Message Boards Digest

November 8, 2022

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

RatherBeGolfing created a topic in 401(k) Plans

Leased employee?

"Dr. Acula had a practice with several full time employees. Dr. Acula leases a small space in the offices of Dr. Van Helsing. At some point Dr. Van Helsing takes over as the employer of Dr. Acula's employees. As part of this agreement, the two parties agree that Dr. Van Helsing will make his staff available to Dr. Acula for up to 30 hours per month at a set rate. The staff that will help Dr. Acula could be one of his old employees or a staff member who has always worked for Dr. Van Helsing, or any combination thereof. Question Does the prior service to Dr. Acula satisfy the leased employee condition that he or she has performed such services for the recipient (or the recipient and related persons) on a substantially full-time basis for at least one year? Thanks!"
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dragondon created a topic in 401(k) Plans

Difference between determining non elective at end of plan year or per pay period

"If a company may need to make a non elective to pass non discrimination testing at the end of the year does it matter in the plan docs if the non elective contributions are determined at the end of plan year or each pay period? I suppose per pay period would give them the option to do it earlier then end of plan year but wanted to make sure there are not other drawbacks to doing per pay period instead of end of plan year?"
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dragondon created a topic in 401(k) Plans

How to determine HCE if the company did not have payroll in the prior year?

"How do we determine who is an HCE if the company did not exist in the "look back" year?"
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Basically created a topic in SEP, SARSEP and SIMPLE Plans

Simple 401(k) (basics)

"I understand Simple IRA plans. Setup is an IRS form 5304 or 5305 depending on where the money is invested. Contributions are put in an IRA in the participant's name. I don't handle them. So what is a Simple 401(k)? Basically a 401(k) with only a 3% match or a 2% NEC?
  • For setup I see on the ftWilliam system there is a toggle to designate the 401(k) as a Simple
  • A 5500 is required. A 5500-SF? Same filing deadline?
  • You have to pull together all the financial info to prepare the 5500, Is an annual report prepared, participant statements?
Is it really just a "vanilla" as it can get 401(k) with Simple IRA eligibility requirements, no testing, no PS contribution?"
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Tom created a topic in 401(k) Plans

Flexible Discretionary Match - allocation groups and plan document

"Client restated for Cycle 3 in 2022 and after much discussion decided on the Flexible Discretionary Match primarily because they wanted 2 different match allocation groups. They are matching 100% of 2.5% for NHCEs and 100% of 1% for HCEs on a pay period basis. My understanding is the first notice is required for the 2023 plan year and within 60 days of making the final match contribution so likely in March 2024. First question - is the allocation groups they chose - HCE and NHCE, not job related necessarily. We can change that to define positions that are HCE if we have to such as CEO, COO, CFO, HR Director, etc. Do you think HCE and NHCE is ok? There are no working owners and so it is just prior year comp based. Secondly - under flexible match, must the match allocation groups be mentioned in the plan adoption agreement? Or can that be left unmentioned since this is a discretionary match and the notice isn't due until after the end of the year? This is the only flexible discretionary match client we have - fortunately. Thank you Tom"
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