Message Boards Digest

February 28, 2023

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

EPCRSGuru created a topic in 401(k) Plans

Refund Due to Participant Election Error?

"We have a participant who intended to make a salary deferral election effective January 2023, but submitted it too soon so it was implemented effective December 2022. They asked us TODAY to refund it. I can't find any legal justification for refunding it to them -- it was a valid, although premature election; they did not exceed any IRS limits and they have no distributable events. They are under 59 1/2. Is there a loophole I am missing?"

6 replies so far   |    Click Here to Add a Reply

Jakyasar created a topic in Defined Benefit Plans, Including Cash Balance

Funding Calculation for DB Plan with Life Insurance

"DB plan with whole life insurance. Calendar plan Insurance contract/effective May 2022 and with 30k annual premium, no other illustration was provided. In December found out that premium payments were being made monthly 2.5k/month so during calendar 2022, 8 payments were made for a total of 20k, all from the corporation. I have always used premiums paid only during the plan year but now the agent is pushing me to use 4 additional payments made/to be made in 2023 so that the total of 30k is applied to 2022. I understand that they are contributions to be discounted to val date but my concern is the valuation of the CV as of the val date -- EOY val. I have the 12/31/2022 CV from the insurance company and did the RP 2005-25 calculation. No issue if I was using what was paid in 2022 only. How do you incorporate the payments made in 2023 to 12/31/2022 val date and determine what the 12/31/2022 CV would be under RP 2005-25? As they are planning to make the minimum required contribution, a proper determination of all assets is imperative."

2 replies so far   |    Click Here to Add a Reply

30Rock created a topic in Plan Terminations

Plan Termination and Small Accounts with Non-Vested Amounts

"I have a plan that is freezing on 3/4/23 with 100% vesting of all account balances as of that date, and then terminating on 3/31/23. There are small accounts $5000 and under for terminated participants that have not been cashed out yet and the recordkeeper informs us that there is no time to do the normal cash-out process where a distribution package is mailed to the terminated participants (with normally a 30 day period to respond or the account will be automatically rolled over to the IRA) and therefore the non-vested amounts cannot be forfeited. Can we forfeit the non-vested amounts prior to the 3/4 freeze date without a corresponding cash-out process? They will get the termination package after the 3/31 termination date."

2 replies so far   |    Click Here to Add a Reply, Inc.
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