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Message Boards Digest

October 11, 2021

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

Perplexed created a topic in Qualified Domestic Relations Orders (QDROs)

Termination Before Retirement-- What Happens to QDRO?

"What happens to a QDRO if the employee is terminated before retirement? Or terminated due to vaccine mandate?"

1 reply so far   |    Click Here to Add a Reply
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AlbanyConsultant created a topic in Retirement Plans in General

Hurricane Ida 5500 Relief for Plan in New York City

"Thankfully, none of my clients ever seem to be in a disaster area where they need disaster relief, but this time, one of my audited plans is in NYC and wants to take advantage of the 1/3/22 deadline. From what I'm reading, there's nothing special to do-- just file before the new deadline, and the IRS is supposed to know by the address that the plan sponsor is eligible for the relief. Does that sound right? Doesn't the box on Line D usually need to be completed? I don't want to add a $2,000 late filing penalty to this company's other issues."

No replies yet   |    Click Here to Add a Reply

Jakyasar created a topic in 401(k) Plans

Setting Up a New Plan for 2021-- Missed the Safe Harbor Deadline, Correct?

"If sponsor wants to set up a new 401k plan for 2021, they are late for safe harbor for 2021, correct?

Same question for an existing PS plan that wants to add 401k feature for 2021.

There is no way to set up any plans that have safe harbor for 2021, correct?

Any 401k deferral will be subject to ADP for 2021 unless they use the 5% rule, correct?"

2 replies so far   |    Click Here to Add a Reply

Jakyasar created a topic in Correction of Plan Defects

Plan Has Not Been Attended for Years-- How to Bring Document and Operation Up to Date?

"I am not a DC person in general and was asked to do a favor to someone for a plan that is in trouble. Plan is a DC plan with deferral, 3% non-elective safe harbor and profit sharing provisions. Plan effective date is 1/1/2015. Only 5500 filing was done for 2015 but under DVFC program. I am assuming the document is a PPA document so should be OK as just needs to be updated for Cycle3 - not confirmed yet. I am not sure if any statutory amendments were required. (To be checked.) Nothing has been done since then-- no filings, no SH notices, no nothing.

As no letters have been received for missing 5500 forms yet, I am assuming that it's OK to file all missing years under DVFC, correct? I will test/check each year for contributions made (or missing) and I'm wanting to see what needs to be done if corrections are required. All may need to be done under VCP unless eligible for SCP:

  • What if SH contributions were missed and/or not correctly calculated?
  • What if any new employees were eligible and never provided deferral elections forms, SH allocations SPD etc?
  • What if PS contributions were made and plan did not satisfy 410b and/or 401a4 - formula is group-based (i.e., not safe harbor)?

Any other questions I'm not asking?"

1 reply so far   |    Click Here to Add a Reply

Dougsbpc created a topic in 401(k) Plans

Amending Plan Mid-Year to Liberalize Participation Conditions -- Newbies Now Entitled to Safe Harbor Contributions?

"Suppose you have a small 401(k) plan that provides for a safe harbor NEC. There are 4 business owners (25% each) and 10 employees (all non-key NHCEs). The plan only provides the safe harbor NEC to non-keys. For the past 4 years, 1 owner and 3 of the 10 NHCE employees have been excluded. They have a December 31 year end. The company wants to amend the plan effective November 1 to remove the exclusion for all (i.e., they want everyone to be eligible). Question: if this is done now, will the 3 NHCEs that have been excluded be entitled to the safe harbor NECs even though they will have only had 2 months to make salary deferral contributions for this year? Would we be able to include them as benefiting for the salary deferral part of the 410(b) coverage test?"

No replies yet   |    Click Here to Add a Reply

austin3515 created a topic in 401(k) Plans

Recordkeepers Who Work with Marijuana Dispensaries?

"Legal in state where the entity does business. Are there any recordkeepers who will work with these businesses?"

5 replies so far   |    Click Here to Add a Reply

RayJJohnsonJr created a topic in 401(k) Plans

Employer Used PPP Money to Pay Christmas Bonuses

"Employer used PPP money to pay Christmas bonuses in 2020. If the plan has no exclusion of bonuses from covered compensation, can these PPP funded bonuses be excluded from covered compensation? Unless there are some regs that I haven't located, I can't see how these bonuses could be excluded."

2 replies so far   |    Click Here to Add a Reply

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