Message Boards Digest

May 2, 2023

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

BG5150 created a topic in 403(b) Plans, Accounts or Annuities

Eligibility After Reduction in Scheduled Hours of Work

"403(b Plan EXCLUDES employees who normally work less than 20 hours a week. Employee was working full time for a few years and now is on an abbreviated schedule of 15 hours a week. Question: Does this person continue as a participant in the plan? Or are they now no longer a participant because they are in an excluded class?"

3 replies so far   |    Click Here to Add a Reply

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

Uncashed Checks for Small Distributions

"This NOT a plan termination. Participants terminate employment, get their 402(f) notice, and notification that if they don't respond within 30 days, they will receive a lump sum cash payment. (This would be for accounts less than $1,000.) Some of these accounts could be Roth. Some amount of time passes. Let's say at least until the following calendar year. I'm not at all sure proper steps have been taken (internet search, etc., etc. as outlined in DOL FAB 2014-01) to determine if these people qualify as 'missing participants.' 'Missing participants' where the amount is less than $1,000 have a specific procedure in the plan language -- basically, roll to an IRA or treat as a forfeiture. So, these are 'unresponsive' participants -- they just have never cashed the the checks. Now the Plan Administrator decides to have these amounts rolled to an IRA. My question is twofold -- first, is this allowable? Second, if so, or at least defensible, how to report? The distribution has already been reported, and if taxable, has been taxed. Interested in what people perceive as a 'best solution' where it appears that no solution is perfect."

8 replies so far   |    Click Here to Add a Reply

legort69 created a topic in 401(k) Plans

SECURE 2.0 Roth Catch-Up for HPEs: Payroll or TPA Monitoring Function?

"My thoughts are that the primary responsibility for determining an HPE and remitting Roth Catch-Up for Highly Paid Employees is mostly a payroll function. The TPA/Recordkeeper may be able to add processes and tools and communications to facilitate the proper administration, but ultimately the payroll companies will have to enhance their systems to accommodate this SECURE 2.0 provision. I am curious to know where the 401k community lands on this process?"

2 replies so far   |    Click Here to Add a Reply

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

Plan Requires RMDs by January 1 Not April?

"I have a plan where the required distribution language reads 'by January 1st of the calendar year following the calendar year in which he/she attains the age of [70-1/2]'. I suppose this qualifies as meeting the RMD requirements, but it struck me as odd and wanted to ask around and see if I was missing something. Can a plan sponsor select a slightly earlier date for the RMDs and not run afoul of the rules? (They must have gotten a determination letter at some point, so it passed muster in this form.) It's an ESOP if it matters. (And I'm putting aside the SECURE 2.0 Act's updates to the ages for now.)"

2 replies so far   |    Click Here to Add a Reply

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