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Message Boards Digest

February 22, 2021

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

austin3515 created a topic in 401(k) Plans

Amending Today at 4% SHNEC for 2020

"I can use the SHNEC towards all of my nondiscrimination testing, right? (New comp/cross tested, gateway minimum and the like?)"

2 replies   |    41 views   |    Add Reply

trinity8458 created a topic in Qualified Domestic Relations Orders (QDROs)

What Date Is QDRO Calculated From?

"I just found out my ex-spouse has recently been collecting a pension, that he conveniently neglected to reveal that to the court during our divorce proceedings, and I have several questions. [1] Who do I go to for a QDRO -- a financial person with pension knowledge, or a divorce attorney, or someone else? [2] Would my benefit (50%) be calculated upon receipt of the QDRO request or from the time HE started receiving the pension (that's when I would have become eligible also)? [3] The pension QDRO guidelines provide options for monthly payments, which appear to end when either of us dies -- a Shared Interest approach and a Separate Interest approach. Can you explain the difference? Not sure if these are common options or just THIS pensions options. Any insight into my situation would be very helpful."

8 replies   |    73 views   |    Add Reply

CLE Pension created a topic in Defined Benefit Plans, Including Cash Balance

Only Lump Sum Form of Benefit Allowed While Still In Service -- QJSA Waiver Required?

"Cash balance plan's normal form is an annuity, but for the in-service distribution provision, the plan document specifically states it can only be taken as a lump sum (which makes perfect sense). That said, are you still required to display the various annuity amounts on election forms and include QJSA notice, etc.?"

4 replies   |    43 views   |    Add Reply

JMP created a topic in 401(k) Plans

Pooled 401(k) Accounts Require Quarterly Statements?

"Wasn't there a ruling a few years back stating that if an employer were to have 401k plan assets under a pooled account, they were required to provided quarterly statements on the plan and that only providing an annual statement on the 401k pooled assets was not sufficient anymore?"

4 replies   |    65 views   |    Add Reply

MICHAEL HATLEE created a topic in 401(k) Plans

Prevailing Wage Offsets and Testing

"I have a client with a document that allows prevailing wage contributions to offset employer matching (non-safe harbor) contributions. What test applies to the portion of the prevailing wage contribution used to offset a participant's employer match, ACP or 401(a)(4)?"

2 replies   |    44 views   |    Add Reply

constance_james created a topic in 401(k) Plans

Spinning Off from a Multiple Employer Plan: Do the Successor Plan Rules Apply?

"The employer was part of a PEO's Multiple Employer Plan and has spun off into its own 401(k) plan. Is the new plan considered a successor plan, and therefore cannot use the use the 3% Prior Year average available for the first plan year? Or is the new plan considered a new plan?"

1 reply   |    34 views   |    Add Reply

Peter Gulia created a topic in 401(k) Plans

Why Not Have Everyone Be Eligible to Make Elective Deferrals?

"When the time comes and with some exceptions, a non-governmental Section 401(k) plan must (to tax-qualify) permit an employee to make elective deferrals if the employee has at least 500 hours of service a year in at least three consecutive years and has met the plan's age requirement (for example, 21) by the end of the three-consecutive-year period.

A plan need not provide nonelective or matching contributions for such a long-term part-time employee.

Relief from nondiscrimination and top-heavy rules applies only regarding 'employees who are eligible to participate in the [Section 401(k)] arrangement solely by reason of [Section 401(k)](2)(D)(ii)[.]' I.R.C. (26 U.S.C.) Section 401(k)(15)(B)(i); accord Section 401(k)(15)(B)(ii).

Some employers are considering simplifying a new provision by making all employees, with no age or service condition, eligible for elective deferrals (without providing a nonelective or matching contribution).

If an employer in its particular circumstances is not worried about coverage, nondiscrimination, and top-heavy rules, Is there some other reason an employer should consider not extending elective deferrals to all employees?"

8 replies   |    78 views   |    Add Reply

Stash026 created a topic in Defined Benefit Plans, Including Cash Balance

Cash Balance / Profit Sharing Plans Rate Group Testing

"Just needed to confirm something for testing purposes. Owner has a son that makes $50k and contributes the max into the 401(k). It's currently a Safe Harbor Plan, so there's no testing issues (they also make an additional Profit Sharing). They're considering adding a Cash Balance Plan to further maximize the contributions for the owner.

If I were to exclude the owner's children from the Cash Balance, do I still have to include them into the testing for the offset? (Obviously the son's EBAR is astronomical, since he's only in his 30s, so including him makes passing the test impossible.) If he's excluded from the Cash Balance, he can also still get the same Profit Sharing he would've gotten, correct?"

6 replies   |    46 views   |    Add Reply

AJC created a topic in Retirement Plans in General

One Partner in Partnership Wants Only Alternative Investments in 401(k)

"I have a client that is a partnership sponsoring a 401(k) plan. There are 8 partners with equal ownership and 50 rank and file employees participating under the plan. All partners are surgeons, each has a separate P.A. and all are adopters and signers of the plan. Their plan document allows investment in 'qualifying plan assets' only. One of the partners wants to invest his account exclusively in gold and bitcoin. So, without requiring the plan to ease its investment restriction, is there a way to accomplish this? For example, could this be accomplished if this particular partner's P.A. sponsored its own plan? Or in another manner?"

1 reply   |    31 views   |    Add Reply

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