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The DOL's missed filing rules are here: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/correction-programs/dfvcp

Sounds like you should do the AE adjustment from March to December on the benefit, and then calculate the lump sum as of December based on the adjusted benefit.

According to the ERISA Outline Book, the IRS took the position at a conference that you count ADP/ACP, but had no opinion on 402g excess. (The book's discussion also suggested you wouldn't count 415 excess distributions, since those were never proper annual additions to begin with.)

That was my thought, too - you can do it but you have lots of other things to pass, the ADP not one of them.

Totally agree that this will be a meaningful benefit. Do we think nondiscrimination rules will apply? I imagine that highly compensated would be much more likely to take advantage of this.

Thanks again to responders! We decided to provide the former participant with a letter stating that as a former participant with no benefits in the plan now, she is not entitled to receive an SPD at this time. We provided a copy of the last statement she received which reflected the amount she was paid along with the check number and date of her benefit check which was rolled over to an IRA. We stated that we do not maintain historical copies of SPDs. We think she met with SSA in-person as she was never reported on Form SSA which would explain why her request was stated the way it was. We do have copies of historical plan documents but did not provide that to her.

Thank you, that was what I was wondering about...but couldn't exactly work out how to do. Have a nice Holiday Season!

The issue of former cashed-out participants thinking they have money in a plan is almost always prompted by the DOL trying to be a hero. We haven't yet had money laying around for one of these former employees. Even so, it's a good reminder to keep a distribution paper trail. In the above case, I suspect the former employee will go away she's reminded of her past distribution + I'd send the SPD if available.

If you're going to offer a match to 457(b) contributions, you want the match to go into a 401(a) plan. That could be the existing one, but with a separate benefit structure for the part-time employees, or a new one. The problem here is that the 402(g) limit ($23,500 in 2025, disregarding catch-ups) for 401(k) and 403(b) plans applies only to the employee's own contributions. However, the comparable limit for 457(b) plans applies to the aggregate of employee and employer contributions. So for example, if the employer is doing a 100% match and putting it all into the 457(b) plan, the employee could contribute a maximum of $11,750. That would give rise to an employer match of $11,750, and the employer and employee contributions together would equal the $23,500 limit. However, if the employer match goes to a 401(a) plan, the employee could contribute up to $23,500 to the 457(b) plan, because the contributions to the 401(a) plan would not count against the limit.

I’ve encountered a similar situation. A Form 5500-EZ was filed for one participant plan. However, we discovered months later that they hired an employee who is paid via W-2 wages and became immediately eligible on their hire date. Consequently, a Form 5500-SF should have been filed. Could you please explain the correction method and any applicable fines or penalties for correcting this error for a PYE on December 31, 2024? The 5500-EZ that was filed should have been a 5500-SF.

What if the client has a 360 or 180 payroll integration between their payroll company and the recordkeeper? I would think that the indicator could be placed in the file layout so when it goes to the record keeper it is updated. They could also include prior year FICA wages in the file layout if the recordkeeper has the capability to track that somewhere. also, how are fiscal year end plans being handled (for instance a 9/30/2025 PYE)??

vested account balance.

Hi All, Happy Holidays to All. A DB plan ret age is 62. Employee retirement date was march 2025 but did not receive his lump sum until Dec 2025. He was entitled to his lump sum since March 2025. What rate would you use to give interest on the lump sum from march 25 to Dec 25? Plan equivalence? Thank you

Not entirely. I have seen that ... see below from DOL website... this is just part of the notice. Based on her response, she could simply be looking for "lost" retirement benefits.

Thanks for the comments. It appears that the letter may have been prompted by her application for SS benefits as she states "as recommended by the SSA" in her letter. I am unaware of any such comment in the SSA letters I've seen. She further states that the US DOL EBSA has requested that she obtain the SPD. This is ridiculous.

The concept of a recordkeeper requesting an indicator is separate from administering Roth catch-ups. As the honorable WCC notes the recordkeepers want the indicator for targeted communications and also for monitoring after end of the year. But I am not aware of any recordkeepers doing more than that- so in reality regardless of whether an indicator is shared with the recordkeeper payroll providers are effectively responsible for the administration.

Yeah, I don't know of any plan sponsors that do this on their own. I know Fidelity does it and I know some other recordkeepers that use third-party vendors such as BenefitEd, Highway Benefits, SoFi at Work, and Candidly to verify student loan payments, etc. for qualified plans.

ERISA §101 Duty of disclosure and reporting states: (a) Summary plan description and information to be furnished to participants and beneficiaries. The administrator of each employee benefit plan shall cause to be furnished in accordance with section 104(b) [29 USC §1024(b) ] to each participant covered under the plan and to each beneficiary who is receiving benefits under the plan Section 3(7) of ERISA, "participant" means “any employee or former employee of an employer, …., who is or may become eligible to receive a benefit … or whose beneficiaries may be eligible to receive any such benefit” ERISA Reg. 2510.3-3(d) provides: (1)(ii) An individual becomes a participant covered under an employee pension plan-- (A) In the case of a plan which provides for employee contributions or defines participation to include employees who have not yet retired, on the earlier of-- (1) The date on which the individual makes a contribution, whether voluntary or mandatory, or (2) The date designated by the plan as the date on which the individual has satisfied the plan's age and service requirements for participation. My understanding of these rules are that once an employee contributes money to the plan they are a participant. Once their funds are distributed from the plan, then they are no longer participants (assuming they are not still eligible to contribute to the plan) and they would not have any beneficiaries eligible for a benefit under the plan. Here, you state they are a “former” employee who has taken a full distribution. Presumably that means they are no longer eligible to contribute to the plan. At the point they take the distribution (and are not eligible) they are no longer required to receive an SPD. However, to the extent they can still make a viable claim for benefits under the plan, it seems an SPD should be provided to a former participant as an SPD almost by definition is a document that would be relevant to their claim. Assuming the applicable plan does not have a statute of limitations provision, I have no knowledge of a state that would provide a statute of limitations that would permit a claim for benefits 20 years after the benefit distribution has been made… but I guess there could be one.... That said, like @Peter Gulia states… you should likely lawyer up

Question: For the purpose of calculating the top heavy balances, are adp/acp corrective distributions added back in? Plan failed 2024 ADP/ACP testing: HCE/Key employees adp/acp corrective distributions of $5,000. These were corrected on 3/1/2025. When looking to add back in "In-Service" distributions, would these be considered that for top heavy balance for the 2025 determination? Or excluded from the Top Heavy balance. My argument is that these distributions were forced distributions because of the failing ADP/ACP test. The participant did not have the option not to take it, so why should it be added back in? Thoughts?

That a plan’s administrator received a certified letter suggests it might be wise to lawyer-up. Even if ERISA § 104(b)(4) alone might not require furnishing an SPD earlier than “the latest updated summary[] plan description” and SMM, a fiduciary might want its lawyer’s advice about whether duties of loyalty and communication call the fiduciary to furnish an older SPD (if the administrator still has that document), and about whether it’s wise or unwise to furnish it. This is not advice to anyone.

Before getting into the Safe Harbor question - Does the service component pass benefits, rights, and features testing? Is the service based match formula discriminatory in favor of HCE? If the HCE are getting(or even more likely to get, even if not actually receiving it) the higher formula, and not the lower formula, does that pass non-discrimination testing? If a discretionary match is within the ACP safe harbor parameters - my understanding is that it has to utilize a formula that is non discriminatory. If it does that, AND is within the extra parameters, then it is possible to preserve the automatic pass on ACP testing that the safe harbor match portion provides. A service based formula (for match, or nonelective) in and of itself - is not automatically discriminatory. But for things like an employer nonelective would typically be subject to 401(a)(4) testing. So similar questions have to be asked about Match. I hope others will provide more specific insight.

Consider that a plan might provide several different measures of compensation with different purposes and uses. That § 415(c)(3) compensation for applying an annual-additions limit might exclude a parsonage allowance [see IRS Ltr. Rul. 2001-35-045 (issued June 7, 2001, released Sep. 2001) (interpreting then 26 C.F.R. § 1.415-2(d)(3)(iv), now 26 § 1.415(c)-2(c)(4)] does not by itself mean other measures exclude the parsonage allowance. A plan might use a distinct measure of compensation to determine allocations of a nonelective contribution. And might use a yet different measure to determine participant contributions. A plan’s definition of compensation that counts a parsonage allowance could not be contrary to ERISA’s title I because that law does not apply to a church plan that has not elected to be ERISA-governed. Although nothing commands a plan’s sponsor to state provisions that meet conditions for § 401(a) or § 403(b) tax treatment, a plan sponsor might prefer to do so. Some IRS guidance supports a definition of accrual compensation that includes a parsonage allowance as not contrary to § 401(a), assuming other conditions are met. Rev. Rul. 73-258, 1973-1 C.B. 194, CCH Pension Plan Guide Pre-1986 Revenue Rulings ¶ 19,233 (“[A]mounts that are excludible from a minister’s gross income under section 107 of the [Internal Revenue] Code are compensation for purposes of section 401(a), and their character as compensation is not changed by the fact that they are excludible from gross income.”); see also Revenue Ruling 73-381, 1973-2 C.B. 125 CCH Pension Plan Guide Pre-1986 Revenue Rulings ¶ 19,260 (“The fact that the value of meals and lodging may be excluded by statute from gross income does not alter its character as compensation upon which benefits may be based.”). Both those rulings are about church retirement plans. I have not checked whether those rulings remain the IRS’s interpretation. As ever, Read The Fabulous Document. This is not advice to anyone.

My new client received a certified letter from a former employee requesting a copy of the SPD from the years in which she was employed (not necessarily a participant), 1997-2003. Since I was not the TPA I don't have the SPD and my client doesn't think he has it either. She was paid a benefit of about $50K in 2005 and apparently is not disputing that. Is my client obligated to provide the old SPD from 23 years ago to the former participant?

Client is doing a discretionary match of : Since it relates back to service it can not be used as a safe harbor match 100% of deferrals up to 6% of comp up to 5 years of service - then 150% of deferrals up to 6% of comp if over 5 years of service How the Formula Works (Example: $50,000 Salary) Years 1-5: You contribute 6% of $50,000 = $3,000. Employer matches 100% of your contribution up to 6% = $3,000 match. Total contribution: $6,000 ($3,000 your money + $3,000 employer). After Year 5: You contribute 6% of $50,000 = $3,000. Employer matches 150% of your contribution up to 6% = $4,500 match. Total contribution: $7,500 ($3,000 your money + $4,500 employer). Can they do a Enhanced SH match of 100% of deferrals up to 6% of comp and then a discretionary match of 100% of deferrals up to 3% of comp if you have been then at least 5 years In other words - 1-5 years 0% match ; 5 years or more 3% match Would that need to be tested alone (ACP) without the safe harbor match? Would ADP test pass automatically since there is a safe harbor match?

A participant is over age 73 and has an RMD for 2025. He terminated before NRA and because of that, he is not 100% vested. Is the RMD amount calculated based on full account balance or vested account balance? Thanks.