Message Boards Digest

August 26, 2022

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

Belgarath created a topic in Other Kinds of Welfare Benefit Plans

Is a "Retiree Medical Reimbursement Plan" the same as an HRA?

"It seems to me that it isn't, as the "Retiree" arrangement allows participant voluntary after-tax contributions, whereas the HRA's are, as far as I know, employer-funded only. I don't work with Health Insurance plans at all, and I'm finding the available information pretty fragmented and confusing. Is there a source that anyone knows of that gives a good, solid explanation of what these plans are, and the "rules" in relatively succinct form? Thanks."
No replies yet   |    Click Here to Add a Reply

Jakyasar created a topic in 401(k) Plans

Fiscal plan deferral limit

"Hi Plan year is 7/1/2021 to 6/30/2022 Limitation year is plan year. What is the 401k deferral limit? Thanks"
1 reply so far   |    Click Here to Add a Reply

Steve created a topic in Cafeteria Plans

Eligibility requirements

"The employer maintains a health plan that provides for immediate eligibility to officers of the company and all other employees are required to complete 60 days of service. Thus, eligibility for the cafeteria plan is tied to eligibility for the health plan. Does the bifurcated eligibility requirement for the cafeteria plan violate nondiscrimination?"
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Ananda created a topic in 401(k) Plans

Participant wants to change distribution election

"A plan participant in a 401(k) plan elected a lump sum distribution upon termination of employment. However, he has changed his mind and now wants an annuity payout option offered by the plan. He has not cashed his distribution check. It seems that since the check was not cashed that these are still plan assets and he should be entitled to make another distribution election. However, I can also argue that once the election is made its final. Any thoughts."
7 replies so far   |    Click Here to Add a Reply

PensionPro created a topic in Distributions and Loans, Other than QDROs

Plan Loan and Change in Controlled Group status

"Participant takes 50k loan from two plans sponsored by unrelated employers. Subsequently, the unrelated employers become a controlled group, and now the participant has loans that exceed 50k from the new controlled group. Is there a violation and how to fix it? My initial thought is there is no violation, but want to get other opinions. Thanks."
2 replies so far   |    Click Here to Add a Reply

pixiebear created a topic in Plan Terminations

PBGC Plan Term filing after annuities purchased

"We have a defined benefit plan with 21 retirees and no active participants. The employer wants to purchase annuities for the retirees now however we feel they should go through the PBGC plan termination process first. Can they purchase the annuities now, pay out the retirees and then file with the PBGC with 0 participants and $0 assets? The employer has not initiated any formal plan termination process."
1 reply so far   |    Click Here to Add a Reply

metsfan026 created a topic in 401(k) Plans

Dual-Qualified Plan in Puerto Rico

"Does anyone know what's involved in getting a plan to become a dual-qualified plan so a person who lives in Puerto Rico could be eligible?"

3 replies so far   |    Click Here to Add a Reply

PS created a topic in Plan Terminations

Term date

"Hi, Plan terminated due to asset sale and the termination date was 06/30/2022. the client failed the 415 testing because the testing was done for the period 01/01/2022-06/30/2022, since the plan failed testing they want to change the termination date to 09/30/2022. as per the client if they had the termination date been set at September 30, 2022, the prorated annual limit of $61,000 would have been $45,750 and the 415 Total Excess column on the far right of this calculation would have been $0 for everyone. The termination process has already been started and notification has been sent to participants and participants have already started requesting for distribution. Can they change the term date now? what will be the repercussion? Thank you."
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Santo Gold created a topic in 403(b) Plans, Accounts or Annuities

Do 403b plans have trustees?

"We have several 403b plans and none have a named trustee. The document software that we use does not even permit a trustee designation. Yet, we are being asked for a trustee by a new recordkeeper that the plan is transitioning to. Any thoughts? Thank you"
1 reply so far   |    Click Here to Add a Reply

cpc0506 created a topic in 401(k) Plans

Changing QACA percentage mid-year

"Client has a calendar year QACA plan with QACA statutory minimum schedule. They would like to change to schedule to 6% QACA no escalation and would like to do it effective 10/1/22. Is this allowed mid year? And to whom do the new provisions apply? In other word, if employee A was auto-enrolled under prior schedule and is now at 5% deferral rate, does he need to be increased to 6% effective with amendment change or can he stay on the old schedule and just auto-increase at next increase date? Thanks in advance for your reply."
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L. S. created a topic in Retirement Plans in General

No Plan Assets in 2020 - CARES Act Amendment still required?

"We have come across an interesting situation and I'm hoping for some insight here. A client who had a plan formed (i.e. plan document executed) in 2019 has not actively used the plan (i.e. zero contributions made) yet and has been generally non-responsive to our notices regarding the Cycle 3 restatement, etc. They have now recently resurfaced and want to start actively using the plan. This is a new business (formed in 2019) with no new employees (yet). It is my understanding that the Cycle 3 restatement (under SCP) and SECURE Act amendment will need to be completed. However, my uncertainty is surrounding the CARES Act amendment. Since there were no funds in the plan, and no other eligible employees (other than the owner), there was no option to allow for coronavirus-related distributions or loans and there were no options for RMDs. Would the CARES Act amendment still be required?"
3 replies so far   |    Click Here to Add a Reply

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