Message Boards Digest

March 28, 2023

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

ASFESQ created a topic in Retirement Plans in General

Lifetime Income Illustration

"Last year, someone was generous enough to post the 12/31/2021 actuarial equivalents for a J/S and an individual life annuity for an account balance at age 67. I was wondering if anyone would do the same for 12/31/2022?"
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dom123 created a topic in 401(k) Plans

Terminated Plan Failed ADP/ACP Testing

"The plan terminated and assets have been liquidated from record keeper. The plan failed ADP/ACP testing with two participants requiring employer match funds to be returned to the plan. My understanding is once the two participants transfer the employer match funds back into the forfeiture account (via rollover from participant's IRA), those funds will get evenly distributed amongst participants who had balances as of the date of the plan termination. Is this correct? Alternatively, what would happen if the plan decides to do nothing? What penalties will incur? The employer funds only total $900 and if distributed amongst participants, the participants would receive very low amounts."

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

Unterminating DB with PBGC Coverage

"PBGC covered plan, terminated 12/31/2022 500 is not yet done/filed with PBGC. Sponsor changed their mind, wants to continue. Can a simple notice to the participants stating 'we decided not to terminate the plan' would be sufficient? I will amend the plan later to unfreeze the benefits. When terminated all became 100% vested (plan was only 3 years old and all would have been only 40% vested if not terminated). I cannot find any written document of making everyone 40% again with the reversal of termination. Anyone knows if possible?"

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M_2015 created a topic in 401(k) Plans

Service Requirement for Safe Harbor Plan

"Can a plan impose a service condition that is longer than 12 months for receive safe harbor matching contributions?"

4 replies so far   |    Click Here to Add a Reply

Belgarath created a topic in Cafeteria Plans

COBRA Information and SPD

"Suppose a Section 125 plan provides only FSA and DCAP. They also have a 'cash in lieu' option where anyone eligible for the company group health insurance can either have a certain amount contributed to the 125 plan to be used for benefits, or they can elect to receive it in cash, taxable in their normal paychecks. The COBRA provisions, if applicable, are 'administered' by a third party. Is it allowable for the employer to attach to the SPD a written COBRA explanation provided by the third party? Or must it be in the SPD as part of a self-contained single document? I don't, EVER, have anything whatsoever to do with COBRA, so I essentially know nothing about how COBRA information must be presented. Employer is a retirement plan client of ours, so I'm trying to assist them somewhat with questions, but this is out of my bailiwick. I don't think the the third party 'administrator' is apparently being very helpful, or necessarily even doing documents -- not like a typical TPA in the retirement plan world. Their 125 document provider from way back is long gone."

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Les Bleus created a topic in 401(k) Plans

LTPT Employees and 401(k) -- Service Counted Prior to January 1, 2023?

"Hi All, Could someone please help me derive why service prior to January 1, 2023 is counted for 401(k) LTPTs? Section 125 of Secure 2.0 Act states that 12-month periods beginning before January 1, 2023 shall not be taken into account, but the consensus seems that this is only applicable to 403(b) plans. I am not following this."

1 reply so far   |    Click Here to Add a Reply

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