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I say no. A participant that elected to defer all their 401(k) in the first 3 months would be hurt by this change without any way to fix it.

As you note, you have zero average compensation for 415 purposes and where is the evidence of actual service? If it was an owner (not by attribution) who did not have net compensation because expenses exceeded revenue (but owner generated revenue) then I could see counting service. But if I'm an IRS agent looking at this, I'm thinking either the spouse was volunteering (and so not an employee) or maybe getting paid under the table, which opens all sorts of other scrutiny.

Interested to see if anyone will respond. We only send Relius statements out for our pooled accounts, otherwise they get them from the investment houses. But we don't email the Relius statements to participants, we put them in the valuation for the plan sponsor to distribute.

I recently saw a DB plan that was overfunded because the owner died suddenly. The son inherited the business (with the attached retirement plan). The business wasn't worth much in an of itself, but the tax attorney that the son hired found a buyer. The buyer happened to have an underfunded DB plan. The buyer merged the two plans, solving his underfunding issue. The son got cash from the sale of the business (and the plan), the buyer got their plan well funded for a cheaper amount than an outright contribution would have cost. Seemed like a win all around. Maybe the H/W can take their benefits and figure out something similar to do with the excess left in the plan? Not sure it will work, just sharing an idea.

You'd still need to satisfy 415 and multiple annuity starting date rules.

Thank you very much Bill.Presson, David Rigby, shERPA, and Effen for your insights and time. As usual, your knowledge is much apprec iated. It seems that the new actuary is not aware of the outstanding fees.