Inside The Plan

FAQs with TPA Melissa Terito

May 19, 2020

In this episode of Inside the Plan with the 401(k) Brothers, Bill Bush and Andy Bush, advisors at Horizon Financial Group, talk with Melissa Terito, CPA, Partner and Third-Party Administrator at Sentinel Pension about some frequently asked questions that plan sponsors have been reaching out to her with.

Episode Highlights:

  • 00:37 – Bill Bush and Andy Bush introduce Melissa Terito.
  • 01:21 – How does COVID-19 sick pay play into what is counted as wages?
  • 02:57 – When can a participant get back in after dropping below zero on


  • 04:31 – What can be done with plans that have safe harbor contributions?
  • 06:42 – What if more than 20% of the employees are terminated, does that

                        mean that everyone becomes 100% vested in the plan?

  • 07:36 – Can you pre-fund retirement contributions to an unallocate account?
  • 08:52 – If a plan didn’t adopt the coronavirus-related distribution or the expanded loan provision, but a participant wanted to take a distribution, could they still do that and classify it as a coronavirus distribution?
  • 11:22 – Where is the talk of a triple contribution limit increase coming from?
  • 14:28 – Melissa has been impressed with her team at Sentinel.

3 Key Points:

  1. With the Family’s First Coronavirus Response Act, if an employee qualifies for sick pay, those wages are subject to 401(k).
  2. Once you suspend your safe harbor, you no longer have the top-heavy relief, which means you may have to make at least a 3% contribution.
  3. Communication with clients is highly important, especially during the uncertainty caused by the pandemic.

Tweetable Quotes:

  • “The Family’s First Coronavirus Response Act basically expanded on sick pay that you have to pay employees in family medical leave.” – Melissa Terito
  • “First, and foremost, if you have received a PPP loan and you are making your safe harbor match on a per-payroll basis, keep making the match, because those benefits are included in your PPP loan.” – Melissa Terito
  • “A partial plan termination is going to be based upon the entire plan year.” – Melissa Terito

Resources Mentioned: