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for CBIZ, Inc (Remote / Saint Petersburg FL)View the full text of this job opportunity

See what I mean? Just kidding, Peter - that's good stuff - thank you.

@SSRRS Did you file using third party software (FIS, FTW, etc...)? Did you get an AckID, or did this prevent you from actually getting it filed? While I agree it sounds like an error on their end, it will probably take quite a bit of back and forth to get it resolved.

If ficuciaries put something in meeting minutes stating why they choose the target date suite and ages, claim that they believe it's reasonable and appropriate based on its workforce demographics and other observations, and demonstrate monitoring ahead, my wild guess is that would be good enough and more than most plans do. I wouldn't be too specicfic in the minutes or fiduciaries could paint themselves into a corner.

Hi, Thank you as always for all the insights. The 5500 for a 6/30/2025 plan year end, is due by 1/31/26. This came out on Saturday. Therefore, the 5500 and the 5558 must be filed ON or prior to 2/2/26 (since 2/1 26 was a Sunday). We filed the 5558 on 2/2/26 ( today) with I file and got a validation error that stated " you have filed the form 5558 after the return's normal due date and may not be approved for an extension based on this form 5558 that was submited". I hope this is an error on their part and the extension will be approved? Thank you

Hoping that Mike Johnson doesn't see his shadow and give us 6 weeks of government shutdown!

for Sentinel Group (Remote / Everett MA)View the full text of this job opportunity

for Sentinel Group (Remote / Everett MA)View the full text of this job opportunity

for ParetoHealth (Remote / Richmond VA)View the full text of this job opportunity

for Scott Retirement Advisors, Inc. (Remote)View the full text of this job opportunity

for Scott Retirement Advisors, Inc. (Remote / Thousand Oaks CA)View the full text of this job opportunity

for TruStage (Remote / IL / MN / WI)View the full text of this job opportunity

for TruStage (Remote / IL / MN / WI)View the full text of this job opportunity

I interpret this differently. Deferrals are $9,800. But, only deferrals up to $8,272 (10% of $82,726) are recognized. I’m disregarding cents or rounding just for explanation. 50% of $8,272 is the match = $4,136. Not sure why you get into ADR and ACR. That’s for testing and is an entirely different issue. Most plans allow the denominator to be whatever you want as long as it satisfies 414(s). I think the calculation of the match is relatively straightforward. But, the reason to avoid this design is highlighted by your question. If you’re struggling with it, imagine how confused participants will be. Is the participant in your example going to understand that even though the deferral rate was less than 10%, that all deferrals are not being matched? How does a participant who only wants to defer the maximum that will be matched practically do that? Just because you can define compensation differently doesn’t mean you should…

A plan that tax law classifies as a profit-sharing plan, whether it includes or omits a § 401(k) cash-or-deferred arrangement, is a pension plan if one follows ERISA title I’s definitions. ERISA § 3(2)(A), 29 U.S.C. § 1002(2)(A) https://www.govinfo.gov/content/pkg/USCODE-2023-title29/pdf/USCODE-2023-title29-chap18-subchapI-subtitleA-sec1002.pdf. And while tax law might not distinguish between “solo-k” and some other plan with a § 401(k) arrangement, an investment or service provider’s business classifications can matter greatly to consumers and to their intermediaries and advisers. For example, Individual(k)Ô (Ascensus claims this as a trademark) gets a set of service agreement, trust agreement, plan documents, investment arrangements, and other provisions that’s distinct from other business lines. And differences between a “solo” and a “regular” 401(k) service arrangement can affect even a plan’s provisions. The plan-documents set Ascensus requires for an Individual(k)Ô omits some choices Ascensus allows for other business lines, and imposes some plan provisions Ascensus does not require for other business lines. The sales or business lingo might seem awkward to a tax practitioner, but might convey meaning to consumers, intermediaries, and advisers. For better or worse, “solo 401(k)” now has some trade-usage meaning to describe generally an arrangement a service provider designed for an individual-account (defined-contribution) retirement plan its sponsor intends as one not expected to cover any employee beyond a shareholder-employee or a self-employed deemed employee, or one’s spouse. And that trade-usage meaning includes a sense that investment and service providers offer constrained terms for those plans.

I really am not following everything in the facts in OP (I don't understand the facts in the second paragraph of the OP so won't be addressing anything related to that paragraph) but your client could have an operational failure that would need to be corrected under IRS EPCRS (need to determine if the plan documents require the amounts to be contributed by a certain time period) and your client definitely has a failure to timely deposit the contributions that would need to be corrected under DOL VFCP. Under EPCRS, normally corrections are limited to contributions that could be made without exceeding an IRS. Thus, under that reading, if an operational failure occurred, the correction appears to be limited to $4,000. However, for VFCO failures, I don't recall any language in the VFCP that would limit the contribution. In fact, the DOL's general view is once the amounts are withheld from the participant's pay, the withheld amounts are plan assets. So, conservatively speaking, it appears the correction under VFCP would include the full $5,000. If you have both an operational failure and an failure to timely deposit, a conservative approach would correct by contributing the full $5,000 as there is also a method by which to correct the excess deferral (and if done prior to April 15, there should be no downside to correct the excess deferral). Also, normally, under the corrections principles for both, employers do not adjust the Forms W-2 for the corrections. So the employee's W-2 would not be adjusted. A 1099-R would be issued for the return of the excess deferral in the following year by April 15 with the amount of the excess deferral and earning contained in Box 2 and using a Code P. Again, I don't fully understand what happened with the $1,000 but if not put in plan and paid to employee, normally that would go on the Form W-2 so a W-2C might be needed (employees typically do not receive a 1099 and it wasnt from plan so no 1099R)' Flying by the seat of my pants here so absolutely not advising you... just spitballing

I can't tell you how many times I've had people (including some investment reps who peddle the things!) say "It's not a 401k plan, it's a solo-K". And then there's the people who refer to PS or 401k plans as pension plans.

Yes,. if you have determined they are still a controlled group after the Family Attribution Rule changes of SECURE 2.0 they can have one plan. If not, as CUSEFAN suggested, they could have a MEP.

Thanks to all who responded. Your input is greatly appreciated. After further analysis, I landed on Method #1. The example below vary slightly from the OP because it is based on an actual participant $$$. For illustration: Employee deferral compensation: $124,1124.42 Employee matching compensation: $82,726.58 Elective deferral percentage: 7.90% of deferral compensation ($9,800 / $124,124.42) Total deferral: $9,800 Deferral corresponding to matching compensation: $82,726.58 * 7.90% = $6,535.40. Under the plan’s match formula, (50% of deferrals up to 10% of matching compensation), the employer match is calculated on the deferral attributable to the matching compensation. Step #1: Determine matchable deferrals Matchable deferrals cap: $8,272.66 ($10% * $82,726.58) Actual eligible deferrals ($6,535.40) are below the cap. Step #2: Apply the 50% match 50% * $6,535.40 = $3,267.70 Step #3: Confirm against maximum possible match Maximum possible match: 5% * $82,726.58 = $4,136.33 Since $3,267.70 is less than $4,136.33, the calculation is valid and does not exceed the plan’s maximum. Conclusion Maximum possible match: $4,136.33 Actual match earned: $3,267.70 Reason: Employee deferred 7.90% of matching compensation, which is below the 10% deferred cap required to receive the full match. Why Method #2 doesn't work: Under the Plan, the match is not calculated based on the derived or applied deferral rate that results from dividing total employee deferrals by matching eligible compensation. Doing so would replace the plans explicit formula with an alternative methodology that is not described in the plan document. Instead, the match must be calculated strictly in accordance with the plan’s stated matching formula and compensation definitions. The plans match is formula driven, not right driven. The plan’s matching contribution is defined as 50% of employee deferrals up to 10% of matching compensation. This formula requires 2 separate steps: Identify the dollar amount of the employee deferrals attributable to matching eligible compensation. Then apply the 50% match subject to 10% of matching compensation cap. Total employee deferrals are calculated using a broader compensation definition than the one used for the match. As a result, total deferrals may include contributions made on compensation that is not eligible for matching (such as bonus or overtime). When total deferrals are divided by matching eligible compensation, deferrals attributable to non-matching compensation are improperly included in the calculation. This artificially inflates the implied deferral percentage. The resulting rate does not reflect the participants’ actual deferral rate based on matching eligible pay. This approach conflicts with the plan's design which limits match strictly to deferrals made on matching eligible compensation. Final takeaway The match is calculated using the matching compensation definition not the deferral definition. The employee does not automatically receive a match equal to 50% of 7.90% of total W-2 comp. You must isolate deferrals attributable to match compensation first then apply 50% of the 10% formula.

CAFA, is your question about health coverage that is insured or "self-insured" (that is, not provided by a health insurance contract)? Also, what method (if any) beyond a participant's statement would the employer/administrator use to discern whether a participant's spouse has an availability of coverage (other than Medicare) elsewhere?

To help the seller evaluate possibilities and probabilities of outcomes about a demand, an arbitration, or a court proceeding seeking a return of what the seller might assert was a mistaken contribution, the seller might want its lawyer’s evaluation. An important issue could be whether the seller’s ostensible belief or mistaken assumption was a mistake of fact. What fact was not known to the seller and would not have become known had the seller used reasonable diligence? Including (at least) reading all documents of the organization and of the transactions? If the seller might ground a claim on the receiving plan’s § 15.02(b), might such a claim be inchoate until the seller has filed an income tax return that claims a deduction for the contribution and the IRS has somehow “disallowed” the deduction? Or, might the receiving plan’s fiduciary be persuaded by a reasoning that the seller’s knowing that it must not file a tax return that would claim a deduction the taxpayer knows it is not entitled to is tantamount to the IRS’s disallowance. If, when the contribution was made, the seller was the or an employer regarding the participants (and their beneficiaries) who are the subject of the contribution, how confident are you that the contribution is not deductible? What consequences result from relevant acts having transpired in 2023? Although $250,000 might matter to the seller, might professionals’ fees and other expenses outweigh the probability-discounted recovery? This is not advice to anyone.

Those rules are very particular, and "I thought I could deduct but my accountant told me no" (or some other facsimile) I don't think qualifies as a mistake of fact. CB contributions - minimum required and maximum deductible - should have been calculated by a knowledgeable actuary. Following bad advice, ignoring good advice, or not getting advice is not a mistake of fact. Mistake of fact is like having the actuarial calculations based on materially incorrect data such that the contribution range is materially incorrect. Maybe that is the case here, but you don't provide details. If so, and a refund was requested from the trustee within a year of the contribution then there could be actionable cause, in which case I'd recommend lawyering up and following through on the litigation threat as it seems the seller has been ghosted. Note the amount available for return is limited to the excess over what could have been contributed had the mistake leading to the error not occurred. Disallowance of deduction is specific to IRS action and you don't mention that as a relevant event here.

As all said - dig into document details carefully. Without knowing how those plan provisions are laid out, my opinion given how you describe them is the person should get a match equal to the lesser of 50% of their deferrals ($4,900) or 5% (50% x 10%) of match plan compensation ($4,136.33). I don't see any logical way for method 1 to apply.

Recognizing the practical limits of language, there can be differences between a businessperson’s consumer-facing or intermediary-facing sales label and terms or expressions a practitioner might use. And even law-defined or technical terms can have aspects of imprecision, misdescription, or confusion. I remember wincing when lawyers used “profit-sharing” to describe a nonelective contribution of a charitable organization that by law cannot have a profit to share with anyone. Even if that usage might have followed relevant tax law, I wouldn’t use it with my client’s customers because it would only confuse them. Perhaps especially if the employer provided a contribution for a period in which the organization had negative income. Or imagine a retirement plan in which no employee is a participant and hundreds of partners are participants. According to the executive agencies’ Form 5500 instructions, that is a one-participant plan. For the arrangement many people call a “self-directed brokerage account”, why do we say self-directed? When a plan that provides participant-directed investment limits a directing participant’s, beneficiary’s, or alternate payee’s investment alternatives to designated investment alternatives is that not self-directed by the individual? And if what we mean is an antonym or other-than of a plan’s designated investment alternatives, should we call it a Nondesignated Investment Alternatives Account? BenefitsLink neighbors could go on with many illustrations about how difficult it is to invent a short phrase that perfectly describes what fits a concept, rule, or arrangement.

Absolutely perfect!