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It's been a while since I've seen this one but we used to get it occasionally and often enough to added it to a form letter as one of the check the box entries. I don't recall ever getting any push back from the accepting institution. q The distribution due the participant named above is from a Plan intended to qualify under Internal Revenue Code §401(a).

I suspect that this particular provision was written well before the final bill was passed, and before the huge inflation adjustments that took effect for 2023 were known. In hindsight, we can see that the $10,000 limit is not likely to ever apply. The increased catch-up limit goes into effect for 2025. I suspect the exact dollar amount that applies for 2025 will be revealed in Fall 2024 when the IRS publishes the annual inflation-adjusted limits for 2025.

This is the text from the link justanotheradmin posted. Notice 2016-16 doesn't say "or vice versa" in the final bullet point below, but the commentary on the website does. Prohibited mid-year changes The Notice provides the following list of “prohibited mid-year changes” that may not be made to a safe harbor plan, unless the change is required by applicable law or court decision. A mid-year change increasing the years of service for the vesting schedule for a safe harbor plan consisting of a Qualified Automatic Contribution Arrangement (QACA); A mid-year change to reduce or narrow the group of employees eligible to receive safe harbor contributions; however, this does not limit the ability of the employer to amend a plan mid-year to change eligibility service crediting rules or entry date rules for employees who have not yet become eligible to receive safe harbor contributions; A mid-year change to the type of safe harbor, for example, a change from a traditional safe harbor to a QACA, or vice versa;

You can have the different cafeteria plan components on different plan years within the same cafeteria plan. I've copied the cite below. Lots more to say on each issue, but short version is to try to avoid whenever possible: The health FSA on a different plan year from the medical plan if they offer an HDHP. This will cause tremendous HSA eligibility headaches. The dependent care FSA on a non-calendar plan year. Coordinating the $5,000 calendar-year limit with a non-calendar plan year is another big headache. Prop. Treas. Reg. §1.125-5(e)(3): (3) Separate period of coverage permitted for each qualified benefit offered through FSA. Dependent care assistance, adoption assistance, and a health FSA are each permitted to have a separate period of coverage, which may be different from the plan year of the cafeteria plan.

Getting ready to post another quandary, and noticed I had responses so I thought I would share this for any Datair users: I ultimately contacted Datair, and they explained that I had to check a box in Master Plan on the Assumptions / 410(b)-401(a)(4) Screen. The box says Add Comp from Sub Plans if Different Employers. Problem solved. Compensation earned in both entities was aggregated. This was, by the way, 2 separate retirement plans. Thank you!