CPSP: Introduction to Plan Operations

Question 1

What is CODA and its major principles?

Answer 1

“Cash or Deferral Arrangement”. Added in 1978 to IRC. to allow for pre-tax cash deferral. Employees allowed to receive employer contributions as a cash payment or in a CODA arrangement.

Question 2

Eligibility: What is the max waiting period for vesting/matching, if funds are immediately vested?

Answer 2

Waiting period is two years.

Question 3

What is the Last Day rule for matching contributions?

Answer 3

Participants must be employed on the day matches issued. This rule CANNOT be included in Safe Harbor Plans, and MUST be defined in the plan document.

Question 4

List the permitted exclusions from a plan:

Answer 4

1. If under 21. If has under 1 year of service, or 2 years for the employer match contributions if 100% vested. 3. If employees are covered by a Collective Bargaining Agreement. 4. Independent Contractors, unless part of a 457(b). 5. If not a legal resident. 6. Can exclude a specific group or workers based on position, but only if does not violate other limits/guidelines.