Message Boards Digest

March 31, 2021

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

HS created a topic in 401(k) Plans

Coverage Testing with Union Employees

"I have a 401(k) plan where the employer has many union employees covered by a collective bargaining agreement. The union employees are currently excluded from the 401(k) plan. The owner is covered by the CBA under a separate union agreement, along with only a few other employees. For a little background, about 75% of the company's workforce is made up of union employees. If the plan were to amend to allow employees from only the separate union agreement that includes the owner, would all union employees need to be included in the compliance testing, regardless if they are excluded from the plan? The concern is that including all union employees would more than likely result in failed coverage testing."

1 reply   |    50 views   |    Add Reply

buckaroo created a topic in 401(k) Plans

Postponement of 402(g) Corrective Distributions

"Does the postponement in tax filing deadline (from 4/15 to 5/17) also cause a postponement of when 402(g) corrective distributions must be processed?"

1 reply   |    31 views   |    Add Reply

AbsolutelyOkayPossibly created a topic in Retirement Plans in General

Joint Employer Status Allows for Single Employer Plan?

"I have an employer who states they have joint employer status with their employees, but almost all the employees are directly employed by other entities. No controlled group exists between the entities, but they are claiming a controlled group isn't necessary for these employees to participate in their plan. Has anyone encountered such a scenario? How do you set up the plan document this way when it seems like the IRS and DOL conflict?"

2 replies   |    26 views   |    Add Reply

cwallace created a topic in 401(k) Plans

In-Service Withdrawal for Short-Term Disability

"Our plan is looking into the possibility of adding an in-service withdrawal feature tied to the occurrence of a short-term/temporary disability. We have not been able to find much guidance in our research to confirm that [1] this is permissible and [2] what parameters can we place on it.

I know the Treas. Reg. 1.401(b)(1)(ii) allows for in-service withdrawals of funds after a 'fixed number of years, the attainment of a stated age, or upon the prior occurrence of some event such as layoff, illness, disability, retirement, death or severance of employment.' Would a short-term or temporary disability (that would not qualify for the exception to the 10% early withdrawal penalty if the worker is under 59 1/2) be an event that would allow for an in-service withdrawal? (We would only allow withdrawal of employer contributions that are vested and put a cap on the amount that could be withdrawn, plus require proof/documentation for the short-term disability).

If anyone has added this type of feature or can provide references to any IRS or DOL guidance (whether articles, PLRs, Revenue Rulings, etc), that would be great. My research hasn't been very fruitful (although I did come across at least one plan that incorporates this feature) but not much more."

3 replies   |    44 views   |    Add Reply

mariemonroe created a topic in Form 5500

Submitting a 'Reasonable Cause' Statement to DOL for a Late-Filed 5500

"Client is filing 2018 and 2019 5500s soon and has what I believe to be a reasonable cause for the late filing. Client received a penalty notice for the 2018 from the IRS but not from the DOL. I have prepared a reasonable cause statement response to the IRS but am unclear what needs to be done with regards to the DOL. Do we file DFVCP and pay the penalty or can we get any penalty waiver pursuant to a reasonable cause statement? If the latter, where do we send it?"

2 replies   |    12 views   |    Add Reply, Inc.
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