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Does that adoption agreement also limit non-Roth elective deferrals to 50% of compensation?

For a profit-sharing plan, there is no notice that is required to be issued to participants in advance. If, however, the employer is applying to the IRS for a determination letter that the termination of the plan does not adversely affect its qualified status, there is an advance notice requirement that is applicable in that instance, much of which appears to be driven by when the employer files its Form 5310 with the IRS. Notice of intent to terminate is a term used in the context of PBGC-covered defined benefit plans and has to be provided to participants in advance of the anticipated termination date. In addition, if the employer is amending the plan to significantly reduce benefit accruals under a defined benefit plan or money purchase plan, there is also an advance notice requirement that generally varies from 15 to 45 days, depending upon the type of plan and the number of participants covered under the plan. See ERISA Section 204(h) and Code Section 4980F. However, neither of these provisions apply to a terminating profit sharing plan.

I go with how they treat them on their system. If they say the person is active and received compensation, then they are active. On the other hand, if the plan sponsor counts them as terminated and then rehired (and then re-terminated) each time they do a consulting gig, then that's terminated and no top heavy minimum. But most HR people won't go through that effort - at least until I explain to someone that they are costing the company money by keeping these people on the books as active.

Yes.

What I was referring to, Blue, is that in a refinance, if the new loan $14,000 is intended to start a new 5 year payback period you need to combine the new loan amount ($14,000) PLUS the amount of the loan being refinanced ($18,000). If the account balance cannot support the full $18,000 combined loan amounts, then the new loan must be paid back within the original 5 year period of the loan being refinanced. So if the original loan was started 3 years ago, and was not a residential loan, the refinanced loan would need to be paid back within the roughly two year period remaining on the first loan. Of course none of that matters if the loan program allows for two loans to be outstanding.

I have a client in the financial services industry with around 200 employees. They use the top paid group rules and HCEs are employees earning over around $370,000. Most of the NHCEs earn over $150,000. They use the after-tax feature to allow participants to reach the maximum annual deferral limit and make Roth conversions an option. When they were considering adding the after-tax feature, there really was no way to estimate utilization of the feature based on available census data. They provided employees with a detailed explanation of the how this feature would work and then polled the group to get a guestimate of utilization. Based on the poll results, they modeled discrimination testing. While the model passed, it was a a close call. They moved forward with the change and within a few years utilization increased and testing is no longer close to failing. The point of telling this story is sometimes the pathway forward to a plan design change is to educate and then ask if people are interested.

This is a good question. I agree that refunding prior YTD contributions attributable to the surcharge is aggressive because it's functionally the equivalent of a retroactive election change (employee paying a reduced EE-share of premium pre-tax through the POP for prior period), which is generally prohibited by the Section 125 cafeteria plan rules. That could in theory potentially disqualify the entire cafeteria plan, resulting in all elections becoming taxable for all employees. Prop. Treas. Reg. §1.125-2(a): (4) Exceptions to rule on making and revoking elections. If a cafeteria plan incorporates the change in status rules in §1.125-4, to the extent provided in those rules, an employee who experiences a change in status (as defined in §1.125-4) is permitted to revoke an existing election and to make a new election with respect to the remaining portion of the period of coverage, but only with respect to cash or other taxable benefits that are not yet currently available. See paragraph (c)(1) of this section for a special rule for changing elections prospectively for HSA contributions and paragraph (r)(4) in §1.125-1 for section 401(k) elections. Also, only an employee of the employer sponsoring a cafeteria plan is allowed to make, revoke or change elections in the employer's cafeteria plan. The employee's spouse, dependent or any other individual other than the employee may not make, revoke or change elections under the plan. So I agree that a prospective removal of the surcharge is the more prudent approach. I will say that I've gone wobbly on this issue sometimes where employees are covering a DP, get married to that DP, then fail to inform the employer of their new married status for some months. In some cases, employers want to retroactively undo the imputed income and permit pre-tax contributions for that period. I think that generally presents the same issue you're raising here, but I haven't strongly advised against it. Just as a reminder, there was a Tri-Agency FAQ clarifying that employers do not have to accommodate a mid-year wellness program incentive/reward/surcharge change in status. They can have a once-per-year requirement to qualify. Here's the guidance: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xviii.pdf Q8: A group health plan charges participants a tobacco premium surcharge but also provides an opportunity to avoid the surcharge if, at the time of enrollment or annual reenrollment, the participant agrees to participate in (and subsequently completes within the plan year) a tobacco cessation educational program. A participant who is a tobacco user initially declines the opportunity to participate in the tobacco cessation program, but joins in the middle of the plan year. Is the plan required to provide the opportunity to avoid the surcharge or provide another reward to the individual for that plan year? No. If a participant is provided a reasonable opportunity to enroll in the tobacco cessation program at the beginning of the plan year and qualify for the reward (i.e., avoiding the tobacco premium surcharge) under the program, the plan is not required (but is permitted) to provide another opportunity to avoid the tobacco premium surcharge until renewal or reenrollment for coverage for the next plan year. Nothing, however, prevents a plan or issuer from allowing rewards (including pro-rated rewards) for mid-year enrollment in a wellness program for that plan year. Slide summary: 2023 Newfront Wellness Program Guide

A couple of thoughts - how many of the HCE are presently maxing out on Roth Deferrals? Are there employer contributions (match, nonelective ) made each year? If so, are the HCE converting those amount each year? The employees that are already taking full advantage of the existing provisions are the ones likely to utilize the after-tax contribution --> roth conversion option. It has not passed, but there have been proposals around doing away with the ability to convert voluntary after-tax dollars to Roth dollars, so while I don't know the likelihood of any of those gaining traction, I wonder if if it worth adding the provision if folks think it might go away in a few years. FWIW - I often see these types of provisions in owner-only plans where ACP testing is a non-issue. So not only for large plans. And personal pet peeve: I hate the term "mega backdoor Roth conversion" I know you didn't make it up, so not directed at you. It's 100% a marketing term and just an in-plan Roth Conversion.

A person may get a notarial act (such as a notary’s certificate of having taken an acknowledgment of, or having witnessed, a spouse’s consent to support a participant’s qualified election) at the US consulate. And if there is no consular official, the Secretary of State may authorize others to do notarial acts. Such an act done by a consular official or other US-authorized person has the same effect as a notarial act done by a US State’s notary. 22 U.S.C. § 4215 http://uscode.house.gov/view.xhtml?req=(title:22%20section:4215%20edition:prelim)%20OR%20(granuleid:USC-prelim-title22-section4215)&f=treesort&edition=prelim&num=0&jumpTo=true 22 U.S.C. § 4221 http://uscode.house.gov/view.xhtml?req=(title:22%20section:4221%20edition:prelim)%20OR%20(granuleid:USC-prelim-title22-section4221)&f=treesort&edition=prelim&num=0&jumpTo=true

Yes, spousal consent would be needed. You can name a non-citizen as a beneficiary.

The plan loses its top heavy exemption if there are employees who are eligible for 401(k) but not for safe harbor contributions.