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Beyond Internal Revenue Code § 105(h), one might consider whether what each plan provides or omits, or what each combination of the § 414(b)-(c)-(m)-(n)-(o) employer’s plans provide or omit, discriminates by race, color, religion, sex, national origin, or another applicable civil-rights factor. An employee-benefits lawyer might want to coordinate with one’s firm’s labor and employment practice.

Consider: Plans limiting pre-tax catch-up contributions for employees not subject to section 414(v)(7). The rules of [26 C.F.R. § 1.414(v)-2(b)(3)(i)] also apply to a plan that includes a qualified Roth contribution program and, in accordance with an optional plan term providing for aggregation of wages under [26 C.F.R.] § 1.414(v)-2(b)(4)(ii), (b)(4)(iii), or (b)(4)(iv)(A), does not permit pre-tax catch-up contributions for one or more employees who are not subject to section 414(v)(7). 26 C.F.R. § 1.414(v)-2(b)(3)(ii) https://www.ecfr.gov/current/title-26/part-1/section-1.414(v)-2#p-1.414(v)-2(b)(3)(ii).

It is not exempt since the CODA was effective after 12/31/2022. Must be an EACA. https://www.irs.gov/pub/irs-drop/n-24-02.pdf Q. A-1: When is a qualified CODA established for purposes of determining whether the qualified CODA is excepted under section 414A(c)(2)(A)(i) of the Code from the requirements related to automatic enrollment (that is, whether the qualified CODA is a pre-enactment qualified CODA)? A. A-1: For purposes of section 414A(c)(2)(A)(i), a qualified CODA is established on the date plan terms providing for the CODA are adopted initially. This is the case even if the plan terms providing for the CODA are effective after the adoption date. For example, if an employer adopted a plan that included a qualified CODA on October 3, 2022, with an effective date of January 1, 2023, then the qualified CODA would have been established on October 3, 2022 (that is, before December 29, 2022), even though the qualified CODA was not effective until after December 29, 2022.

The instructions for the 5558 don' say anything about being mandatory but do say: What’s New Beginning January 1, 2025, Form 5558 can be filed electronically through EFAST2 or can be filed with the IRS on paper. and the IRS website also says so: https://www.irs.gov/retirement-plans/form-5500-corner

I am finding conflicting advice as to whether Form 5558 e file is mandatory, if the Plan Sponsor otherwise has 10+ W-2's, 1099's etc that they file. I realize that e file capability became a reality last year. My question is, is e file mandatory when the Plan Sponsor has 10+ information returns that it files. Thank you.

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If CODA provisions are added at this time to a large profit sharing plan that was originally effective in 2021, does it have to be an EACA or is it exempt from this requirement because the plan was initially effective prior to 2022? Thanks in advance for any assistance.

Ordinarily, the 5-year rule is the 12/31 of the year containing the 5th anniversary of the participant's death. If death was x/x/2020 then 5th anniversary is x/x/2025 and entire benefit should have been distributed by 12/31/2025. However, and this comes from the IRS website where you can essentially treat 2020 as if it never existed. The excerpt below says inherited IRAs but earlier language also refers to retirement plans and I can't see them saying 2020 disappears only for IRAs. https://www.irs.gov/newsroom/coronavirus-relief-for-retirement-plans-and-iras Distributions from inherited IRAs are not required in 2020. If you were required to take a distribution within 5 years following the year of the account holder’s death, 2020 does not count toward the 5 years. So, you would essentially have six years, instead of five, to distribute the inherited IRA. Also, if the account holder died in 2019, you would normally be required to begin taking distributions by the end of 2020 to be able to take distributions over your lifetime. Since 2020 does not count, you have until the end of 2021 to begin taking distributions over your lifetime.

You've got it. Forget the CG and just think 2 HCEs and 2 NHCEs where you cover 1 of each. Yes, if the covered NHCE leaves then you would need to add the other ER and its NHCE.

That is my understanding.

As one TPA to another, it is another designation, and one that is obviously rare since there are so few, and sets us apart from other TPAs. (IMHO) As well, for non-attorneys and non CPAs, we can represent clients in front of IRS and audits, this giving us the advantage of levying a higher fee. After all, you get what you pay for, right???

I listened to a webinar today presented by a well-known industry expert. He made a comment about SECURE 2.0 Section 603 that surprised me. He made the comment that to simplify the administration of Roth catch-ups, a plan sponsor could amend the plan to only allow catch-ups in the form of Roth for everyone. I thought I must have misunderstood him because to me the proposed regs and final regs seem very clear that this is not allowed. However, when questioned, he commented that he believes the IRS will allow this and the third party document providers are preparing for this. Does he know something that no one else knows? Has anyone else heard rumors of the IRS taking this stance? Thanks

Hi Sami, Austin's response pasted from ERISApedia may prove helpful for your reference: My (unresearched) gut thought would be that the distributing Plan would determine the share attributable to earnings/basis of any In-Service distribution of Roth funds in the same manner it normally would (I imagine possibly by multiplying the ratio of earnings/basis against the amount of the Roth account being distributed), not by calculating in the manner that you normally would for a 402(g) refund (considering the earnings only since the contribution date). However, this would seem to provide an advantage to the Participant by allowing the gains on this 402(g) excess to have accumulated tax-advantaged. I wouldn't think the IRS would intend an individual gaining an advantage by circumventing the regs., but that is how I read the ERISApedia citation (specifically "Second, for tax purposes, undistributed excess deferrals are treated as if they were proper elective deferrals when contributed").

for The Benefit Advantage (Remote / Auburn Hills MI)View the full text of this job opportunity

Hi all, On reviewing a Plan Sponsor's payroll records/W-2s, I've identified that the owner's W-2 reflects total deferrals of $24.5k for 2025 (not catch-up eligible). Normally a 402(g) Excess distributions would be relatively straightforward, but in this case, the 'excess deferrals' weren't actually deposited in the Plan trust (to the tune of $5k, $19.5k actually deposited), which is why our system didn't flag the 402(g) Excess (as it would have on receipt). Let's say this was due to a missed off-cycle processed by the Plan Sponsor just for the owner to contribute these amounts. Another complicating factor, is their payroll report indicates that they added back a positive after-tax deduction of $1k, labeled appearing to be in order to correct this, so the funds appear to have not actually been withheld from his paycheck, but the W-2 does reflect them as withheld. In order to correct this, is the only acceptable method to fund the late deposit of the $5k EE deferrals then distribute them with accompanying 1099-R from the Plan Trust? Is there any other permissible solutions that don't include funding the excess amount, such as correcting the W-2 or issuing a 1099-R (no accompanying payment) reporting the $1k excess as taxable for a pre-4/15 402(g) correction? If the funds weren't actually withheld and the $1k excess was, in fact, paid to the individual, does any correction (other than possibly the W-2) need to take place at all?

Without looking I know about 10 in my area, so we actually CAN have a party! 😆

FYI, the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications lists 363 ERPAs. The list shows name and address, and can be searched by name or proximity to zip code. You can have a party and invite all your ERPA neighbors 🤣.

for American Trust Retirement (Remote)View the full text of this job opportunity

I think I know the answer but I wanted to check the following: Existing 401k plan for a sole-prop. The election for deferral amount had to be made by 12/31/2025 for 2025 as it cannot be done by 4/15/2026? After year end only applies for new plans. Am I correct?

I know of several people who are dropping (or have dropped) their ERPA designation - in their opinion, it simply isn't worth the hassle.

I doubt it. Its more likely that the process is just chaotic and full of issues. It has been since day one.

I renewed in July, 2025 for the 22,23 and 24 years. I showed the proper number of credits. First IRS said they never received my renewal and was placed on inactive. I know they received as they cashed my check I was told I'm 16 credits shy as well as 6 Ethics, which I am not. I wrote a "reasonable cause" as I had an 6 month recovery from two torn retinas, and asked for either a waiver or extension to obtain the necessary credits - just in case they are correct. How would I show the I completed and received the "additional" credits A new Form and go back to 2022 and list all credits, as well as pay another $140, or write in and tell them I have completed and show my backup? In the meantime I was told by an auditor that I can use Form 8821, but obviously can not represent myself as an ERPA until this is straightened out, which, pgiven the furlough could take another 90 days. Are they doing this to others in the hope that they can reduce the number of ERPAs (which is already ridiculously low)?

Just thoughts. Generally speaking, group health plans are not federally required to cover weight loss meds. Most of the plans I deal with would not cover them if simply for weight loss but might cover them if for some other medical issue, e.g., to control Type 2 diabetes or high blood pressure. Most of those plans would require preapproval. Employers, especially those with self-insured plans, have discretion to dermine their drug formulary. Since self-insured (and possibly one day with fully insured) offering the meds to one group versus another would be permitted if not discriminatory under §105(h). If different between plans, do the separate plans satisfy 410(b) coverage testing? If different for different groups within a plan, is the approach structured to meet 105(h)? how does the employer classify the employee groups? etc....

Thank you for clarifying.

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