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You’re reading it correctly. Under the updated rules, a plan can file the 5500-SF if it has fewer than 100 participants with account balances on the first day of the plan year. The only other things I’d check are whether the plan falls into a category that still requires the full 5500... For example, being part of a pooled employer arrangement or holding employer securities.

Based on your description, I am not seeing the discrimination issue: "participants whose FICA wages were $150k or less in the prior year can continue to make catch-up contributions on a pre-tax basis, but those whose wages exceed this limit are not permitted to make any catch-ups." So, here, the over $150K participants do not get catch-ups (because they have to be Roth). So they took away something from the more highly compensated.... Under the Code, there cannot be discrimination against NHCEs... no rule says you can't discriminate against HCEs. The discrimination issue comes up if a Plan has participants who do not earn FICA wages and they are HCEs for nondiscrimination testing but not highly paid individuals for Roth catch-up purposes. In that situation HCEs who are not HPIs might be able get catch-ups but some NHCE who are HPIs could not get catchups. That is a very specific set of circumstances. This set of circumstances is addressed in the regs that provide a safe harbor if those HCEs who are not HPIs are not eligible for catch-ups either. If you don't use the safe harbor the Plan would need to do BRF testing (and may or may not fail it). Those same regs say you can design a plan permitting catch-ups but does not permit Roths. The communications piece you read may be meant for the general population and not for a plan with this specific set of facts. Maybe I am misunderstanding the query....

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I'm curious to know what your role is with these clients? From a compliance perspective this is all quite complicated. If you work for a TPA I hope someone at your firm has a solid grasp of this stuff. If you work for a financial advisors office, you're definitely asking the right questions but you're going to want to get someone involved who has the right expertise. They might be available at the recordkeeper if you ask for it. They will not be proactive because the scale is too large as others have noted. But most of them will go over things if you call them. But I can make this a little easier for you. Add Roth. It's a good benefit, and plans without Roth are becoming closer to Unicorns every day. Note that you have plenty of time to add Roth in order to avoid the limitations since most people are not doing any catch-ups until at least June (most likely not until Q4 2026). I think most TPA's and recordkeepers were pretty aggressive about getting Roth added over the last year or two, if they didn't already have it. I know some clients didn't add Roth to keep it simple, I get that. And that was probably a more defensible position before these mandatory Roth rules. But low income people in particular (who pay little or no taxes) are better off doing Roth. There was a great article today by Carol Calhoun who mentioned that anyone eligible for the tip income and overtime income deductions is making a mistake contributing pre-tax because they are converting tax free income to taxable income (I'm paraphrasing). https://benefitsattorney.com/bad-tips-for-401ks/

I'd love the thinking of folks who are more well-versed in SIMPLEs. Didn't get any traction on the other board, so I thought I'd try the 401(k) board since it does involve one. 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 initial 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?

For some time now (both before and after the shutdown), I have had technical difficulties getting an EIN issued online. Roughly nine times out of ten I will get the message "Apply for an Employer Identification Number (EIN) online is currently unavailable We apologize for any inconvenience this may cause. Please refresh your browser or try again later." The most frustrating part is that you have to complete the entire application process before getting this message. The few times a number was issued, it just seemed random. I have tried deleting cookies, using different browsers, and applying at different times of the day. Are any of you having similar difficulties? Do you have other suggestions or insights that could help? My thanks in advance for any ideas.

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A lot depends on whether the correct amounts were actually withheld and deposited to the SIMPLE IRA. The deferral percentage should be calculated on gross pay regardless of whether the election was pre-tax or Roth, so it may help to confirm, if you haven’t already, that the correct deferrals were withheld for each pay period. If the correct amounts were withheld and deposited and the only issue was that payroll treated them as after-tax, then it’s really just a payroll clean-up. You’d just want to make sure the year-to-date wages and the W-2s show the right pre-tax treatment. If the correct amounts weren’t withheld or didn’t make it into the SIMPLE IRA, then you’d follow the SIMPLE IRA Fix-It Guide option that best matches the situation, which @justanotheradmin shared above.

In Connor's originating post's first sentence, there is an ambiguity about whether "401(k) clients" refers to plan sponsors, participants, or something else. Connor, you mention that the service provider sent you something that it plans to send (but maybe has not sent to its ultimate audience). Does that service provider invite your comment? Does it ask you to do something, or be mindful of something, before the communication gets to its audience?

Could the plan or the employer be harmed because of a delay in the PBGC's findings?

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Hi A plan of mine was picked by PBGC for audit and all information was provided 6 months ago. I have not heard from them at all since then. sometimes no news is good news but here I am getting a bit worried that I have not heard anything. Between all governmental firings as well as shutdown, does anyone have an experience similar to mine? Thanks

What would you propose as an alternative? The decision to amend the plan to allow for Roth is made above the participant level. If the plan is not amended, then the proposed participant communication seems appropriate. Unless the financial institution has discretion to make plan decisions, including to amend plans to allow Roth contributions(or disallow catch-up), I don't see any alternative. Plans are not required to offer Roth or disallow catch-up. Many the financial institution / recordkeeper do not charge enough or have a set-up that allows a lot of personalized customized plan design and follow-through, depending on the size of the plan. Unless they are on a service level where the financial institution is going to contact each affected plan sponsor personally, and educate them on the pros and cons of amending or not, I don't see it changing. Does the financial institution also maintain the plan's document for these clients? If not, they really aren't in a position to do much else. What is your role? If you are an advisor or TPA, those are the service providers I see doing more education with plan sponsors if a plan does not allow for Roth, but does allow for catch-up. I have had a number follow-up with sponsors throughout the year to educate and see if they would agree to plan amendments.

I have had this done with clients in the past and as long as it was all fixed in the same calendar year and all the reporting is corrected by payroll - it was deemed "corrected" - no harm, no foul. In some cases, payroll had it right, but the deposit to the plan accounts was uploaded incorrectly (an easier situation to correct). We may have documented the correction of the operation error and self-correction via resolution (especially if the plan is subject to audit - this helps). I think the key in administration is to ensure someone(s) is always minding the store and proving that. The split payroll thing between allocating an deferral election between both pre-tax and ROTH (whether deemed or not) will no doubt be an issue next year. I don't see many participants catching it, let alone catching it timely. This needs to be a check/limit at the payroll level.

Also to confirm, it is a lookback calculation? So an employee hired with a salary of $250,000 on 7/1/2025 made FICA wages of $125,000 in 2025. They are not subject to the Mandatory Roth in 2026 because they did not make the limit? regardless they will make $250,000 in 2026. They will be subject to the mandatory roth in 2027.

It's actually based on the employer, determined without regard to controlled groups or affiliated service groups. So if you have a plan sponsored by two companies, A and B, which are members of a controlled group, and employee X earns $100,000 from each A and B, then even though their plan comp is $200,000, they are not subject to Roth catch-up from either employer since their comp from any employer was not greater than the limit. Meanwhile if you have employee Y in the same plan who earns $180,000 from A and $20,000 from B, then their deferrals from A would be subject to Roth catch-up while their deferrals from B would not.

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Thank you, Peter. Those are excellent points to consider in dealing with this issue. And thank you, Frank (fmsinc) for the helpful case references.

So, the documents governing the plan set provisions for determining the beneficiary. Including what to do when there is no claim. And perhaps providing for the insurer to do it. --------- The plan sponsor might be reluctant to amend the plan for at least two reasons: The insurance contract might provide that plan provisions accepted by the insurer is a condition to the insurer’s obligation. A custom provision might call the employer/administrator to do work that otherwise the insurer is willing to do if the insurer has no obligation beyond following its own procedure. The plan sponsor might prefer that the insurer do the work of applying its procedure for difficult claims. If, however, the plan sponsor considers a plan amendment, the plan sponsor and each plan fiduciary might want each’s lawyer’s advice about whether a new provision ought to apply to a claim that arose before the amendment is made, and, if it applies, how it applies. Further, what would the written plan describe as the set of facts that result in a beneficiary being deemed to have predeceased the participant or otherwise treated as not a beneficiary? How might a reader of the summary plan description perceive that description? This is not advice to anyone.

Hello T haley did you ever receive an answer to this? I have an exact on point situation, but am looking at the compensation issue for statutory compensation thank you

I just want to clarify that almost no TPA or compliance provider every aggressively pursues cumbersome and complex provisions. However, beggers cannot be choosers. I really really want that new business, so I don't get choose their plan design for them 👍. It's always the biggest clients, who by the way have had those provisions for decades at times, that are at issue. Now Congress did us all a favor with SECURE Act (if you want to take a glass half full view of the world). Now when we go to clients and tell them your "plan document sucks" there is some real meat on the bone, since the LTPT stuff in my view is technically, figuratively and literally impossible to comply with.

Thank you for the perspective. Since you are receiving the small pension from the other company, it may have never been reported, or it might have been removed once you went into payment status. Either way, glad to know you are receiving all of your earned benefits.