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Message Boards Digest

July 23, 2021

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

waid10 created a topic in Other Kinds of Welfare Benefit Plans

HRA Contribution Calculation Following Mid-Year Change in Coverage

"How do you handle the contribution calculation for an HRA when a participant makes a mid-year change in coverage? We (the employer) provide a $1,500 HRA contribution for Employee + 1 (spouse or child) coverage and a $750 contribution for Employee Only coverage. We have a participant that changed from Employee + 1 to Employee Only coverage on April 1st. Is the calculation simply pro rated for the remainder of the year?

Here is an illustration of my thought process:

$1500 divided by 12 months = $125 per month for January - March = $375.00

For remainder of the year, $750 divided by 12 months = $62.50 per month for April - December = $562.50

$375.00 + $562.50 = $937.50

Is this the correct approach?"

No replies yet   |    Click Here to Add a Reply

Young Curmudgeon created a topic in Defined Benefit Plans, Including Cash Balance

Deduction of Post-Termination Funding

"An employer is required to fund additional money due to market fluctuations to pay out the final benefits and close a plan. The date of the funding is past the deduction deadline (9/15/20) for the year of plan termination (2019). Can they deduct the contribution for the year it is made even though the plan was not active for that year? I am being told that it's not deductible for 2020 because they do not have a plan for 2020. Here are some example dates:

Plan termination date 12/30/19

Tax deadline 9/15/20

Contribution date 11/1/20"

2 replies so far   |    Click Here to Add a Reply

TMcfall created a topic in Plan Terminations

Testing a Terminating 401(k) Plan

"When testing a 401(k) plan that has made the determination to terminate the plan. Would the plan year end date for purposes of non discrimination testing be the date the termination resolution was signed? Here is an example:

The company is going out of business and the resolution to terminate the plan was signed in March. Would non discrimination testing be run from 1/1 - March (the plan is calendar year) or would the compliance testing run from 1/1 - the date the assets are at zero?"

1 reply so far   |    Click Here to Add a Reply

Santo Gold created a topic in Retirement Plans in General

3 Plan Sponsors Part of a Controlled Group; Each Wants to Sponsor a Separate Plan

"We have 3 companies that are part of a controlled group. Each wants to sponsor a separate 401k plan the covers only their eligible participants. Let's assume there are owners who would be eligible for all 3 plans. Would each owner (or participant) have separate 415 limits in each plan? Or does the CG mean that they share only one 415 limit across all 3 plans?"

1 reply so far   |    Click Here to Add a Reply

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