Message Boards Digest

June 7, 2022

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

MrsMacias created a topic in 401(k) Plans

When Is It Appropriate to Do a Spin-Off 401(k)?

"We have a client (A) that purchased a division of another company (B) and wants the employees of that division to "merge" into A's existing 401(k) plan. B's TPA told our client (A) that they could do a spin-off. Our general understanding of a spin-off is that it results in a new company and a new 401(k) plan. Neither of those things are happening. Additionally, company (B) currently sponsors a 401(k) plan and since only one division was sold to our client they will not be terminating their plan. We don't see how this could be treated as a spin-off or a merger. Can anyone give insight as to when a spin-off is an appropriate measure and if there is anyway that this would not be a distributable event for the participants of Company (B)? Thank you!"

2 replies so far   |    Click Here to Add a Reply

Thomas Red created a topic in 401(k) Plans

Plan Wants to Amend Eligibility Requirements to Benefit One Employee

"I have a plan sponsor that wants to amend the eligibility requirements and entry dates to allow a specific employee to enter the plan. After that employee enters the plan, the plan sponsor wants to amend the eligibility requirements and entry dates back to what they were. Is this allowed? If not, why?"

7 replies so far   |    Click Here to Add a Reply

lsell created a topic in Governmental Plans

Preapproved 401(a) Plan - Deadline for Adopting Amendment for Final Hardship Reg/ BBA '18?

"Hoping someone can share their knowledge as to the deadline for adopting an amendment to a preapproved governmental 401(a) plan to update the plan document for the final hardship regs/BBA '18. Thanks!"

No replies yet   |    Click Here to Add a Reply

Debb created a topic in Health Savings Accounts (HSAs)

Mandatory HSA Contributions

"Is it legal for an employer to mandate a minimum annual HSA contribution from its HDHP-participating employees? Employee HSA contributions are deducted from employee paychecks on a pre-tax basis via a cafeteria plan."
3 replies so far   |    Click Here to Add a Reply

AlbanyConsultant created a topic in 401(k) Plans

Interim Valuation - Do All Participants Need Statements?

"I've got a calendar-year pooled 401k/PS plan where the trustee has asked for an interim valuation because the assets have (of course) dropped by a significant percentage since 12/31/21 and participants with a significant total of the plan's assets are looking to take a distribution. I've already gone over the pros and cons, the "if you do it when it's down, you should make sure you consider doing it when it's up" speech, etc. My Q is... obviously, the terminated participants who are looking for a distribution should get updated statements to reflect the updated amounts that are going to be distributed to them. But what about the active participants (who are not eligible for a termination distribution)? Is there any reason to give them statements as of 5/31/22 that show this ~20% drop in value? Since it's not EOY, do they need to get this interim valuation statement? The plan allows no ISWs or hardships (except RMDs, which wouldn't be affected by this interim valuation). Thanks."

3 replies so far   |    Click Here to Add a Reply

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