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There is nothing stopping them from using the 12/31/2024 stock price as long as it all happens on or before 12/20/2025. There is nothing you can do. This is common and done all the time in this industry. The plan is on very solid ground. If you hire a lawyer you will be spending money to only lose. I would add it seems hard to know the value will 3x. But this is the reason ESOPs do what is happening. Management doesn't want to compensate former employees but want the increase to go to current employees who they see as being the primary contributors to the increase at this point.

If the plan was not terminated by corporate action (resolution, amendment, etc.) prior to the sale closing then it came over to the buyer as a result of the transaction and the buyer can maintain for however long it desires and contributions can continue. If the plan was officially terminated pre-sale then the only contributions that should have been withheld and subsequently remitted were those attributable to pre-sale payroll and receivable as of the sale closing date. If the buyer now has the plan, a termination thereof would mean a one year wait to establish another 401(k) if subsequently desired.

Hi, One of the plans is scheduled for termination due to the stock sale, but it has come to our attention that the acquiring company does not offer a 401(k) plan. Typically, under such circumstances, the plan should terminate prior to the sale date, with all contributions ceasing accordingly. However, in this case, while the stock sale date is set for September 30, 2025, employee contributions are expected to continue until December 29, 2025. Could you please confirm whether these post-sale contributions can be accepted? Additionally, if there are any specific compliance considerations or steps we need to take in this scenario.

BG5150, I see a responsibility as you do. If someone recommended a safe-harbor provision, that person ought to have provided information to explain not only the reasons supporting the recommendation but also the conditions and consequences of the provision and the advantages and disadvantages of using the provision. Further, some might say an explanation ought to be no less clear, conspicuous, or understandable than the recommendation was. And here’s a point for many service providers to consider: If a person not licensed to practice law provides tax or other legal advice, the standard of care is no less than what a professionally behaving lawyer would have done. This is not advice to anyone.

I guess in a narrow view, nobody HAD to explain it to the ER. It's up to them to understand the plan document they are signing, and they are the ones (usually) tasked with operating the plan. However, I'm guessing someone approached the ER about setting up the plan and steering them to a SH arrangement. Whoever did that should have at least explained it to the ER the mandatory contribs and the conditions under which they would be made. It's certainly possible that the ER just tuned out and/or only heard the PS part of the funding. Or maybe thought the SH and PS were the same... I guess they can remove the SH for '26 and just do ADP testing. And tehy doen' even have to give refunds! They can do a QNEC. And guess what? Those don't even have to go to those employed on the last day of the year either!

Since I lost my job in mid-January but had an active FSA at that time, were my wife’s HSA contributions still allowed for the rest of the year? Yes, your spouse (assuming a) health FSA coverage ended in January, b) you didn't elect COBRA for the health FSA, and c) she no other disqualifying coverage from 2/1 forward) became HSA eligible as of February. If partial-year eligibility applies, is the maximum HSA contribution prorated to 11 months, meaning 11/12 of $8,550 ($7,837.50)? Yes, I agree. Although you could take advantage of the last-month rule if you wanted to increase that to the full $8,550. I've copied the details below. I haven’t used any of the $1,100 in the FSA. The FSA provider shows the account as active and says I can still use the funds. Is that correct? Probably not. It's possible they have a very long run-out period. But a run-out period doesn't affect HSA eligibility regardless. https://www.newfront.com/blog/the-hsa-contribution-rules-part-ii Contribution Limit for Partial Year of HSA-Eligibility: The Last-Month Rule Employees who enroll in the HDHP mid-year are generally subject to the proportional contribution limit above. However, a special rule known as the “last-month rule” (alternatively referred to as the “full contribution rule”) may apply to permit the mid-year enrollee to contribute up to the full statutory limit—even though the employee was not HSA-eligible for the full calendar year. In order to qualify for the last-month rule, the employee must satisfy both of the following two conditions: The employee is HSA-eligible on December 1 of the year at issue; and The employee remains HSA-eligible for the entire following calendar year. This creates a 13-month “testing period” that applies to determine whether the individual has met the last-month rule requirements. The mid-year HDHP enrollee must be eligible on December 1 through the entire subsequent calendar year to contribute up to the full statutory limit—as opposed to the standard proportional limit—for the year in which the employee enrolled in the HDHP mid-year. Example 2: Kris enrolls in HDHP coverage on October 1, 2025 and is HSA-eligible continuously through the end of 2026. Result 2: Kris can contribute up to the full statutory limit (as opposed to the standard proportional limit) in 2025 by taking advantage of the last-month rule. Kris qualifies for the last-month rule in 2025 because he was HSA-eligible in the 13-month testing period from December 1, 2025 through December 2026. If Kris had not qualified for the last-month rule (e.g., enrolled in a standard HMO in 2026), his 2025 contribution limit would have been 3/12 (1/4) of the contribution limit. The IRS provides a useful summary of the last-month rule in Publication 969 and in the Form 8889 Instructions. Mid-year HDHP enrollees who contribute to the statutory limit but do not satisfy the 13-month testing period by failing to remain HSA-eligible will be subject to income taxes and a 10% additional tax on the amounts contributed in excess of the statutory limit. 2025 Newfront Go All the Way with HSA Guide

Or, differently asked, did anyone have a duty or obligation to explain this to the plan sponsor? (And, was it explained, but the plan sponsor was inattentive?)

BG5150, thank you for the reminder to look into already published administrative law. If all is adjusted before a W-2 wage report is filed or furnished, might one say there is no failure that calls for even a self-correction?

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Is this benefit provided under an employment-based employee-benefit plan? If so, is the plan ERISA-governed? If so, one presumes the plan’s trustee or administrator must administer one’s responsibility “in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this title [I] and title IV.” ERISA § 404(a)(1)(D). Is the death benefit provided by a life insurance contract, from the plan’s trust, or from an employer’s assets? Is there a written plan? If there is a life insurance contract, does the written plan make the life insurance contract a part of the plan such that the life insurance contract also is in the writings “governing the plan”? Of “the documents and instruments governing the plan”, do they state a provision about an unlocated beneficiary? Do the documents state or omit a provision for giving up a beneficiary’s death benefit? If there is a forfeiture provision, in what circumstances does it apply? Without a supporting plan-document provision, I would be reluctant to deprive a participant-named beneficiary of a death benefit merely because the plan’s administrator has not located the beneficiary. Does the plan set a time limit on a beneficiary’s claim for the benefit? Does the plan set a time by which a death benefit must be paid, even as an involuntary payment? This is not advice to anyone.

My current provider for both val and 5500 programs had informed me of a 10% jump in monthly fees which I find a bit too high (I have been using them for 30+ years). I think I need to look into a more modern and 21st century system. I use it primarily for CB/DB and combo plans and need simple DC as well (I do not deal with RKs) as good testing system. I would appreciate your experiences with other systems (except for Relius). Thank you.

A participant of a welfare benefit fund passed away. However, his primary beneficiary has been deported and the plan officials have been unsuccessful in attempt to locate her. Can the plan treat the beneficiary as having predeceased the participant and make the benefit payable to any contingent beneficiary or, if none, the plan's default beneficiary? Alternative, can the plan treat the beneficiary as a missing beneficiary and treat the death benefit as it would with respect to any other missing participant or beneficiary under the plan?

Did no one explain this to the client during plan setup?

Is there something in EPCRS that addresses the issue of an Employer mistakenly deducting (from a paycheck) and depositing Roth funds for a participant when the ppt's election was pre-tax? In other words I would correct this int he same manner as in my example above, regardless of its relevance to catch-ups.

Someone is confused and I hope it's not me. I was reading someone's post and i believe it read "you can't avoid LTPT. I was also reading a few articles that one will never need to be concerned as long as the plan is amended, if need be, for eligibility to be eligible for plan entry to delete reference, by amendment, to elapsed time, 1 year for deferrals, safe harbor (of course) but leave the provision and any reference to 1 year/1,000 hours only to employer non-elective contribution. I'd be curious how many have done this and if not, why not.

Anyone with a different view?

QDROphile, thank you for your helpful and thought-provoking explanation.

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Yes, I'd allow.

Last time, years ago, when I explained my aversion to naming the “employer” as plan administrator, I got pushback with the perfectly reasonable explanation that with respect to “small” employers my concerns were not well founded and my recommendations were impractical. A fair point. For sole proprietors, and some other businesses with a limited number of active owners, naming the employer as plan administrator is probably not worth much worry. I hope that those active owners understand that they are fiduciaries, and what that means, including potential personal liability. With respect to more complex businesses, the concerns are based on a corporate and agency law. To avoid need for a legal treatise, the practical question to address when the employer is the plan administrator is, “Who is the fiduciary?” Or, asked another way, “Who will be the warm body sitting behind the defendant’s table in a fiduciary lawsuit?” That person has an interest in 1) knowing that they are a fiduciary because without that knowledge, it is impossible to act in accordance with fiduciary standards (attention is the first requirement of a prudent person), and 2) being covered by appropriate insurance (e.g. E&O, D&O, special ERISA policies). To illustrate, if I were a plaintiff’s lawyer or the Department of Labor pursuing a claim of fiduciary breach, and a corporation were the “employer” named as plan administrator (without further specific identification or express delegation), I would name every individual board member and executive officer personally as defendants. And let us not forget the poor HR administrator, who is always on the front line of dealing with benefits and may be a fiduciary by default because they are forced by practicalities to engage in fiduciary activity without the pleasure of being named as a fiduciary. Maybe most of those people could get themselves dismissed, but it would not be fun or happy. This is how the “small employer” exception makes sense. A single owner who also handles all executive functions is on the hook as “employer” no matter what because there is no one else to bother. That is the crux of it. How best to identify the plan administrator, and to align fiduciary responsibility, depends on the organization, its personnel, and its circumstances. There is not an arrangement that fits all, and the appropriate arrangement is often not given any thought when a plan is adopted or restated. I suspect you were asking for some specific models. I am playing the lawyers card of “it depends”.* The organization could name the “employer” as plan administrator, but then a lot of other actions and documentation would be required to achieve the proper identification and alignment. For the most part, that ain’t gonna happen. Even if it does, the Department of Labor can be so ham-fisted that it won’t understand or respect the niceties, and it likes as many people as possible to sweat personal liability. *For a corporation, how about designating the CEO as plan administrator, with authority to delegate, including the authority to designate other named fiduciaries. Depending on circumstances, the CEO will delegate authority rather than directly undertake the functions. The CEO’s corporate responsibility for oversight of company business, and fiduciary responsibility for oversight of persons the CEO names as fiduciary, overlap nicely. For a large organization, corporate or partnership (e.g. professional services), I like fiduciary committees, which can be designated as plan administrator, and populated by a CEO or equivalent. The CEO is still a fiduciary for this purpose.

Follow up to earlier thread Hello @Brian Gilmore, thanks for sharing these details. We’ve found ourselves in a very similar situation and would appreciate your guidance. During last year’s open enrollment for the current year (2025), I enrolled in a PPO plan with my employer and elected an FSA with a contribution of $1,100. I was the only one covered under that plan. At the same time, my wife enrolled in an HDHP through her employer, covered herself and our daughter, and opened an HSA. We didn’t realize then that an FSA and HSA can’t coexist between spouses. I was laid off in mid-January. My employer had already opened the FSA and deposited the full $1,100, even though only $43 was deducted from my paycheck. I didn’t learn about the account until recently when I contacted the custodian to close an old HSA. After I lost my job in January 2025, I moved to my wife’s HDHP, and she increased her HSA contributions with the goal of reaching the family limit of $8,550. After reading your thread, she has now asked her HR team to stop contributions for December. With that context, I’m hoping you can help confirm a few points: Since I lost my job in mid-January but had an active FSA at that time, were my wife’s HSA contributions still allowed for the rest of the year? If partial-year eligibility applies, is the maximum HSA contribution prorated to 11 months, meaning 11/12 of $8,550 ($7,837.50)? I haven’t used any of the $1,100 in the FSA. The FSA provider shows the account as active and says I can still use the funds. Is that correct? Thanks again for your insights, Brian. Your expertise is genuinely helpful.

I'd love the thinking of folks who are more well-versed in SIMPLEs. 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 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?

Hello, A former employer offered an ESOP payout in lump sum. They will be diversifying the assets for anyone who does not take the lump sum, and the investment will be into a money market account. To reframe this more concisely, my shares will be purchased back by the company prior to 12/31/2025. I know the company is likely experienced more thanv a 3X increase in share value due to their rapid growth in the past year. The most recent valuation was at 12/31/2024. Will they need to perform an interim valuation, or will my shares be valued at the 12/31/2024 value, which is almost certainly 1/3 or less of the current value of shares? Anything I should do? Wondering if there are attorneys who specialize in this area whom I should consult with, or if this is a lost cause. Thank you!

I wanted to chime in with my personal experience. I am hitting age 65, and the SSA sent me two of these forms - both related to a company I worked for and left in 1998. One shows the name of the company, and a report from 1999 that I would have a pension of $150 a month. The other shows a successor company's name, at the same administrator address as on the first form, as a 401k plan and a balance reported in 2000 of $9,700. I checked my records, and found that I had rolled over about $4,000 from that company's pension fund in 2000, and rolled over $10,000 from my 401k account at the company to my rollover IRA account in 2004. Thus, in fact, it appears I have nothing left of a pension or 401k at that company or its successor. From the discussion above, this is due to there being no requirement at that time for SSA to be updated that withdrawals occurred. Interestingly, I have been receiving a (small) pension from a company I left in 1988, and the SSA did not send a notice for that company.