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Message Boards Digest

November 19, 2020

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

Bird created a topic in Retirement Plans in General

Excluding Terminated Employees Who Had Less Than 500 Hours of Service

"If we have everyone in their own group, and no allocation conditions, for testing purposes, can we exclude those with less than 501 hours and terminated? I don't think so/just checking."

3 replies   |    42 views   |    Add Reply
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Lou S. created a topic in Defined Benefit Plans, Including Cash Balance

Solo DB Plan Termination -- Owner Is Close to 415 Limit on Payout

"I have a 1-owner plan where owner just reached NRA this month and is under the 415 limit on payout but getting close. Can I terminate the plan effective 12/31/2020 to have a full plan year but have have him elect a lump sum now and roll over to IRA so possible gains don't push him over 415 payout? He's not married, so spousal consent isn't an issue."

1 reply   |    36 views   |    Add Reply

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

Union 401(a) Plan Won't Pay My Benefit

"I'm a vested member of the IBEW and have a 401(a) plan through the Union. I have made a career change after almost 20 years, and thought I could roll the balance of the account into a self-directed IRA or some other qualified plan. I just got off the phone with the plan administator, who says that's not an option and that no action can be taken until I reach age 55-1/2. Is this accurate?"

2 replies   |    41 views   |    Add Reply

Rose created a topic in 401(k) Plans

Benefits Rights & Features Test as Applied to Matching Contributions

"We have a plan that has a discretionary match formula in the document. This year they did something unusual that I haven't seen before; I'm trying to figure out if I really need to do a BRF test for it. The annual match is based on the average weekly deferral contribution of the participant. Average deferrals of between $1 - $100, annual match is $200; between $101 - $100, annual match is $350; between $200 - $299, annual match is $550; over $300, annual match is $800. The plan passes the ACP test but the only employees with the $800 match are the HCEs. It isn't a lot of money. Looking at the percentages of compensation, it benefits the NHCEs more but having only the HCEs with the $800 may not look right. Are the results of the ACP test enough to just 'move on' and not look any further at the way the match was done?"

1 reply   |    33 views   |    Add Reply

ejg2553@gmail.com created a topic in Employee Stock Ownership Plans (ESOPs)

Company Took Back ESOP Stock While Employees Away on Military Duty

"Four veterans were working for the company. They were members of the company ESOP, and were called back to duty for one year during the Iraq conflict. They came back after their service and were reinstated to their jobs after 1 year. Later it was determined that the company took back 20% of their ESOP stock while they serving in Iraq. Is that allowed?"

2 replies   |    17 views   |    Add Reply

Stash026 created a topic in 401(k) Plans

Changing to Safe Harbor Formula for 2021: Deadline for Document and Participant Notices?

"I know the SECURE Act changed the notification requirements, etc. but I'm not clear as to its impact here: client that wants to change from a 3% Safe Harbor to a Basic Safe Harbor Match as of 1/1/2021. What's the deadline for the amendment to be signed and a notice to be given to employees?"

5 replies   |    54 views   |    Add Reply

Jakyasar created a topic in Retirement Plans in General

Use Plan Assets to Pay Expenses of Preparing Qualified Replacement Plan's Document?

"We set up a PS plan as a qualified replacement plan (QRP) and billed the client. Excess assets from the DB have been transferred to the QRP. Now QRP only has excess DB assets. No PS contribution will be made for 2020. Client wants to pay the document fee from the new PS plan assets. Legal?"

3 replies   |    32 views   |    Add Reply

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

PBGC Coverage for DB Plans Covering Spouses Only?

"Just curious about everyone's opinion, in what instances a defined benefit plan covering only spouses would be covered by PBGC?"

3 replies   |    32 views   |    Add Reply

Jakyasar created a topic in 401(k) Plans

Deadline for Adopting 401(k) Safe Harbor Plan for 2021?

"To confirm, a brand new 401k plan with safe harbor provisions for 2021 has to be adopted by 12/31/2020?"

3 replies   |    36 views   |    Add Reply

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

PBGC Coverage of DB Plan for a Financial Planner?

"Looking into setting up defined benefit plans for some financial planners for 2020. Does anyone have any experience as to whether they would be covered by PBGC? I am aware that I can ask via a PBGC pilot program, but we might not get a response in time."

3 replies   |    47 views   |    Add Reply

ratherbereading created a topic in 401(k) Plans

OK for Participant to Use COVID Distribution to Pay Off Loan from Plan?

"Does anything prohibit a participant from taking a legitimate COVID distribution and using part of it to pay off an existing (non-COVID) loan?"

1 reply   |    31 views   |    Add Reply

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