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Message Boards Digest

June 24, 2021

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

5500sorBust created a topic in Form 5500

Fee-Wrapped Mutual Funds -- Reporting on Form 5500

"Would a unitized, fee-wrapped mutual fund be reported any differently on the 5500 schedules versus a normal mutual fund?"

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K Erica Miller created a topic in Retirement Plans in General

2020 Annual Limitation Exceeded but PS Contribution Deposited in 2021

"I had a plan sponsor calculate their own profit sharing and deposit it into participant accounts prior to the annual testing being completed. If this contribution was for the 2020 plan year but the profit sharing was deposited in 2021, can't they just reduce the participant accounts by forfeiting the excess? They are being told they need to use the correction method used for EPCRS, and I don't agree, because the funding wasn't done until after the plan year end. That's how we've always handled these situations previously."

2 replies so far   |    Click Here to Add a Reply

AlwaysLearning created a topic in Cross-Tested Plans

New Comparability Contributions Made Throughout the Year

"Here are the specifics:

SH - 3% nonelective.

PS - allocation method - new comparability - everyone in their own group - plan document indicates plan year compensation is used for allocation purposes - no allocation conditions.

Plan is Top Heavy.

The client would like to make quarterly SH and PS contributions throughout the year.

[1] Do we need to perform the required new comparability cross-testing (rate group/non-discrimination/gateway) for each allocation if the HCEs are receiving a greater contribution than the NHCEs? Or do we just need to make sure it passes at the end of the plan year? [2] If we do need to test each time a PS contribution is made, what Code section requires this?"

5 replies so far   |    Click Here to Add a Reply

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

Problems Obtaining Information from Feisty Prior Actuary

"We were recently engaged by a new client to take over their actuarial work. The client messaged the prior actuary asking them to share historical plan information and discuss the plan with us. We followed up with a formal request for data and heard nothing. After repeated requests with no response we started calling the prior actuary with no response and no ability to leave a voicemail. Well, today I got through on the phone. I introduced myself and the prior actuary immediately hung up. I called back a few hours later and was told, "**** you!" and he immediately hung up. Any thoughts?"

7 replies so far   |    Click Here to Add a Reply

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

COBRA Required When Large Employer Acquires All Assets of COBRA-Exempt Smaller Employer?

"Small employer (always under 20 employees) has a group health plan. It's subject to state continuation requirements, but state law does not mandate any coverage after the group policy itself is terminated and there is no rule regarding M&A or successor liability.

Large employer (always over 20) has a group health plan.

Large employer is acquiring small employer in an asset purchase. The seller's employees and its group health plan will be terminated in connection with closing.

If an employee of the small seller chooses not to accept the employment offer at closing from the large buyer, does the large buyer have an obligation to offer them COBRA under the large buyer's plan?

I don't think so, based on the small employer exception and the fact that even an employer that 'grows' into a large employer under COBRA still does not have to offer COBRA to anyone who incurred (what otherwise would be) a triggering event during the time the employer was excepted under the small employer rules. Rev. Rul. 2003-70 doesn't address this fact pattern, presumably because it's already answered by the regs.

The only thing giving me pause is the definition of employer, which includes a successor, but I don't read that as requiring the (pre-sale) small seller to count the (post-sale) large buyer's employees as the seller's own employees prior to the asset sale. Instead, the rules seem more clear that, even if an employer becomes large via an asset sale, it still does not have to offer COBRA to any individual for any event that occurred while the employer was small. Appreciate any thoughts or confirmation."

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

Timing of Calculation of Limit on Employee's Mandatory Cashout

"411(a)(11)(A) discusses the mandatory cashout limit. But where is a statute, regulation or guidance requiring that the account value for this purpose is the value on the date the employee's employment terminated?"

1 reply so far   |    Click Here to Add a Reply

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