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Message Boards Digest

November 23, 2021

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

BG5150 created a topic in Form 5500

Annoyed Thought: Auditors Who Ask for Prior 5500's

"Why do auditors ask for prior year 5500's? All the filings going back to 2009 are online, and can be downloaded in an instant."

5 replies so far   |    Click Here to Add a Reply

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

Frozen Plan and 401(a)(26) Testing

"It's been quite a few years that I had a frozen DB plan to deal with and 401(a)(26) testing so a bit rusty. Plan is 3 years old and frozen beginning in 2021 -- hard freeze, i.e., both participation and benefit accruals. It is EOY valuation. No terminations/pay outs for the past 3 years. It's top heavy and PBGC-covered.

How do I determine if 401(a)(26) is required for 2021 for the following data as of 12/31/2021?

Assets: 350k

FT: $340k

Lump sum @ plan AE: $355k (assume 100% vesting although everyone is at 40%)

Lump sum at 417e: $580k (assume 100% vesting although everyone is at 40%)

2020 SB FTAP: 138%

2021 AFTAP: 105%

2020 SB line 16 - prior year funding %: 80%

What say you? Thanks"

No replies yet   |    Click Here to Add a Reply

BG5150 created a topic in 401(k) Plans

Adding 3% Safe Harbor -- Notice Needed First Time?

"I know that the 3% Safe Harbor notices are no longer needed. But what about an existing plan that is adding it? Do they have to give a notice the first time? If we do an SMM, it's not due until 210 after the plan year of the amendment! Same thing for an SPD of an in-effect plan. What about a start-up plan? Is a notice due? Or will the SPD suffice?"

No replies yet   |    Click Here to Add a Reply

metsfan026 created a topic in Retirement Plans in General

Income Tax on Disability Benefits

"This is definitely not in my wheel house. Does anyone have any information? I truly appreciate it:

I was approved for my disability claim. I do not think they are computing the correct amount that is taxable on one of my benefits, which is also the largest. $3500 a month was paid by Cornell, so that is taxable. But the $21500 was paid by me in after-tax dollars. Based on my understanding, then only 14% should be taxable. However, Cornell told the Hartford that 48% is taxable and they are withholding and will likely report this to the IRS.

When I questioned this, HR's reply was: 'There is a standard formula that applies to Long Term Disability payments based on IRS Section 105(a). It takes the average of two years of the total premiums contributed by the employer and all employees and finds a ratio between the two. WCM ratio is 48.27% taxable and 51.73% non-taxable.'"

No replies yet   |    Click Here to Add a Reply

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Remote

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Paychex, Inc.
Rochester NY / Phoenix AZ

View job as Retirement Plan Consultant

Retirement Plan Consultant  View details

Qualified Plan Administrators, Inc.
Remote / Greensboro NC

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Enrolled Actuary  View details

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