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Since there are very good reasons to be suspicious of the request, you and the plan's fiduciaries need to protect the plan from potential fraud. Otherwise, if the request is fraudulent, then there will be a lot of finger-pointing (and potentially litigation) about who will make the plan and participant whole. If there is a concern about inviting the individual into your office or the client's office, consider choosing a public, safe place to meet. This could be at a bank or even at a police station, depending upon the level of concern. The purpose is to arrange for a notary or plan representative to validate the individual's identity. Ideally, someone who could recognize the participant could be available. If the level of concern is at the level that the plan fiduciaries are comfortable just having an election form notarized without their being present, then consider listing on the document being notarized specific items for the notary to confirm was presented at the signing. This could be at least one item with a picture (like a driver's license), and any additional documents that would acceptable like an original Social Security Card, Medicare ID or something similar. Ultimately, it is the plan fiduciaries call on how to approach the issue, but you need to make it abundantly clear to them that you believe additional steps need to be taken to confirm the participant's identity. We have not dealt with this particular set of circumstances, but have had a couple of incidents where we expressed our concerns to the plan fiduciaries and worked with them to document the participant's identity to their satisfaction. These are just some thoughts and is not advice to anyone.

Well done! I can echo, after 40+ years as an actuary, it was difficult to "let go", so I endorse your gradual approach. Retirement is great!

@S Derrin Watson, you have been a trusted advisor, teacher, lecturer, and author for my entire career in the industry. I can easily say that you, @Ilene Ferenczy, and Sal have shaped me into the practitioner I am today. I wish you the best as you start this new chapter of your life!

😮noooo!!! Well, for the rest of us. Thanks for everything over the years, Derrin, and enjoy the wind-down!

Darrin you are the one and only person who has ever done singing continuing education classes that I have been in. You bring up your name in this industry and the conversation turns to the signing instructor. You also taught all of us a lot in those classes. Enjoy retirement.

Echoing @Belgarath and wishing you the best on your gradual exit from the industry. Hopefully others will continue your legacy so the next generation of service providers will know "who's the employer?" After 40+ years in the industry myself, I must say that my fondest memories of your contributions to us all were your musical renditions that added spice to otherwise boring and mundane (to most) topics. Enjoy life!

@Connor and @Belgarath, thank you both!

It isn't really possible to adequately describe the profound impact (all good!) that you have had during my career in this business. Congratulations on the "slowdown" - and from a purely selfish standpoint, we are delighted to hear that the teaching and the ASK will still be on the table for now. Best wishes!

Hi, ho, Silver! We all wish you the very best as you enter this new phase of your life. We have valued having you as a resource, and we are glad that we will still be working together with ERISApedia. Be well, my friend, enjoy your life and family, and know that you are always in our thoughts. We love you - Ilene, Alison, and the rest of us at FBLC

In 1977, as I began law school, I started working as a law clerk and was quickly given responsibility for the firm’s qualified plan practice. When I passed the bar in 1980, I stepped fully into a career that has now spanned more than four decades. As I begin to slowly wind down those years as an ERISA attorney, I am deeply grateful for the opportunities that have come my way and for the encouragement and help of so many good men and women. I never dreamed, in the ’70s and ’80s, where this practice would take me. As this year began, my ERISA work fell into six main roles: I’m an author. I have written or co-authored five books dealing with retirement plans, and am nearly done with my sixth—the ERISA Fiduciary Navigator eSource—all published by ERISApedia.com. I head the ERISApedia ASK service, where my protégé, Adriana Starr, and I answer questions from ERISA practitioners. I present webcasts and live seminars on retirement topics. I draft plan documents and interim amendments on behalf of the Relius division of FIS. I serve as of counsel to the Ferenczy Benefit Law Center. I assist some clients in a private practice. One of the observations that has struck me over the years about the Employee Retirement Income Security Act is that it never defines “retirement.” My own working definition has been “separating from service once you’re old.” But the older I get, the older “old” gets. Still, as I near RMD age (even after SECURE 2.0), it's time to start thinking about saddling up and riding into the sunset. I envision retirement as gradually dropping things out of the saddlebags. So, with mixed emotions, I announce that I will no longer be acting as of counsel to the Ferenczy Benefit Law Center or conducting a private practice. I will consult on special cases, but otherwise, for now, my professional endeavors will focus on writing, teaching, FIS, and the ASK service. Planning for the financial side of retirement has been the easy part. The emotional and professional side is more challenging. My hope is that a slow and gentle ride toward tomorrow will make that transition easier. I am profoundly grateful to the colleagues, clients, and friends who have shared this journey with me—and I look forward to continuing to write, teach, and cheer you on from slightly lighter saddlebags.

for Leading Retirement Solutions (Remote)View the full text of this job opportunity

This is simply a general discussion to make sure I understand the concept properly. The question I am asking and trying to confirm my understanding: the Roth catch up is solely based on lookback salary regardless of ownership, salary is based on w-2 box 3. Looks like sole props and partners with k-1's are exempt from this. So, per my example above and my understanding, the owner who makes 50k in salary does not need Roth catch up i.e. normal catch up. One more thing, as explained by a friend, the plan needs to have Roth provisions in place before the first Roith catch up contribution. Any comments/corrections/missed information?

I have a client who just got a call from a "former participant" requesting to cash out his profit sharing plan account balance. However, the caller (1) mispronounced the participant's name, (2) lacked an accent even though the participant had a heavy accent, and (3) didn't seem to know the person he was talking to, even though she had worked with the participant for 20 years. She's "nearly 100%" sure the person she spoke to is therefore NOT the participant. She suspects it may be his adult son. Where do we go from here? My initial thought was to ask the caller to come to the client's office to sign benefit election paperwork in person, although I really don't like the idea of inviting the imposter into my client's place of business. I'm now leaning towards "requiring" that the forms be signed in the presence of a notary, then scrutinizing the signed forms (if he returns them) and reporting to EBSA if necessary. Anyone dealt with something like this?

for CPS, Inc. (Los Alamitos CA / Hybrid)View the full text of this job opportunity

Sure (although those do help keep the lights on around here ...). Two methods, depending on how you use your feed: Method 1: Create a custom Activity Stream (cleanest) Go to Activity > My Activity Streams > Create New Stream. Under Content Types, select what you want (usually Topics/Posts). Scroll to Forums and uncheck the forum(s) you want to hide. Save the stream. Click the star to make it your default stream. This becomes your personal feed; the excluded forum will never appear. Method 2: Clone the default “Unread Content” stream Open Activity > Unread Content. Click Show Filters. Under Forums, uncheck the forum to hide. Click Save as New Stream. Name it (e.g., “Unread – No Jobs”). Star it as default.

Is there a way to get the job listing posts out of my stream? I find they are clogging up my feed.

A caution for others who might do one or both sorts for who might be § 414(v)(7)-affected: An employee who’s 49 at the beginning of a year might turn 50 by the end of the year.

THANKS PETER! This is very informative - I do appreciate it. I'm sometimes disgusted at how much I don't know after all these years in the business.

If it's owner only, why not just add it anyway?

If a portion of the settlement might be “back pay” for wages (or, arguably, self-employment income) that would have happened had the claims complained-of not happened, there might be some opportunities for applying a participant’s elective-deferral election, matching or nonelective contributions (to the extent the plan provided), and years of service (possibly for eligibility, benefit accrual, and vesting). “Back pay. Payments awarded by an administrative agency or court or pursuant to a bona fide agreement by an employer to compensate an employee for lost wages are compensation within the meaning of section 415(c)(3) for the limitation year to which the back pay relates, but only to the extent such payments represent wages and compensation that would otherwise be included in compensation under this section.” 26 C.F.R. § 1.415(c)-2(g)(8) https://www.ecfr.gov/current/title-26/part-1/section-1.415(c)-2#p-1.415(c)-2(g)(8). But the details of how to write the settlement agreement; how to allocate amounts to particular plan, limitation, and tax years; and how to time and document elections are tricky. And there are other employee-benefits issues. If your client does not have a regularly engaged employee-benefits lawyer or that lawyer wants to add one who is specially knowledgeable for this situation, Bradley Horne (Super Lawyers Rising Stars: 2024, 2025, 2026) at Smith & Downey has a developed knowledge of how to handle the retirement, health, and other employee-benefit plans’ aspects regarding settlements of employment-related disputes. https://www.smithdowney.com/professionals/bradley-j-horne/

I agree. We've also had DOL audits (excuse me, "investigations" - we had a DOL "auditor" get snippy when we referred to her as an "auditor" rather than an "investigator") where the response was identical - "get a bond" - and no penalty was imposed.

Agree. See Peter's point below. I assumed not 50 by EOY, and you know what assuming can do...

It seems safe to omit, but they also can either: add Roth just "in case" / eliminate catch up contributions / eliminate catchcup contributions for anyone earning under $150,000.

At this point, going on nearly NO details - just a quick second-hand question based on a phone call from a plaintiff's attorney. We will of course be telling the client to talk with his legal counsel. But as much as I understand the situation so far: A participant terminated employment in 2023. He was an owner, and was bought out. Apparently, there is some sort of a lawsuit - the nature of which I have no idea, but the terminated participant is apparently getting some sort of settlement, and wants to know if he can contribute to the 401(k) for 2025 to save on taxes. The plaintiff's attorney wants to talk to us, apparently. This is way above my pay grade/knowledge, but I'd like to have some idea for my own background. I "think" I generally have an idea that a "restorative payment" which is determined under the facts and circumstances (Revenue Ruling 20something-25 - can't remember specific number) is not considered a contribution subject to 404, 415, etc., etc.) But this dealt with fiduciary breach-type situations as I recall. Assuming for the moment that this lawsuit is for other reasons, perhaps wage issues, unjust termination of employment, whatever, if the settlement is considered wages, then if he was still employed by the employer, he should be able to defer up to the normal limit. But, since he terminated in 2023 I don't believe he could defer into the plan. Could he? Please don't waste a lot of time on this, because as I said, it'll be handled by the client's ERISA attorney, and/or the plaintiff's attorney and/or tax counsel. But for my own edification, if you might have any quick general info based on your experience, I'd be grateful for anything you might care to share. We've been fortunate to never have run into this situation. Thanks! P.S. - The Revenue Ruling I was thinking of is old - 2002-45. No wonder I couldn't remember...

BenefitsLink neighbors can tell us if I’m guessing wrong, but I guess the conventional approach is to treat the plan as having the provision needed to tax-qualify the § 401(k) arrangement, then recognizing a failure to administer that assumed-in provision as an operational failure.