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For decades OPM has required that when a Former Spouse submits a certified copy of a FERS Court Order Acceptable for Processing ("COAP") for approval, they must also submit a certified copy of the Judgment of Absolute Divorce ("JAD") and a copy of the Marital Settlement Agreement ("MSA") by whatever name it may be called, if there is one. I have a client pushing back on providing the MSA, even a redacted one, for privacy reasons. So I opened my CFR website and have spent HOURS looking for the regulation that required that the MSA be provided. I cannot find it. I contacted a few other COAP preparers that send in the MSA like me, but they don't know the source of that mandate, or any other Plan Administrators that want a certified copy of the JAD, let alone the MSA. Yes, I know that many Plans permit the transfer of pension and/or retirement benefits that are based on a "legal separation" where there is no JAD and will not be until the expiration of some period of time in the future (ex: South Carolina), so the Plan must base its decision on the MSA. But that's not my situation. Ideas? Thanks, David

I have a client with a solo 401(k) plan. Upon the recommendation of his CPA, he converted about $400,000 of pre-tax plan monies to Roth. The problem is that instead of moving the funds to a Roth account within the 401(k) Plan the funds were moved to a traditional IRA, then converted to a Roth IRA, where the funds currently are being held. The taxation for 2025 is correct and the funds are still invested. We explained to the client that this was an ineligible distribution and the funds need to be returned to the Plan, adjusted for earnings. When they reached out to the Custodian to request that they needed to "undo" it all, they stated that they can't move the Roth IRA funds to a Roth 401(k) account because Roth IRAs can only roll into Roth IRAs. Any suggestions or insight on how to get the Custodian to correct the error? Outside of "undoing" it, what corrective options do they have?

The question I am asking relates to the divorce of the plan administrator and their former spouse, this case takes place in Wisconsin. A brief overview of people involved: Person A: employee of company X, where they are not only the plan administrator but they are a partial owner (the other owners are family members as well) Person B: ex-spouse Lawyer A: Lawyer for Person A Fiduciary Divorced was finalized in May of 2021. In January of 2022, the QDRO was filed and signed off by the judge with a May 2021 valuation date (this is key point for later on). The QDRO was signed by Lawyer A, with a December 2022 date, however, court records show that they had withdrawn from the case in June of 2022. Does the dates above invalidate the QDRO? Since the signature date of Lawyer A doesn't make sense? As of August 2025 the QDRO was never executed and the assets in Person A's 401k were never split, Person A has been contributing to the plan since the divorce was finalized. In order to get things finished and complete the QDRO, person B asked for plan documents to understand what they were entitled to do with the money owed to them (like rollover, cash out etc) as they had not been given ANY documents prior to this. Person A supplied a SPD dated August 2021 and claimed that was enough information and that was all they had. Person B spent weeks asking for more plan documents and then received a Adoption Agreement with the same effective date as the SPD (August 2021), Person A then stated again that they have provided everything they have and everything that Person B needs More correspondence over another few weeks led to Person A sending Person B a Basic Plan Document and again stating that is all they had and is everything Person B needed. ISSUE: The QDRO filed, signed by Lawyer A and the judge has a valuation date that is 99 days prior to the Adoption Agreement passed in August 2021. During the correspondence outlined above, Person A, has suggested to the fiduciary and Person A that the valuation date should actually be a different day in May 2021. This new valuation date conveniently falls within 90 days prior to the Adoption Agreement in August 2021. Person A has repeatedly denied having any documents prior to the ones effective August 2021 and even asked the Fiduciary if they had any documents to try and avoid responsibility. The question then is. With the dates and timelines given, what, if any, legal actions can Person B take? Is an ERISA lawyer the best way to handle this? Or is another kind of lawyer that is versed in small/family business better?

My client created an LLC last year and purchased an existing nursing and rehab facility which employs about 40 people. There was no plan in place with the previous employer. Now they want to adopt a safe harbor 401k to benefit employees this year. Eligibility is one year of service (no credit for service with predecessor employer). Would this qualify as a 'new business' and thereby be exempt from auto enrollment for 3 years?

Can a safe harbor match be added to an existing discretionary profit sharing plan mid year (i.e., after January 1?)

Don't know of a cite but generally federal income tax withheld in one year can't be applied to a prior year's tax liability. For example, if an employer incorrectly withholding taxes in a prior year, they can't simply correct it in the current year. This IRS Chief Counsel Advice states that generally you can only fix if find the mistake in the same calendar year. http://irs.gov/pub/irs-wd/201727008.pdf

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Ascript is ASC's import utility that can import just about any data from txt, csv, xlxs. If you are working with a recordkeeper data file - it may be you can import using one of their pre-programmed routines. You can submit a sample file to their support team as well and get some guidance so you aren't spinning wheels.

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I've seen significant penalties for failure to file via IRS Letter 5699. I have not seen incorrect/late ACA reporting penalties via Notice 972CG. They might be happening, I just haven't seen them yet in the wild. 2026 Newfront ACA Employer Mandate & ACA Reporting Guide

I know the ACA "good faith" reporting relief ended in 2020, but I'm wondering if anyone knows it the IRS is actually assessing penalties for errors on a 1094-C or 1095-C filed after the relief ended?

Looking for guidance. We have a spin off plan effective 4/1/26 with the EACA mandate. The prior RK drafted the EACA to use the first day of the following Plan Year as the date of the first increase. New RK can only use the initial period - 2nd plan year. My question is how to administer for the employees auto enrolled in 2026. Can the new intial period be applied for any of the 2026 auto enrolled participants? 4/1, or could it be retro to employees hired on or after 1/1/26 as long as they get an upddated advanced notice letting them know the first increase will not occur until 1/1/28? I know the conservative approach is to apply the change 1/1/27 in the plan document. Thanks for your help!

I agree with C.B. Zeller. Is the issue the file type? Because ASC takes .txt files for import just fine. Is the issue how the data is in the file? What import function in ASC are you trying to use? there are a variety of ways to import things into ASC. For example, investment imports where ASC has pre-programmed to work with certain major recordkeeper files. And then there are ASCRIPT custom imports which are super easy to use as well once you know what you are doing. Plus wizards and such. If the issue is how the data is in the file, and you don't want to manually edit the file then a macro or code to do that as CB suggests. You can just open the txt file in Excel, and then save it as an excel file type if you really just want to change the file type.

I agree with @justanotheradmin and also note that it is the Plan Sponsor's obligation to make sure that the plan amendment to the plan document was properly worded and fully executed, including doing so in a timely manner relative to the effective date of the change.

ASC can natively import txt files. Is the file structured in any reasonable way? Have you tried using one of ASC's import wizards or their predefined importer specs, if one exists for the data source you're using? If you want to take the approach of using code to extract/transform data before loading it into ASC, then a chatbot could probably help you write the code. I'd recommend that you know enough Python (or whatever language) to be able to read and understand the bot's output before relying on it in production. People on the internet seem to like Claude for that kind of task these days, but I can't offer any personal experience.

I think the auditors are probably right. you need to look at the formula of the match - if it is on an annual basis - and everyone is to receive a uniform percentage of pay based on deferrals - which is typical - why would someone who enters 4/1 or later be excluded? discretionary does not mean it can start stop any time - it usually means they can choose to give it one year or not. If they give it for that plan year, it needs to follow the formula in the document. Which sounds like is based on annual compensation and annual deferrals. If you let us know specifically what the document says for the annual based match formula maybe people can give more insight. If the sponsor wanted the ability to contribute match for some paydates and not others, the formula for the match needed to specify a payroll period or paydate basis. Not Annual.

Plan provides for a discretionary match ( no safe harbor). Match funded payroll basis but is based on year end - so a true up may be required April 1, 2025 employer stopped the match - participants were notified the match would cease as of 4/1/2025. 1. TPA never amended the document to remove the plan year calculation so.... (i) the match for Jan 1 to March 31st would need to be calculated based on annual compensation - correct? (ii) Auditors doing the 5500 audit and stated the participants who entered after 4/1 need to get the match. According to them this is a discrimination issue - Here is where I am looking for some assistance. Discretionary means it can stop/change at any time. Participants who entered after 4/1 do not get a match - this would not be a benefits rights and feature issue - do you agree. ACP Testing would be for the full year, but those that entered after 4/1 are not included in the ACP Test - do you agree Thoughts

The topic you ask about is full enough that Derrin Watson wrote a whole treatise, and over 28 years has revised it. Who’s the Employer https://www.erisapedia.com/static/WTE.pdf. While it’s tempting to seek a shortcut, a plan’s sponsor, participating employer, or administrator wouldn’t know which organizations and businesses are in or out of “the employer” until checking everything. Consider limiting your scope to what affects the design and administration of the one retirement plan you work on. Consider warnings that your work must not be relied on about how discerning who’s-the-employer for the one plan you work on affects employee-benefits plans of other organizations and businesses an owner of your client owns, whether indirectly or even directly. This is not advice to anyone. If you need advice, consider Ferenczy Benefits Law Center.

After tax contributions have to be deposited by January 30, 2026 to be counted for 2025 calendar year 415 limit.

I have a plan... all employees are HCEs (1 owner... everyone else earns megabucks). It's just a 401(k) plan.... none of the employees get an ER Cont One of the employees has asked about contributing a VAT contribution. Can this employee still max out 2025 to $70K ($23,500 deferral + $46,500 Voluntary) at this point? Or would any VAT Cont made now be for 2026?

Hello everyone. I'm looking for an automated method to extract financial account activity data from a *.txt file and import it into an Excel file so we can import it into ASC. I'm sure it can be done via AI. I've tried to use Copilot with limited success. Python seems to be a possible solution. Thank you.

While a plan’s administrator must read the documents governing the plan, many plans put compensation in the period in which it was or is paid. That often is so even if that’s not the period in which a worker’s service earned the compensation. That often is so even if the retirement plan’s measure is inconsistent with an employer’s accounting for when the compensation is the employer’s expense. If the plan’s provisions for defining compensation and putting it in a period result in compensation in a period in which the participant is not an employee or deemed employee, look to other plan provisions to discern whether a nonelective contribution is allocated. This is not advice to anyone.

We requested ownership information for a client that onboarded with us this year. Most of our plans are fairly simple with ownership as we specialize in small plans (I don't think we have a single plan that's large enough for a large plan audit), so it's nearly always just some split between a few employees. This company sent over a cap table, showing columns for common & preferred stock ownership, outstanding and diluted shares, etc for ~60 lines, some of them being employees holding stock, but also a large number of them (40+ or so) being holding firms or other entities that aren't individuals. A few questions. When calculating ownership for 401(k) purposes, is ownership specifically voting stock? Their preferred shares don't have voting rights, so that would impact how ownership % is calculated (CS / total CS vs common & preferred / all stock). How should we handle the potential of control groups? While unlikely, if a combination of those holding firms all held interest in another company that added up to 80%, couldn't we run into a control group issue that we'd have no way to know about? In this case, I believe the 80% ownership for controlled groups is specifically between 5 or fewer individuals/entities. If the 5 largest stakeholders don't add up to more than 80%, would it be safe to assume we're safe in this regard, as no combination of 5 firms could hit 80% anyways? If someone who held stock at this company also was an owner of any of the holding firms, would they then need attributed ownership from that? E.g if John Doe owned 5% of the shares of this company, but also held 50% of ABC Holdings, which held 10% of this company, would John's ownership be 5% (direct) + 50% * 10% = a total of 10% ownership for plan purposes? While the odds of any of this being particularly relevant is fairly low, especially in the small plan world, I'd prefer to have a solid understanding of their plan ownership; any input would be appreciated. Thanks!

@Peter Gulia is on target with suggesting the plan to start is the plan's definition of compensation. Be aware that some plan documents have separate sections that address post severance compensation for various purposes such as calculating contributions or 415 limitations. Any operational practice must conform to a reasonable and consistent interpretation of the formal plan documentation. Your question, appropriately, asks about what is done in actual practice. When discussing the practicality of determining in which plan year compensation should be recognized, a precursor is understanding the employer's payroll practice and also understanding the accounting method. For example, are employees paid in arrears (after the time when they worked) and, if so, how long past that time? Are employees paid in advance (which is sometimes done for salaried employees)? Is there a mix of payroll practices within the employer (such as hourly versus salaried)? With respect to the accounting method, how is payroll reported for W-2s and for financial reporting? Ideally, how amounts that straddle a plan year are treated will be as consistent as practical for plan purposes (contributions, deferral limits, annual additions, HCE determination...), for employee purposes (W-2, tax withholding, health & welfare benefits, insurance...), and the basis for employer financial reporting (cash, accrual, or on a 5500 - modified cash). Taken together, all of the above doesn't answer your specific question. The answer will be derived from having uniform and consistent payroll and plan accounting practices that do not violate the plan provisions.

Begin by reading, carefully, the plan’s definition of compensation, at least the definition for compensation to determine allocations of the nonelective contribution. Next, if relevant, consider when the check was drawn and when it was sent. If the distributee received the paycheck on Saturday, January 3, might the employer have paid that money in December? (Thursday, January 1, was likely not a business day, and Wednesday, December 31, was still 2025.)