Message Boards Digest

May 3, 2021

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

PS created a topic in 403(b) Plans, Accounts or Annuities

Actual Purchase of Annuity Contracts Upon Termination of a Money Purchase Pension Plan?

"A money purchase pension plan is terminating. Will this plan sponsor need to purchase an annuity for those who elect an annuity form of distribution before the plan can terminate?"

0 replies   |    25 views   |    Add Reply

chibenefits created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Negotiating a Lower ESRP Penalty

"Let's say a company that qualifies as an ALE simply did not provide health insurance to all FTEs from 2015-2018. Just didn't do it. Company just received ESRP assessment (total $ in the low 6 figures) for 2018. We are assuming that the IRS will look at prior years. If IRS assesses similar penalties for those years, it will put the client out of business. Will the IRS negotiate the amount of the penalty when the issue is NOT whether it was calculated correctly? Any thoughts on talking to IRS to get a settlement for all years of liability and not just 2018? Any other ideas or tips? Thanks!!!"
1 reply   |    24 views   |    Add Reply

Vlad401k created a topic in 401(k) Plans

Handling Multilayered Ownership Interests in Making HCE Determination

"Company A owns 100% of Company B. A person works at both Company A and Company B and owns 20% of Company A. Would this participant be considered an owner of Company B for HCE determination purposes?"

1 reply   |    40 views   |    Add Reply

ldr created a topic in 401(k) Plans

Amending a Plan After the Close of the Plan Year to Pass Gateway Test

"Is it acceptable to amend a plan for the prior plan year (PYE 12/31/2020) in the next year (now) to remove a year-end service requirement in order to pass Gateway and therefore provide a profit sharing contribution to an NHCE that wouldn't otherwise be eligible for that allocation?

Seems to me the employees would benefit more if permitted. Or, is this only allowed to fix a failed coverage test?"

2 replies   |    47 views   |    Add Reply created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Charge Document Restatement Fees to a Fully Insured H&W Plan?

"Is it possible to charge administration expenses to a fully-insured H&W plan? We are updating the plan docs and SPDs, which is an administrative expense, thus this question."

0 replies   |    17 views   |    Add Reply

golfnut created a topic in 401(k) Plans

Plan's Web Site Says I Must Wait 999 Days Before Getting My Distribution!

"I'm looking to retire soon. I'm 63. I've run into the following problem. The waiting period for final distribution of my 401(k) according the its web site reads:

Your plan sponsor requires a waiting period of 999 days, after leaving employment, before you can request a transaction. This time may be used to provide important information to (deleted name of plan administrator that we have been with for 24 years) and to deposit the final contributions into your account. Your personal options may change based on information provided by your plan sponsor.

This seems excessive to me. That's 2 and 3/4 years! Going through my hard-copy paperwork for my 401(k), I'm finding nothing about such a waiting period. My employer tells me that he doesn't know about this, and that he'll meet with the company accountant for an explanation. Who is legally entitled to determine the 999 days? I really need to get this changed."

6 replies   |    78 views   |    Add Reply

Purplemandinga created a topic in Retirement Plans in General

How to Apply Code Section 411(a)(11)(A) to MEPs?

"IRC 413(c) governs MEPS, and specifically IRC 413(c)(3) determines how vesting rules are determined. IRC 413(c)(3) states that IRC 411 for vesting rules shall apply as if all employers were one employer. IRC 411(a)(11)(A) discusses the rules stating that amounts greater than $5,000 require spousal consent.

A MEP (comprised of many participating employers) has two of those participating employers where a single participant has an account balance in each participating employer's plan. The participant has $2,500 in Employer A's plan and $2,501 in Employer B's plan. Only Employer A's plan provides for involuntary force-outs. The participant is currently employed at Employer B.

Employer A (where the participant has a $2,500 account balance) is reviewing this participant in regards to whether to force them out because they are no longer employed at that employer. [1] Does the plan administrator consider the $2,501 balance in Employer B's plan in determining whether to force out the $2,500? [2] Would the answer to change if the participant were no longer employed at employer B? [3] Would the answer change if the account balances in both plans were $2,500? [4] Would the answer change if both employers' plans provided for force-outs?"

1 reply   |    22 views   |    Add Reply

Stash026 created a topic in 401(k) Plans

Effective Date of More Strict Entry Date

"A plan was amended to change its eligibility requirements to be age 21, 1 YOS minimum, Quarterly Entry Dates, all effective as of 01/01/21. Which employees are affected? If someone was hired in 2020 but had not yet gained eligibility, is their eligibility decided by the old rule (21 & 1 with Immediate Entry) or the new rule (under which they'll need to wait until the start of the quarter)?"

3 replies   |    35 views   |    Add Reply

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