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Or, differently asked, did anyone have a duty or obligation to explain this to the plan sponsor? (And, was it explained, but the plan sponsor was inattentive?)

BG5150, thank you for the reminder to look into already published administrative law. If all is adjusted before a W-2 wage report is filed or furnished, might one say there is no failure that calls for even a self-correction?

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Is this benefit provided under an employment-based employee-benefit plan? If so, is the plan ERISA-governed? If so, one presumes the plan’s trustee or administrator must administer one’s responsibility “in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this title [I] and title IV.” ERISA § 404(a)(1)(D). Is the death benefit provided by a life insurance contract, from the plan’s trust, or from an employer’s assets? Is there a written plan? If there is a life insurance contract, does the written plan make the life insurance contract a part of the plan such that the life insurance contract also is in the writings “governing the plan”? Of “the documents and instruments governing the plan”, do they state a provision about an unlocated beneficiary? Do the documents state or omit a provision for giving up a beneficiary’s death benefit? If there is a forfeiture provision, in what circumstances does it apply? Without a supporting plan-document provision, I would be reluctant to deprive a participant-named beneficiary of a death benefit merely because the plan’s administrator has not located the beneficiary. Does the plan set a time limit on a beneficiary’s claim for the benefit? Does the plan set a time by which a death benefit must be paid, even as an involuntary payment? This is not advice to anyone.

My current provider for both val and 5500 programs had informed me of a 10% jump in monthly fees which I find a bit too high (I have been using them for 30+ years). I think I need to look into a more modern and 21st century system. I use it primarily for CB/DB and combo plans and need simple DC as well (I do not deal with RKs) as good testing system. I would appreciate your experiences with other systems (except for Relius). Thank you.

A participant of a welfare benefit fund passed away. However, his primary beneficiary has been deported and the plan officials have been unsuccessful in attempt to locate her. Can the plan treat the beneficiary as having predeceased the participant and make the benefit payable to any contingent beneficiary or, if none, the plan's default beneficiary? Alternative, can the plan treat the beneficiary as a missing beneficiary and treat the death benefit as it would with respect to any other missing participant or beneficiary under the plan?

Did no one explain this to the client during plan setup?

Is there something in EPCRS that addresses the issue of an Employer mistakenly deducting (from a paycheck) and depositing Roth funds for a participant when the ppt's election was pre-tax? In other words I would correct this int he same manner as in my example above, regardless of its relevance to catch-ups.

Someone is confused and I hope it's not me. I was reading someone's post and i believe it read "you can't avoid LTPT. I was also reading a few articles that one will never need to be concerned as long as the plan is amended, if need be, for eligibility to be eligible for plan entry to delete reference, by amendment, to elapsed time, 1 year for deferrals, safe harbor (of course) but leave the provision and any reference to 1 year/1,000 hours only to employer non-elective contribution. I'd be curious how many have done this and if not, why not.

Anyone with a different view?

QDROphile, thank you for your helpful and thought-provoking explanation.

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Yes, I'd allow.

Last time, years ago, when I explained my aversion to naming the “employer” as plan administrator, I got pushback with the perfectly reasonable explanation that with respect to “small” employers my concerns were not well founded and my recommendations were impractical. A fair point. For sole proprietors, and some other businesses with a limited number of active owners, naming the employer as plan administrator is probably not worth much worry. I hope that those active owners understand that they are fiduciaries, and what that means, including potential personal liability. With respect to more complex businesses, the concerns are based on a corporate and agency law. To avoid need for a legal treatise, the practical question to address when the employer is the plan administrator is, “Who is the fiduciary?” Or, asked another way, “Who will be the warm body sitting behind the defendant’s table in a fiduciary lawsuit?” That person has an interest in 1) knowing that they are a fiduciary because without that knowledge, it is impossible to act in accordance with fiduciary standards (attention is the first requirement of a prudent person), and 2) being covered by appropriate insurance (e.g. E&O, D&O, special ERISA policies). To illustrate, if I were a plaintiff’s lawyer or the Department of Labor pursuing a claim of fiduciary breach, and a corporation were the “employer” named as plan administrator (without further specific identification or express delegation), I would name every individual board member and executive officer personally as defendants. And let us not forget the poor HR administrator, who is always on the front line of dealing with benefits and may be a fiduciary by default because they are forced by practicalities to engage in fiduciary activity without the pleasure of being named as a fiduciary. Maybe most of those people could get themselves dismissed, but it would not be fun or happy. This is how the “small employer” exception makes sense. A single owner who also handles all executive functions is on the hook as “employer” no matter what because there is no one else to bother. That is the crux of it. How best to identify the plan administrator, and to align fiduciary responsibility, depends on the organization, its personnel, and its circumstances. There is not an arrangement that fits all, and the appropriate arrangement is often not given any thought when a plan is adopted or restated. I suspect you were asking for some specific models. I am playing the lawyers card of “it depends”.* The organization could name the “employer” as plan administrator, but then a lot of other actions and documentation would be required to achieve the proper identification and alignment. For the most part, that ain’t gonna happen. Even if it does, the Department of Labor can be so ham-fisted that it won’t understand or respect the niceties, and it likes as many people as possible to sweat personal liability. *For a corporation, how about designating the CEO as plan administrator, with authority to delegate, including the authority to designate other named fiduciaries. Depending on circumstances, the CEO will delegate authority rather than directly undertake the functions. The CEO’s corporate responsibility for oversight of company business, and fiduciary responsibility for oversight of persons the CEO names as fiduciary, overlap nicely. For a large organization, corporate or partnership (e.g. professional services), I like fiduciary committees, which can be designated as plan administrator, and populated by a CEO or equivalent. The CEO is still a fiduciary for this purpose.

Follow up to earlier thread Hello @Brian Gilmore, thanks for sharing these details. We’ve found ourselves in a very similar situation and would appreciate your guidance. During last year’s open enrollment for the current year (2025), I enrolled in a PPO plan with my employer and elected an FSA with a contribution of $1,100. I was the only one covered under that plan. At the same time, my wife enrolled in an HDHP through her employer, covered herself and our daughter, and opened an HSA. We didn’t realize then that an FSA and HSA can’t coexist between spouses. I was laid off in mid-January. My employer had already opened the FSA and deposited the full $1,100, even though only $43 was deducted from my paycheck. I didn’t learn about the account until recently when I contacted the custodian to close an old HSA. After I lost my job in January 2025, I moved to my wife’s HDHP, and she increased her HSA contributions with the goal of reaching the family limit of $8,550. After reading your thread, she has now asked her HR team to stop contributions for December. With that context, I’m hoping you can help confirm a few points: Since I lost my job in mid-January but had an active FSA at that time, were my wife’s HSA contributions still allowed for the rest of the year? If partial-year eligibility applies, is the maximum HSA contribution prorated to 11 months, meaning 11/12 of $8,550 ($7,837.50)? I haven’t used any of the $1,100 in the FSA. The FSA provider shows the account as active and says I can still use the funds. Is that correct? Thanks again for your insights, Brian. Your expertise is genuinely helpful.

I'd love the thinking of folks who are more well-versed in SIMPLEs. Company A maintains a SIMPLE IRA in 2024 & 2025; several employees of Company A create their own Company B in 2025. Company A maintained a SIMPLE IRA (I'm not sure if the SIMPLE IRA is still active); Company B established a 06/01/25 effective date SH 401(k) Plan (short Plan Year). Company A & B have different EINS with no ownership crossover. I understand that when an employer establishes a mid-year 401(k) Plan that the deferral limit is adjusted based on the # of days/365 of each arrangement. Because these are two unrelated employers, my thinking is that this does not apply to this scenario, so all EEs can contribute the total $23.5k between the two arrangements if they would like (a maximum of $16.5k being attributable to the SIMPLE IRA). Do you agree that the deferral limit for the Company B 401(k) Plan does not need to be pro-rated based on the number of days it was in existence vs. the SIMPLE IRA? Since catch-up contributions are separate to each Plan, can a 50+ participant who contributed $10k to the SIMPLE IRA under Company A defer an additional $24.5k to the Company B 401(k) Plan? ($6.5k SIMPLE deferrals, $3.5k SIMPLE catch-up, $17k 401(k) deferrals, $7.5k 401(k) catch-up) If the Company B employees are still employees of Company A and participating in the Company A SIMPLE IRA, does that matter? Or is it just a consideration in that both the non-catch up deferrals to each arrangement count towards their overall 402(g) limit? As I write this out, I imagine that a relevant consideration is whether Company B and Company A constitute an ASG. If they do, would their contributions be subject to the adjusted deferral limits based on the days/365 of each arrangement?

Hello, A former employer offered an ESOP payout in lump sum. They will be diversifying the assets for anyone who does not take the lump sum, and the investment will be into a money market account. To reframe this more concisely, my shares will be purchased back by the company prior to 12/31/2025. I know the company is likely experienced more thanv a 3X increase in share value due to their rapid growth in the past year. The most recent valuation was at 12/31/2024. Will they need to perform an interim valuation, or will my shares be valued at the 12/31/2024 value, which is almost certainly 1/3 or less of the current value of shares? Anything I should do? Wondering if there are attorneys who specialize in this area whom I should consult with, or if this is a lost cause. Thank you!

I wanted to chime in with my personal experience. I am hitting age 65, and the SSA sent me two of these forms - both related to a company I worked for and left in 1998. One shows the name of the company, and a report from 1999 that I would have a pension of $150 a month. The other shows a successor company's name, at the same administrator address as on the first form, as a 401k plan and a balance reported in 2000 of $9,700. I checked my records, and found that I had rolled over about $4,000 from that company's pension fund in 2000, and rolled over $10,000 from my 401k account at the company to my rollover IRA account in 2004. Thus, in fact, it appears I have nothing left of a pension or 401k at that company or its successor. From the discussion above, this is due to there being no requirement at that time for SSA to be updated that withdrawals occurred. Interestingly, I have been receiving a (small) pension from a company I left in 1988, and the SSA did not send a notice for that company.

Requiring that a claim be signed in the presence of a notary or under a medallion signature guarantee program might help guard against a forgery. But a plan’s administrator might prefer to follow its procedures, including its claims procedure and other plan-administration procedures. A procedure might call for a witness to a signature if the claim would result in a payment more than $100,000 or some other specified amount. If not a standard like that, could an administrator defend its requirement as no more burden than is imposed on a similarly situated claimant? Or, if the “similarly situated” is that the administrator requires a witness whenever the administrator suspects a more-than-normal probability of a false claim, what factors does the administrator use to discern that probability? Is that discretion so wide that the administrator lacks an impartial procedure? Might too much burden on presenting a claim mean that the administrator lacks a fair procedure? This is not advice to anyone.

If fraud is what’s likely being attempted, requiring a Medallion Guarantee stamp could be much better, since the stamp provider is supposed to accept financial liability for asset transfers/distributions.

The Treasury’s rule to implement § 414(v)(7)’s requirement that a higher-wage participant’s age-based catch-up deferrals must be Roth contributions includes this: “Permitted correction on Form W–2. A plan may correct a section 414(v)(7) failure by transferring the catch-up contribution (adjusted for earnings and losses in accordance with § 1.402(g)–1(e)(5)) from the participant’s pre-tax account to the participant’s designated Roth account and reporting the contribution (not adjusted for earnings and losses) as an elective deferral that is a designated Roth contribution on the participant’s Form W–2 for the year in which the elective deferral was originally excluded from the participant’s gross income. However, this correction method may be used only if the participant’s Form W–2 for that year has not been filed or furnished to the participant.” 26 C.F.R. § 1.414 (v)–2(c)(2)(ii) (final and effective, but not yet compiled). I’m wondering whether a plan’s administration may do the converse: for deferrals that need not have been processed as Roth contributions, transfer that amount (adjusted for investment gain or loss) to the participant’s non-Roth subaccount and wage-report deferral amounts accordingly (if all steps are complete before W-2s run). The Treasury’s rule doesn’t explicitly say so. Yet, it seems logical and within proper plan accounting. But I hope BenefitsLink neighbors would spot weaknesses in my logic. Here’s my hypo: A plan has only elective deferrals, no nonelective or matching contribution. The plan excludes key employees and highly-compensated employees. The plan provides no limit on elective deferrals beyond what’s needed for the plan to tax-qualify. Suppose a 62-year-old § 414(v)(7)-affected participant has specified non-Roth for all her deferrals (and, despite the employer/administrator’s efforts, has not communicated anything about her preference regarding 2026’s Roth catch-up constraint). Her instruction for deferrals—specified by dollar amount, not a percentage of any measure of compensation—is $1,375 each pay. Her deferrals for the year’s first 17 (of 26) pays are within the without-catch-up limit. The 18th pay would have most of its deferral allocated to the normal limit, but some to catch-up. And pays 19-26 would be wholly allocated to catch-up. Imagine the employer, fearing a § 414(v)(7) failure, mistakenly stops this participant’s non-Roth deferrals sooner than is necessary and, applying what the administrator assumes is a deemed election, treats as Roth contributions some of what could properly be non-Roth deferrals. The participant, still inattentive, ignores the employer/administrator’s communications. On Friday, January 1, 2027, the participant (following her New Year’s Day custom) checks, online, her plan account, and sees the unrequested amounts in Roth subaccounts. On Saturday, she asks her friend, an associate in a law firm’s employee-benefits practice, about this. After hearing him explain the essence of § 414(v)(7), she explains she prefers non-Roth, and wants to tolerate Roth only for a deferral that can’t be made as non-Roth. He suggests, cautiously, that she ask her employer whether it will adjust amounts between the Roth and non-Roth subaccounts. On Monday, the participant calls her employer. The payroll and human-resources managers both are willing to do adjustments and complete them before W-2s are run, but only if the retirement plan’s third-party administrator says it would be proper. BenefitsLink neighbors, would you suggest allowing such a Roth to non-Roth transfer? What issues am I missing?

That’s correct.

very similar to this error and correction - same correction and analysis principles under EPCRS https://www.irs.gov/retirement-plans/simple-ira-plan-fix-it-guide-you-excluded-an-eligible-employee-from-participating

https://www.irs.gov/retirement-plans/simple-ira-plan-fix-it-guide-you-used-the-wrong-compensation-definition-to-calculate-deferrals-and-contribution-to-participants-simple-iras