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I doubt it. Not a CPA, but I can think of very little advantage to what you describe. If it happens YoY, they're really just kicking taxes down in a cascading way, not gaining much of an advantage. In fact, they're likely losing out. I don't know how much a safe harbor contribution would cost them, or how much of it would go to HCEs / owners, but the tax savings of a) the safe harbor allocation itself and b) the fact that HCEs could defer another $15,000 (or more) combined annually means they're likely losing a pretty significant tax advantage by not doing safe harbor. I do plan design & work with sponsors fairly often, and honestly there's just always some that will refuse to design a plan in the way that makes sense. Some don't want to be safe harbor because they see employer contributions as "giving money away" and they don't want to do that, even when you break down the numbers of how it actually saves them money overall. Some also just simply don't like being told what to do or what their plan should be. I've had prospects come to us who would benefit significantly by being a SH Non-elective instead of their current safe harbor match; they do new comparability profit sharing every year and have to make a full 5% gateway contribution on top of their safe harbor. Non-elective would save a huge chunk of money for a company that wants to max out its owners, but they came looking to offer match and are set on sticking with it.

That's a more recent version, but yup!

Treas. Reg. §1.410(a)-7(a)(3)(ii): Employment commencement date reads While 1.410(a)-7 is, in general, about the elapsed time method in particular, this section states "in order to credit service accurately under any service crediting method". Unless there's precedent out there otherwise, I would assume using the date they actually started working would be defensible under the above definitions, as they never worked an hour of service prior to that. YMMV, Not legal advice, etc etc.

Just a thought... show a larger portion of the In-Service distribution being made from his match account rather than his deferral account. This would leave a sufficient balance to make the corrections. It would seem that the only issue is if his deferrals were all Roth.

for NPPG (Remote / Shrewsbury NJ)View the full text of this job opportunity

@Bill Presson Bill, how does this new page work for you on your iPhone? https://benefitslink.com/limits.html

@Bri This one? https://benefitsattorney.com/charts/appfa/

Ta-da, now on BenefitsLink (with Carol's consent): Inflation-Adjusted Limits on Retirement Plans, Including Maximum Benefits and Contributions (1996-Present)

A large group of doctors has several doctors in their census with DOH 7/1/2024 which makes them eligible 7/1/2025 in accordance with the plan document. This was on the census file uploaded to the record keeping platform who determines eligibility. They are eligible then for SH, PS and DB. Now the plan sponsor says they didn't actually start working until mid-August and therefore should enter 1/1/2026. These doctors make the max in 6 months and so the employer contribution is large - they maximize the K plan with SH/PS. My approach - plan sponsor we rely on you. Tell us their DOH. I don't know if the IRS has a position on this. I advised them to keep the DOE as 7/1/2025 as that may be the expectation of these recent hires. Thoughts? Thank you

for PCS Retirement (Remote / PA)View the full text of this job opportunity

Owner of a 401(k) plan with over 20 ee's fails ADP Test every year. They refuse to set up a Safe Harbor plan and annually takes about $15,000 in excess contributions returned to them. I just started wondering if this is some kind of tax strategy on their part to delay some taxes? Anyone ever seen that?

for ASC Actuarial Systems Corporation (Remote)View the full text of this job opportunity

Person B's input isn't required, in fact some divorce agreements will specifically make drafting and filing a DRO the responsibility of a particular party so that the other party doesn't have to deal with it. The plan literally CANNOT make a DRO qualified until AFTER its been filed with the court. So either these are wrong, or out of order. Person B's signature is not required keep track in writing or every written request and response for the information. This is something to hope EBSA can help with. I don't know what this means. Are they asking Person B to sign something? asking them to take money out of the plan? There isn't anything for an alternate payee to accept or reject. If they think the DRO was written wrong that is typically something for them and their lawyer to work out with the other person's lawyer. Not the plan. I don't think this means what you think it means. for a DRO to be qualified - it literally just means that it has the appropriate information mandated by federal law, such as being able to identify the people involved, the plan involved, that the award isn't in a form that the plan doesn't allow etc. Qualified doesn't mean the order has a money split that is the same as what the parties agreed upon.

I think you might be conflating "legally qualified" and "aligns with an equitable agreed upon division of marital property" . they are Not the same. Legally qualified for a DRO - is just a checklist based on the rules in Federal Law. Has almost nothing to do with the amount, value, formula of the benefit awarded written into a DRO for the alternate payee. Q: Does person B have a copy of the DRO? It not, perhaps they can get one from the court records. If yes - Q: is the Plan Administrator saying the DRO is Qualified? Was that communicated in writing from the Plan Administrator to person B? The DRO is not a QDRO until the plan says it is. And then the plan is required to provide person B with all the things - the QDRO procedures, the acceptance of the plan that it is qualified, information about segregation of the money into a separate account, or distribution options, etc. If the plan administrator is not providing those things, then person B can ask EBSA to help. If the plan administrator is refusing the say if the DRO is qualified or not - and person B wants it to be qualified - then person B needs to submit the DRO to the plan and ask them to deny it or qualify it. In writing. Q: Does Person B believe the benefit awarded in the DRO is NOT what was agreed to in the property settlement agreement? If they think the DRO is drafted wrong, and doesn't align with the agreed upon split of marital assets - then it is something for a family law attorney to work on. The Plan Administrator has no say in the formula or benefit award in a DRO, qualified or not. Person B should take a copy of the DRO and a copy of their marital property agreement to a family law attorney and ask them to see if the two align. If the issue is the Marital Property agreement should be amended - then that has nothing to do with the plan either.

Congrats on retirement. I would assume most people on a forum like this know about this IRS table with all the limits going back 1989. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.irs.gov/pub/irs-tege/cola-table.pdf

If you updated the source to be included in the 2026 year, Relius does not go back and mark the source to be included in the 2025 year. Make sure that you have both years marked to include the source in the testing.

I wasn't aware 1 was an option but sounds OK and yes, 2 is definitely OK. Correct, you need not use the same methodology for 410b, 401a4 and 401a26.

Apologies for the delay and thank you to those that responded since my last reply. These two questions posed is the issue Person B has. Person A: Drafted the DRO without any input from Person B Qualified the DRO as they are the plan administrator Sent to the judge with their signature and their representation's signature Person B has never signed the DRO or the QDRO Has not given Person B the plan's QDRO policy despite being asked dozens of times over the course of months Person A is trying to strong arm Person B in accepting the QDRO despite lying about everything related to money for the last 5 years and also not providing the plan documentation Person B is legally required to have as a plan participant. It boils down to this: How can anyone outside of Person A know the DRO is legally qualified, if they handled every single step of procedure and also refuse to show their work as to how they deemed it qualified? Person B has reached out to EBSA in the last week but I don't know anything more about it at this point. Thanks!

Did you pair the proper Relius account number to that source? Like, maybe your account 201 is accidentally the match source.

for Vestwell (New York NY / AZ / PA / TX)View the full text of this job opportunity

So, the recordkeepers that do this can limit the percentage of each deferral or other contribution directed to a to-be-limited designated investment alternative, but don’t limit an account balance? That’s helpful information, thank you.

I rarely use Relius Administration, but I have to for a particular project, and it is just NOT intuitive. I set up my plan specs and I am trying to run ADP testing. I get a pop-up that says: "In Plan Specifications at least one Plan Source must be coded to be included in he ADP/ACP test." But it is! It is! I've looked through other screens to see if I am missing something, but it just isn't staring at me. Any ideas?

@Peter Gulia, having a cap on the percentage of a contribution that can be invested in a specific investment is used by some plans to limit investments in: publicly traded stock of the employer, self-directed brokerage accounts (particularly when there are few restrictions on permissible investments within the SDBA), investments in that are not easily tradable like gold bullion or real estate, and investments where the plan fiduciaries are concerned about the volatility of the investment. Most recordkeepers can support this type of limit. Note, though, that recordkeepers may not support automatic re-balancing when the value of these investments exceed a specified percentage of the value of a participant's overall plan account.

for SetAway LLC (Remote / Chester NH / CT / MA / ME / RI / VT / Hybrid)View the full text of this job opportunity

Carol, thanks for all your contributions, on your webpage and on these Message Boards, as well as your standards of excellence. You will enjoy retirement!