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Message Boards Digest

October 18, 2022

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

dragondon created a topic in 401(k) Plans

Compliance Testing in Light of Mid-Year Salary Changes

"With compliance testing, what if someone changes salary mid year? Which salary is used for compliance testing and for determining NHCE and HCE thresholds? Is the salary used the one at the end of the year to determine they pass the ADP, ACP and top heavy requirements?

Also, does a plan need to pass compliance testing at each point during the year, or only at year-end?"

1 reply so far   |    Click Here to Add a Reply
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Leopurrd-401k created a topic in Humor, Inspiration, Miscellaneous

ASPPA Annual Conference 2022 -- Dress Code?

"Hey folks! I'm attending ASPPA's annual conference for the first time in 15 years. I've been advised that dress code is 'Business casual.' Are jeans and a nice shirt OK? Looking for some general guidelines so I don't stick out too much. I usually work from home and doubt leggings and a funny T-shirt are welcome. Looking forward to potentially meeting some of you folks as well! Thanks, Vicki"

1 reply so far   |    Click Here to Add a Reply

thepensionmaven created a topic in Form 5500

Can Use Form 5500-EZ If Sole Common-Law Employee Leaves During the Plan Year?

"2020 filed Form 5500-SF with Schedule SB because the owner had an employee. The employee terminated in 2021, not vested. Participant count at 12/31/2021 therefore is 1 -- the owner. Do we file Form 5500-SF, or instead file Form 5500-EZ as a 1-participant plan?"

1 reply so far   |    Click Here to Add a Reply

BG5150 created a topic in Form 5500

TPA Business Location Is In Hurricane-Affected Zone But Clients Are Nationwide

"If my TPA business is in North Carolina, or if I have employees working from home there, can I use the Ida extension for my clients who are nationwide?"

1 reply so far   |    Click Here to Add a Reply

Chaz created a topic in Cafeteria Plans

Consequences of Failing Cafeteria Plan Eligibility Nondiscrimination Test

"Hypothetical: Employer A's cafeteria plan provides for immediate entry (i.e., no waiting period) into plan. Employer A is acquiring a new company, Seller, whose cafeteria plan provides for a 60-day waiting period. The vast majority of highly compensated employees are employed by Employer A. For a number of reasons, Employer A wants to keep this eligibility structure for a while, say, six months.

Assume that Employer A is taking the conservative approach that this violates the eligibility portion of the cafeteria plan nondiscrimination tests. (I recognize that there are those in this forum that take the very reasonable position that this structure would not violate these tests because it is the underlying benefit that has a waiting period, not the cafeteria plan.)

[1] What highly compensated employees would be affected (i.e., incur extra taxes) by this nondiscrimination failure? Just ones who are hired by Employer A during the six month period and who can enroll in plan without the waiting period? All highly compensated employees who elected to pay for qualified benefits on a pre-tax basis? All highly compensated employees whether or not they elected to do so? What if no employee is hired at Seller during that period?

[2] For those who are affected, for what amount will they be subject to extra taxes? Is it based on their full election for the year or for only the two-month waiting period that they are not subject to?"

1 reply so far   |    Click Here to Add a Reply

JOH created a topic in Governmental Plans

FICA Alt Plan Into Which Employer Made Contributions for Ineligible Employee

"I have a FICA Alt plan established under a 457 plan. The employer made 3 contributions (contributions were done in 2022 and just recently) for an employee who was no longer eligible to participate in the plan.

Can the employer request the funds back and can we just send the funds back to them? I'm not sure this is allowed for FICA Alt plans."

1 reply so far   |    Click Here to Add a Reply

KEC79 created a topic in Retirement Plans in General

Deadline for Determination Letter Application for Initial Qualification of Individually Designed Plan?

"Is there a specific deadline for requesting a determination letter for the initial qualification of a new individually designed plan? The instructions to Form 5300 do not appear to contain a deadline, nor does Rev. Proc. 2022-4. By contrast, there are specific deadlines for determination applications for merged plans."

No replies yet   |    Click Here to Add a Reply

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