Message Boards Digest

February 22, 2022

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

Jakyasar created a topic in Retirement Plans in General

Any Controlled Group Issues Here?

"Joe and Mary are spouses and have no children under age 21. They do not live in a community state. Company A is owned 100% by Joe and has employees. No pension plans. Company B is owned 50/50 by Joe and Mary but Mary is not an employee. There are no other employees, just Joe. No pension plans. Company C is owned 100% by Mary and Mary is the only employee. A DB plan is in effect covering Mary only. None of these companies interact with each other and they all do different lines of work. Any controlled group issues here?"

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beiser created a topic in 409A Issues

Accelerating Vesting of Early-Exercised Stock?

"Imagine that an employee at a startup is granted a number of ISOs, which are early-exercised with an 83(b). A few years later, with those partially vested, and the fair market value of the shares substantially higher, he comes to a shared agreement with the CEO of the company to increase his stock compensation.

Is it possible to increase the rate at which the fully-exercised stock grant is vested, or would there need to be an additional grant issued at a different price to run concurrently? It's unclear to me how the early exercise would interact with 424(h)(3)(c). Were the ISOs 'options not immediately exercisable in full'?"

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jsantisi created a topic in Miscellaneous Kinds of Benefits

Workplace Health Programs Study

"The Integrated Benefits Institute released a report last week on workplace health programs and thought it may be of interest to you given your coverage of workplace and HR topics. Some highlights of IBI's analysis include:

  • Only 46% of workplaces offer health programs
  • Employers are not measuring critical metrics of success, such as absenteeism, presenteeism, and turnover
  • Only 50% of workplaces collect data at all to measure success, and half use data to decide which programs to offer
  • Offering workplace health programs can help employers gain a competitive edge in attraction/retention, especially important during the Great Resignation

For more information, the report and infographic are available on IBI's website."

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Peter Gulia created a topic in Retirement Plans in General

Might It Make Sense to Omit a Cash-Out Provision?

"In some volunteer work for a charity designing a new retirement plan, here's a question I'm thinking about.


The plan's investment alternatives are Vanguard and other managers' mutual funds, with superior share classes obtained through the (independent) recordkeeper's and its custodian's omnibus purchasing power. None of the funds pays over any revenue-sharing or other indirect compensation.

The employer pays nothing toward plan-administration expenses. (The charity's executive director and board chairperson both tell me they can't get grants or fundraise for any contribution to, or expense of, a retirement plan, and can't budget for either.) So, all expenses are charged to individuals' accounts.

The absence of an involuntary cash-out provision won't risk putting the participant count near the number that would invoke a CPA's audit of the plan's financial statements. That's so for at least the next few years.

Beyond maintaining former employees' goodwill (which the charity cares about), does such an employer have its own economic stake about whether low-balance participants involuntarily exit the plan, or may, by choice, remain in the plan? Are there factors I'm not thinking about?

For a participant who has only her $3,000 account, which is better: Staying in the former employer's plan, or choosing a rollover into an IRA? (To simplify the comparison, assume the individual has no next employer, or the next employer has no retirement plan.) Is the individual's choice as simple (mostly) as comparing the account charge under the former employer's plan to the account charge of the IRA the individual could or would buy? Or are there more factors to consider? Your thoughts?"

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Pammie57 created a topic in 401(k) Plans

Retired or Terminated for Purposes of Match

"Client sold business in 2021. They have a 401k plan with a discretionary match (calculated after year end). The three owners are over age 65 (NRA per the plan doc). The plan does not allocate the discretionary match to terminated participants. Could we consider them retired instead of terminated at the date of the sale, and allocate them a match for the year? I know at the time of the sale nobody was focusing on the plan."

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