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Message Boards Digest

June 21, 2021

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

Belgarath created a topic in 401(k) Plans

QACA Using 3% Nonelective Safe Harbor, Mid-Year Amendment to Remove Safe Harbor

"Due to the QACA, 2-year vesting is being utilized. If one amends the plan mid-year to take it out of safe harbor status, does the 2-year vesting still apply to the safe harbor piece? It would seem reasonable to me that it would immediately become 100% vested, but I've not seen this issue."

4 replies so far   |    Click Here to Add a Reply

Gadgetfreak created a topic in Operating a TPA or Consulting Firm

EOB vs. TAG vs. ERISApedia

"Does anyone have any experience with these three services? EOB, sold though ASPPA, is very thorough but a bit overwhelming. Not the easiest to find info but, when you do, it is extremely useful. TAG's online resources are even more difficult to navigate but their archive of Q&A's is helpful. They recently implemented a 50-question/year limit. They are supposed to reply to questions within 24 hours but it has been taking 2-3 days recently. ERISApedia is the 'new kid on the block'. Started by the founder of ftwilliam (I am a big fan), it has an 'Ask an ERISA Attorney' option with various annual fees for a block of questions. Questions are supposedly answered in 4 business hours. They also have an online resource that, supposedly, could replace those from TAG and EOB. If I switch, it is not about pricing (though ERISApedia is probably a few hundred dollars less expensive). Does anyone have any experience with these services and can shed additional light on pros/cons of each?"

7 replies so far   |    Click Here to Add a Reply

kmhaab created a topic in 409A Issues

Deferrals Allowed After a Payment Event?

"Elective deferral plan states that upon attainment of age 65 deferred amounts will be distributed in 120 monthly installments beginning the first of the following month. A new Director joined in May 2019, elected to defer his fees and turned 65 six months later (Nov. 2019). He has been allowed to continue deferring his fees and no distributions have been made to him yet.

I'm trying to identify exactly what the failure(s) are here and am looking for input/opinions related to the amounts deferred after he turned 65.

Should he have been allowed to defer at all after age 65? If not, the entire amount deferred after age 65 must be paid out this year and the entire amount deferred in prior years is likely subject to penalties.

Or was he allowed to defer after age 65, but the distribution installments should have begun immediately following the deferral? For example, could he defer fees in May 2020, but distribution should have begun immediately since he was over age 65? Still on a 120 installment schedule? If this is the case, only the installment amounts that should have been distributed so far must be paid out this year and subject to penalties."

1 reply so far   |    Click Here to Add a Reply

TPApril created a topic in 401(k) Plans

Looking for Design Options as to Considered Compensation for Owner of One-Person S-Corp

"Are there options for types of pay to consider as eligible pay for a one-person S-Corp other than W-2 pay? Just checking the terms of the plan document is not an option because the plan is being set up right now."

2 replies so far   |    Click Here to Add a Reply

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

Frozen DB Plan -- What Are the SPD/SMM Requirements?

"I have a defined benefit plan that was frozen as of 12/31/2013. The SPD is really old (12/1/2000). I'm assuming that at least an SMM should have been done. Plan document was restated as of 1/1/2015. Are there different requirements when a DB plan is frozen? (Maybe something like 5 years after a major change, 10 years otherwise, etc.?)"

No replies yet   |    Click Here to Add a Reply

ecolno created a topic in Employee Stock Ownership Plans (ESOPs)

Termination as Part of 262 Short Form Merger

"Situation: new owner aquires enough shares from the founders of a Delaware Company to terminate the ESOP program and execute a 262 short term merger, squeezing out all shareholders. The acquirer has informed the ESOP participants about their upcoming cashout, determining the price of the shares exactly the same as in the deal closed with the founders (basically 2020 valuation plus 50% of potential upside based on 2021 valuation). Two weeks later the 2021 valuation is published (done externally) and shows a 70% price increase compared to 2020. Do the employees have any chance to challenge the price offered to them?"

No replies yet   |    Click Here to Add a Reply

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