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Message Boards Digest

May 5, 2022

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

Becky Schwing created a topic in 401(k) Plans

Designate Entire $6,500 Deferral as Catch Up, So as to Avoid Top-Heavy Status?

"401k plan is TH. Owner is over age 50. Owner does NOT want to make any employer contribution to the plan for plan year. I assume the owner cannot just make a $6,500 deferral for the year without triggering the top-heavy minimum to the non-key employees. I assume there is no way to classify a $6,500 deferral as catch-up only and thus avoid TH minimum because the plan would not fail ADP or violate 415 or 402(g)."

8 replies so far   |    Click Here to Add a Reply

Coleboy1 created a topic in 401(k) Plans

Exclusion of All Per Diem Employees If Some Are Otherwise Eligible

"I have a large company whose 401k excludes per diem employees. They have a 1 year, age 21 and 1,000 hours requirement for eligibility. Some of the per diem employees have met that eligibility requirement but are still per diem. Are they still excluded from the plan? Also, there are a few employees who were eligible for the plan then later on became per diem employees. Do they lose their eligibility to contribute?"

2 replies so far   |    Click Here to Add a Reply

CDA TPA created a topic in 401(k) Plans

Can Small TPA Firms Succeed by Marketing PEPs? Join/Form an Alliance?

"My TPA firm is very small and 99% of our clients have less than 100 participants. Most have less than 40. I'm concerned that as time goes on, PEPs become more popular and my business is threatened. Is there an option for a small TPA firm to market PEPs? Can I join forces with a company that sponsors a PEP while I maintain TPA and consulting services for my clients? Thankfully, my market values local service but I'm not going to fool myself into thinking that clients won't jump ship if a PEP makes more sense for them and the popularity grows."

No replies yet   |    Click Here to Add a Reply

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

Hitting a Maximum Before Attaining Contribution Prescribed by Cash Balance Formula

"An actuary brought up the following: A TPA that he works with set up a Cash Balance Plan. They're getting a maximum that is lower than the cash balance allocation per the formula. Does that sound right?"

7 replies so far   |    Click Here to Add a Reply

DazedConfused created a topic in Correction of Plan Defects

Possible Failure to File 5500s Long Ago: To Disclose or Not to Disclose?

"Back in the late 90's I opened a 401k for my solo consulting company. That 401k had Money Purchase and Profit Sharing Keough accounts at Fidelity. At some point in the 2000's the combined values of those two accounts exceeded $100k (neither was over $100k). I believe it was the year before the limit increased to $250k for requiring 5500's. I wasn't aware of that requirement and didn't find out until years later when I closed my consulting firm. I then got a bit freaked out about the possible penalties and just left the accounts sitting there. Dumb, I know. So, I need to finally deal with this. Can you confirm that it was the combined value of those two accounts that triggered the 5500 requirement? Or did each account have to get to $100k? If it's the combined value, how would you proceed? Send the final 5500 and hope for the best? Do the DVFC and pay the fines? Write a tear-stained letter begging forgiveness? Other options?"

1 reply so far   |    Click Here to Add a Reply

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