies   |    39 views   |    Add Reply

dmwe created a topic in Cafeteria Plans

Multiple Testing Failures

"I'm testing a Plan that's failing the Contributions & Benefits test, the DCA 25% Concentration Test and the DCA 55% Ave Benefits Test. The software is giving me a $4000+ number for the correction to the HCEs DCA contribution amount. Would that "reclassification" then funnel down to a new number to be used now in the Contributions & Benefits test, since his DCA contribution total is going to be adjusted? Thanks"
0 replies   |    13 views   |    Add Reply

MDOWNS@CBIZ.COM created a topic in Distributions and Loans, Other than QDROs

RMD 2020 Waiver and sample amendment

"If a plan opts to adopt the sample amendment found in Notice 2020-51, is a notice to plan participants or SMM required to be distributed plan participants? If yes was a sample notice to participants provided ?"
1 reply   |    40 views   |    Add Reply

Chiswick created a topic in Qualified Domestic Relations Orders (QDROs)

What does the phrase investment experience mean in a QDRO document?

"What does the following wording mean in regards to a QDRO? (including any investment experience) Our 401k QDRO was recently completed nunc pro tunc after our divorce in August of 2018. My wife passed 7 months after the divorce judgement. Her son is beneficiary. The QDRO states: This order assigns to the Alternate Payee (myself) 55% of the Participant's account as of December 31, 2018, including any investment experience thereon from December 31, 2018 to the date of transfer to him. The judgement assigned 45% to my ex-wife so her son will be the beneficiary of that percentage. So in regards to investment experience does that include any interest made up until the date of transfer? or is it just based on the balance of December 31, 2018 or today's value??"
1 reply   |    35 views   |    Add Reply

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Mike D created a topic in Qualified Domestic Relations Orders (QDROs)

QDRO Pension Distribution: Marital Benefit Period

"I divorced in 1994 after 10 years of marriage and had a QDRO drafted by an attorney who represented my wife and I (big mistake). The QDRO specifies that my wife is to receive 50% of my current pension benefit, reduced by the fraction: number of years married / number of years worked for the company. This gives her about 14% of my current pension value. The issue is that my pension is based on my 3 highest years salary and I earn significantly more money today than I did when I divorced in 1994. Additionally, in 2000 I quit the company but later returned to the same company in 2004 (10 years after the divorce). I never cashed-out my pension. At the time of my divorce, my income was about $70,000 per year and my lump sum pension estimate was $90,000 at age 65. In 2020, my salary is about $200,000 per year and my pension estimate is $1,400,000. Some of that increase related to salary and some is driven by low interest rates. Based on the QDRO calculation, my ex-wife would receive about $200,000. If the QDRO had based the calculation on my income at the time of divorce, my ex-wife would receive about $60,000. This seems completely unfair. My ex-wife is entitled to part of my pension as community property for the time period we were married. However, as written, the QDRO is allocating significant benefit to her for events that occurred 10+ years after our divorce. Additionally, since I left the company in 2000, that would seem to put an end to the QDRO drafted in 1994. I'd be willing to calculate her portion of the QDRO through 2000 because my income significantly increased after I left the company and subsequently returned. Unfortunately, since the QDRO specifically names my company's pension, and since I'm still getting that same company pension, my company plans to calculate my ex-wife's share of my pension based on the current pension value. Is this something I can take to the court and realistically get relief? Would California courts be willing to change the QDRO almost 30 years after it was drafted and make the distribution more applicable to the marriage time period by adjusting the salary portion of my pension calculation?"
1 reply   |    24 views   |    Add Reply

Peter Gulia created a topic in Defined Benefit Plans, Including Cash Balance

How many cash-balance pension plans tap PBGC coverage?

"How often does it happen that a cash-balance pension terminates with the Pension Benefit Guaranty Corporation topping-up benefits?"
2 replies   |    28 views   |    Add Reply

TPA created a topic in 401(k) Plans

Plan Eligibility Amendment

"Off PYE - 08/31- original effective date of Plan - 09/01/1995 401(k) and 3% Safe Harbor Non-elective effective on 09/01/2019 Plan Eligibility age 19, 2 months elapsed time, 1st of month Part -time employee hired on 01/02/2016 works 2 hours a week cleaning. Has never deferred. On 08/31/2020 was eligible to receive a SHNE contribution. Company wants to amend the Plan to exclude part-time from the Plan now 2 months after new Plan year. 1. My colleagues think that once an employee has met initial eligibility for the Plan and are in that you can't take a benefit away. Is this true? 2. It is too late to amend the Plan for the 2020 PYE. Would it be acceptable to amend eligibility for the Plan for 2021 to be age 19, 1 year with 1,000 hours and dual entry? Would that PT employee still be eligible in this scenario in 2021? Thanks"
0 replies   |    20 views   |    Add Reply

EHD created a topic in 401(k) Plans

Lifetime income disclosures in 2021 or 2022?

"Apologies if this has been addressed. If it has, I can't find it. The interim final rule on lifetime income disclosures specifies that it is effective as of September 18, 2021. However, both the rule and the original legislation state a variant of the following: "The requirement in subparagraph (B)(iii)shall apply to pension benefit statements furnished more than 12 months after the latest of the issuance [of]... interim final rules" link I read this to mean that the first lifetime income disclosure would need to be released at some point within 12 months of September 18, 2021 (i.e., before September 18, 2022). That is, the first lifetime income disclosure need not be released in 2021, but must occur during 2022, most probably by the Q2/2022 statement, at the latest. What's the community opinion? Thanks!"
1 reply   |    28 views   |    Add Reply

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