Message Boards Digest

February 2, 2022

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

metsfan026 created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Fill an Entire Year's Worth of Contraceptives Through NY CCCA?

"Is anyone familiar with the NYS Comprehensive Contraception Coverage Act? I know the act allows for coverage of a contraceptive for 12 months at one time, but is it required that insurance companies comply? Or is it optional, where it can be allowed but it doesn't have to be?"

1 reply so far   |    Click Here to Add a Reply

RayRay created a topic in 401(k) Plans

Safe Harbor 401(k) Plan with Automatic Enrollment -- Can Have a QACA Even If Not Called a QACA?

"We've recently taken over as TPA for an older 401(k) plan. It has an enhanced safe harbor match and an automatic contribution arrangement, but it is not designated as an EACA or QACA. Looking at prior administration records, it looks like they've treated it as a Safe Harbor plan for purposes of the ADP/ACP and Top Heavy testing benefits, which I can certainly see the argument for. It also looks like they've met all the criteria to be a QACA without calling it one. So I'm looking at this and thinking, well, it walks and talks like a duck, so maybe its actually a QACA? And on the other hand, if it isn't a QACA, would it still have the ADP/ACP and Top Heavy testing benefits that the SH Match provide in a normal 401(k) situation? I feel like the answer to the latter is yes but I can't quite pinpoint why."

5 replies so far   |    Click Here to Add a Reply

ElaineW created a topic in Correction of Plan Defects

Profit Sharing Plan Has No Provision for 401(k) Deferrals, But Guess What Happened

"There is a plan where the existing document is profit sharing only-- it does NOT include 401(k) provisions. Well, last year they made deferrals, and according to them, they have W-2s showing deferrals. I believe, based on there being W-2s showing deferrals, that there was an intent for the plan to be amended to include deferrals, but that wasn't done. Can the plan be amended retroactively to reflect the way it was operated and would this also have to go through VCP?"

2 replies so far   |    Click Here to Add a Reply

Old Reliable created a topic in Retirement Plans in General

Partner Wants Own Plan for Her Share of Partnership Income -- ASG Issues?

"Client is a single member LLC which holds a 5% interest in a retail store organized as an LLC partnership. Her share of partnership income (all active) is reflected on K-1 to the single member LLC. Can she have her own qualified plan for her LLC income?"

No replies yet   |    Click Here to Add a Reply

austin3515 created a topic in IRAs and Roth IRAs

Application of the 5 Year Rule Rule to Inherited Roth IRAs

"Scenario 1: Participant dies AFTER meeting 5 year rule. Distributions from the Plan are tax free to the beneficiary, this much I know. What happens if the beneficiary rolls the money to an inherited IRA? Does the 5 year clock have to start over? What if the beneficiary has another Roth IRA in which they did meet the 5 year rule? Is it determined seperately?

Scenario 2: Participant dies BEFORE meeting the 5 year rule. What happens if they leave the money in the plan until the 5 year rule is met? Does that get them a tax free withdrawal? Or does the participant's first year of contributions become a moot point? What if they roll their money to an inherited IRA? Does their 5 year clock start over when they first roll the money into the inherited IRA? Even if they waited 2 years to complete the rollover?"

1 reply so far   |    Click Here to Add a Reply

BG5150 created a topic in Retirement Plans in General

Does This Vesting Schdule Wording Make Sense?

"In the plan document we are working with, the vesting schedule reads (in part):

1. 0% at less than 1 Year of Vesting Service

2. 0% at more than 1 but less than 2 Years of Vesting Service

3. 30% at more than 2 but less than 3 Years of Vesting Service

4. 60% at more than 3 but less than 4 Years of Vesting Service

If someone has 2 years of vesting service, where do they fall on the schedule? For #2, they have more than 1 year but not less than 2, so both conditions are not met. For #3, they do not have more than 2 years but they do have less than 3. Again, both conditions are not met. By the way, the previous document was much clearer:

  • 0% at 1 but less than 2 [YOS]
  • 30% at 2 but less than 3
  • 60% at 3 but less than 4"
2 replies so far   |    Click Here to Add a Reply

Pammie57 created a topic in Plan Terminations

Plan Terminated Mid-Year -- How to Fill in the Employee Census?

"A 401k plan terminated on 4/25/2021. All participants were paid out by 10/15/2021. The plan is/has been over 100 participants at time of termination due to a sale of the business.

Do we as TPA just need to request census information through 4/25/2021 because all contributions ceased then, or instead through a later date, such as 10/15/2021?

I think it's through 4/25/2021 but the auditor is suggesting the latter date."

1 reply so far   |    Click Here to Add a Reply

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