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Message Boards Digest

April 23, 2021

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

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

Adding Lump Sum Options or Window -- Discrimination Issues?

"We have a plan that has been frozen since 2010 and currently only pays monthly benefits. The plan is covered by the PBGC. They're debating terminating and are exploring the options of adding a lump sum option/window to 'unload' some of the liabilities. To use round numbers, let's say this plan has: 1 participant who is active on deferred retirement, 10 participants who are terminated but not yet at NRA, 10 participants retired and in pay status (5 of these are at RMD age).

My questions here primarily circulate around possible discrimination issues. [1] If they amend the plan to add the lump sum option (without the use of a window), this would only open the lump sum option up to participants that have terminated and are not yet in pay status, correct? Would this potentially cause discrimination issues since it would not allow participants currently in payout status to elect a lump sum? [2] If we add a lump sum window for the participants already in pay status, would it be ok to only offer it to any employees who are not part of the 'Top 25 paid HCEs'? We have 3 HCEs: 2 are in pay status and the other is the active deferred retirement. The plan is fairly well funded an probably won't have any issues with the 110% asset rule for the top 25 paid HCE's, but we're hesitant to jump right to terminating and offering lump sums and/or annuity purchases for everyone since that could potentially be a high cost. Ideally, we'd like to stagger the payouts so we can analyze after each step."

3 replies   |    39 views   |    Add Reply

TPApril created a topic in Form 5500

SARs to Paid-Out Retirement Plan Participants or Discontinued COBRA Coverage

"Seeing as how SARs are distributed many months after the end of the plan year, to what extent do plan sponsors need to provide the SAR in the following instances: [1] retirement plan where the terminated vested participant has zeroed out their account since the plan year end; [2] health plan COBRA participant who is no longer on COBRA."

3 replies   |    30 views   |    Add Reply

legort69 created a topic in 401(k) Plans

Forfeitures to Fund QNECs for Missed Deferrals Plus Gains

"Can a forfeiture account be used to fund QNECS that cover a lost opportunity to defer (plus gains)? I'm aware that testing corrections can be funded from forfeitures, but I'm looking for clarification or consensus on QNECS to cover LOTD. Also, for missed matches, are they included in the ACP, posted as a QNEC/QMAC, or can it be a non-elective subject to the same vesting as the match source?"

0 replies   |    17 views   |    Add Reply

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

60-Day Rollover Back Into Same 403(b) Plan

"Is there a rule prohibiting an in-service distribution from a 403b plan being rolled back into the same plan within 60 days?"

0 replies   |    14 views   |    Add Reply

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