Message Boards Digest

May 10, 2022

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

Cloudy created a topic in Cross-Tested Plans

Testing Compensation When Excluded Reimbursements Apply Only to Owners

"Plan definition of compensation excludes reimbursements, etc. The only participants that have a reduced compensation for 2021 are both owners, so I don't think there is any problem in terms of 414(s). For the purpose of 401(a)(4) testing (on a benefits basis), do I have the option of using total compensation as testing comp? In this circumstance that would create an advantage since it's only 2 HCE's that have plan comp less than total comp."

1 reply so far   |    Click Here to Add a Reply

austin3515 created a topic in 401(k) Plans

EPCRS Missed Deferral Opportunity

"From EPCRS Appendix A .05(2)(b):

'Under this correction method, a plan may not be treated as two separate plans, one covering otherwise excludable employees and the other covering all other employees (as permitted in §1.410(b)-6(b)(3)) in order to reduce the applicable ADP, the corresponding missed deferral, and the required QNEC.'

This has always made my mind bend in uncomfortable directions because testing everyone together (i.e., not testing OE's separately) always reduces the ADP for the NHCE's and thus reduces the correction. I am never excluding the otherwise excludables 'in order to reduce the corection.' Excluding the otherwise excludables would INCREASE the correction? Is it possible the authors just don't know anything about running ADP tests?"

7 replies so far   |    Click Here to Add a Reply

mark Scherer created a topic in Defined Benefit Plans, Including Cash Balance

To Pass 401(a)(26), Make a Higher-Than-Required Allocation to a Particular Non-HCE?

"In order to pass 401(a)(26), can I give one particular non-highly fully employed participant a greater benefit even though it's not the stated formula in the plan?"

2 replies so far   |    Click Here to Add a Reply

R. Butler created a topic in Retirement Plans in General

410(b)(6) Transition Period

"Company A acquires Company B in a stock acquisition. Employees of Company are immediately moved to Company A, Company B dissolves. Company A sponsors a retirement plan; the plan does contain provisions that employees acquired in a 410(b)(6) transaction are excluded through the transition period.

[1] Does the fact that employee were transferred to Company A negate the transition period in regards to those employees? I don't think it does. The employees were still acquired as part of a 410(b)(6) transaction; it is essentially what happens in an asset sale.

[2] Company A's plan was restated for Cycle 3 after the acquisition; no change in coverage as a result of the amendment. Does the restatement end the transition period? I am thinking that the restatement does not end the transition period, but I am a little more uneasy about this part."

1 reply so far   |    Click Here to Add a Reply

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