Message Boards Digest

July 16, 2021

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

TPApril created a topic in Operating a TPA or Consulting Firm

Data Retention of Former Clients

"What are other TPA's doing with regard to maintaining data for former clients.? When do you delete it? Do you provide terms of deletion in your service agreement? What about long standing clients whose agreements never referenced a deletion policy?"

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Cynchbeast created a topic in 401(k) Plans

Safe Harbor Contributions with Multiple Plans

"We have client with 401(k) plan and separate PS plan. They want to satisfy ADP testing for the 401(k) by making SH contributions to the PS plan. Both plans use the same prototype document. The document DOES allow for the 401(k) testing to be satisfied with SH contributions to ANOTHER plan. However, nowhere in the document does it have anyplace to state the SH contributions made to the PS are intended to satisfy testing to another plan. Does this satisfy all requirements, or does the PS have to specifically state that it's SH contributions are intended to satisfy another plan?"

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TPApril created a topic in 401(k) Plans

The Dreaded Tiny One-Day Delinquent Contribution

"Due to set of unusual circumstances, a small plan Plan Sponsor, which always deposits 401(k) contributions on time, deposited the sum total of $150 for 3 participants one day late (i.e., 8 business days after withheld). Report on 5500?"

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

Post-NRA Accruals in 401(a)(4) Testing

"Let's see how clearly I can detail the situation: Two owners are the only participants in a DB plan. They're each about 70. The DB plan NRA is 65+5 yop. Formula is 10% per year, and they each earn about 120,000 per year on their W-2s.

The two owners and two staff people are in a DC plan (meant to provide the staff their test-passing requirements, mostly). That plan has an NRA of straight age 65. The two participants are 75 and 57. So this isn't easy to pass to begin with.

2020 was year six for the plan, effective 1-1-2015. So the owners are only now past their NRA.

A. The owners' accrual has increased from 50% (five years times 10%) now to 60% of high-3. This new benefit is larger than the actuarial increase of the 50% benefit as of NRA last year.

B. The regulations say you can ignore actuarial increases in the 401(a)(4) testing only if the employees have a uniform normal retirement age.

Am I stuck not having a uniform NRA between the plans? Could it retroactively be amended lower from 65+5 to 65? Does the fact that the DB plan's participants are past the need to even mention the 5 yop in the NRA definition carry any impact? The staff people are excluded from the DB plan by job category, although I suspect that doesn't help the argument that the NRA basically is just 65 in the DB plan at this point.

Obviously it's a lot easier to pass the testing if their DB accrual rate isn't the full 10% but perhaps just (60 minus the adjusted value of the 50 from the year before)."

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Jakyasar created a topic in Form 5500

Final 5500 Return - Late for Filing 5558

"Calendar plan, final distribution done in November 2020, i.e., final 5500 form is due 6/30/2021. So a short plan year. I was just told about this today which means 5558 was not filed timely.

The sponsor is a calendar C-corp which went on extension for the 2020 filing. So the due date of the 2020 corporate tax return is extended to 10/15/2021.

Can the sponsor rely on this automatic extension and file the final 5500 forms by 9/15/2021 -- the extended due date for a November filing? Or it has to be thru DFVCP?

The following condition from the instructions may not make it possible: (1) the plan year and the employer’s tax year are the same. Your comments are appreciated."

1 reply so far   |    Click Here to Add a Reply

BG5150 created a topic in 401(k) Plans

Mistake of Fact -- What to Do About Earnings?

"Participant in plan elected to stop deferring, but the company kept up the deductions. The company has made her whole through payroll. We are correcting this as a mistake of fact. What happens to the earnings? The participant shouldn't keep it as a windfall. (This participant is an HCE and Key EE) I don't think the company should receive it either. Do I put it into the forfeiture/suspense account? Deferrals are the only contributions in the plan. I wouldn't want to reallocate the $200 as a PS as it will result in tiny amounts for people who don't even have accounts."

1 reply so far   |    Click Here to Add a Reply

Santo Gold created a topic in Form 5500

Use Plan Administrator's Digital Signature on Form 5500 Prepared by the TPA?

"Our TPA firm obtains authorization from the plan sponsor/plan administrator and files the 5500 for the company. Can the 5500 signature from the plan sponsor/administrator be digital or does it have to be a 'wet' signature in order to be valid?"

1 reply so far   |    Click Here to Add a Reply

RatherBeGolfing created a topic in Correction of Plan Defects

New EPCRS Rev Proc 2021-30


1 reply so far   |    Click Here to Add a Reply

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