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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.

A new development in all this... The plan's definition for calculating contributions (both employer and deferrals) includes housing allowance. The plan has received challenge that including housing allowance in the deferral contribution calculation is not allowed. I have found mixed information on this topic, but nothing clear. Does anyone have a related citation specific to church retirement plans and limitations on how they define compensation for this purpose? (On a side note, the plan does not include housing allowance when considering available comp for the 415(c) limits)

I have a Township who currently offers a 401a plan to it's full time employees. They want to create a plan that offers match, but only for the part time employees - excluding the individuals who are eligible for the 401a plan. I apologize for my ignorance, but we don't do a ton of these. I think they can do this...but I would love some confirmation. Any guidance or alternative thoughts on this would be very much appreciated. Thanks!

The few situations I’ve heard about use a service provider to confirm to an employer its employee’s student-loan repayments. I have not seen a form, whether website app or paper, for a participant’s self-certification.

Does the plan provide a § 72(t)(2)(I) emergency personal expense distribution? If not, might the plan sponsor consider an in-operation amendment (to be included in a SECURE 2019 & 2022 restatement)? The standard for an “emergency personal expense” is wider than for a hardship. A participant may certify that the claimed distribution is “for purposes of meeting unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses.” I.R.C. (26 U.S.C.) § 72(t)(2)(I)(iv). Although the $1,000 an emergency personal expense distribution might provide might meet only a portion of a tree-removal expense, $1,000 might be more useful than $0.

Chaz, might an element be missing from your simplified example? What is the fair-market value of the health coverage? Using your example, let’s put an illustrative amount on the value of the health coverage: Imagine $30,000. An employee who’s not offered an extra opt-out payment chooses health coverage, has $10,000 taken from her pay, and gets another $20,000 in value provided by the employer. (Assume this layer of choice is a proper § 125 plan, and does not discriminate.) Her Federal income tax wages is $90,000. (Her total compensation is $120,000.) The employee who is offered an extra opt-out chooses against health coverage, has $0 taken from her pay, and gets the $15,000 opt-out payment. If what I’ll describe as the “second” § 125 plan (the choice offered only to the one specified individual) discriminates, the offeree, if highly-compensated, is not relieved of constructive receipt of whatever she could have chosen. Looking to the greater-of, the $20,000 value of employer-provided health coverage counts in her gross income; it is $120,000, not $115,000. Might an employer’s or employee’s tax practitioner analyze it this way? If § 125 does not apply to the extra opt-out choice, must an employer recognize constructive receipt in its Form W-2 wage reporting?

I agree - I believe it's not a preventive hardship w/d option, but only for actual damage. Your last sentence, though, was the key.

Thank you, ESOP guy!

And the plan must have the safe harbor provisions. It is not considered safe harbor if the plan does not say it is safe harbor.

I'm hearing different things from TPA's regarding whether or not they are making a Student Loan Matching Certification Form available to participants. Has anyone seen TPA's putting anything together? I'm also surprised I haven't seen anything from document providers?

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No. A match of 100% on the first 6% satisfies the ADP and ACP safe harbor (assuming no allocation conditions, vesting rules, notice requirements, etc. are satisfied). The 4% rule you reference comes into play when a discretionary match is funded in addition to a safe harbor formula. If there is a discretionary match in addition to a safe harbor match, then to satisfy ACP safe harbor, the match cannot take into account more than 6% of pay and the match contribution cannot exceed 4% of pay.

You also need to check how the plan document defines After Tax Contributions. Many I have seen say that After Tax Contributions are made from Gross Wages paid to the employee during that tax year and withheld from pay, not submitted from other funds the participant may have access to.

Can it be created on 12/31 such that no accrual occurs until the next year?