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Meh. You can do it if you like but it will only provide clarity to those who choose to read it carefully, i.e. no one.

Anything you do that increases benefits will have to satisfy nondiscrimination. You don't describe any of the circumstances that we would consider in dealing with this - amount/percentage of over funded status, number and ages of owners, if owner benefits are tracking at 415 limits, the relative number of employees/participants, how mature the plan is and whether the plan is aggregated with a DCP to pass testing or you have combined plan deduction limits that apply. A joint discussion with the plan sponsor and investment advisor is warranted because a 21% return sounds great but at what risk and, if owner benefits are at or near 415, why construct the portfolio in that manner? This is a much different discussion if you have a $10M plan that just created $1.5M in excess versus a $1M plan that created $150,000 in excess. Again, depending on particular circumstances, we usually recommend a number of alternatives, sometimes individually and sometimes in combination, including reducing future contributions, amending to increase benefits (usually a one-time balance increase, and possibly reducing contribution to CBP to offset additional PS contributions that are often needed to satisfy testing), paying eligible plan expenses from plan assets, and retaining a cushion for various reasons such as the 110% threshold to pay HCE lump sums or protecting against a down year in the business or the market (although ROR ICR does that for most part). This is a good problem to have but the key is to not let the over funded position get out of control - but what constitutes out of control depends on the particulars surrounding the plan. Good luck.

Austin - just a guess - perhaps due to the fact that some vendor like TIAA may allow loans on the contract that are not paid through payroll deduction, etc., and are really between the participant and the vendor?

His profit sharing can be $38,000 (63,500 - 25,500). This will result in $19k "regular" deferrals,$ 6,500 catch-up. Add $38k in PS, and you are at the max of $63.5k. (As long as the income allows it) $37,000 can be allocated to the wife, as long as the income allows it. Pro-rata doesn't matter since the first owner is at 415 max.

Yes, you can recharacterize deferrals as catch-up due to an excess of the 415 limit. Check the plan document, hopefully it says that even with the pro rata allocation, you can limit contributions to the participant's 415 limit. Assuming that it does, then you should be fine. If not, allocate as much as you can under the current formula and do the rest with an -11(g) amendment. Either way I would recommend changing the formula to individual groups going forward.

Availability of loans is a benefit, right or feature subject to nondiscriminatory availability. If participants are not aware of the loan provisions in the plan, then it can not be effectively available to them. ERISA sec 102 only says that a SPD "shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan." While it doesn't specifically say that a loan program has to be included, I would think a "sufficiently comprehensive" document should include it. Have you asked Relius about the difference in their 401(k) and 403(b) documents? What did they say?

The question is: why were you working on the Sunday of a holiday weekend at 11 AM (EDT)?

402(f) notice is required to be provided for any eligible rollover distribution. RMD is not an eligible rollover distribution; therefore, no notice. The content of the notice describes how you can roll over your distribution and continue to defer taxation on it. With an RMD you do not have the option to roll it over, so providing the notice would actually be misleading to the participant.

I'd be concerned why a 1099-R was not issued. Are you sure it wasn't merely defaulted and not deemed? The term 'deemed distribution' implies the participant received proceeds and should be taxed on them.