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Might this speak to your question? “The account balance is increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date. For this purpose, contributions that are allocated to the account balance as of dates in the valuation calendar year after the valuation date, but that are not actually made during the valuation calendar year, are permitted to be excluded.” 26 C.F.R. § 1.401(a)(9)-5/Q&A-3(b) (emphasis added) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401(a)(9)-5.

to expand on Lou's answer: DOL credentials are personal and not employer-related. So, say you are have been signing the 5500 (as an employee of) for BG5150's Pension Company 401(k) Plan for three years and then leave the firm (get out!). Then you start work for Lou S's Even Better Pension Company and they want you to sign their 5500. You would use the same credentials.

First, as always, check the plan document to see if it says what to do regarding incorrect contributions (it may have general instructions as opposed to specific match-related issue). Absent plan instructions, I would forfeit the incorrect excess match and any related earnings, leave in the plan and use according to plan instructions.

You don't need to be enrolled. You just need DOL Credentials yourself to submit the file. The software you have can probably walk you through the process.

That used to be the case for me, but at this point most prefer that we file for them anyway.

Why does an owner-only want a safe harbor plan?

If there is no Treasury regulation, a tax return might assert the taxpayer’s interpretation of the statute, and may do so with attaching a Form 8275-R. https://www.irs.gov/forms-pubs/about-form-8275-r. If a tax-return position is supported by substantial authority (which may be “a well-reasoned construction of the applicable statutory provision”), one need not attach Form 8275 to avoid an understatement penalty. 26 C.F.R. § 1.6662-4(d)(3)(ii) https://www.ecfr.gov/current/title-26/part-1/section-1.6662-4#p-1.6662-4(d)(3)(ii). If a tax-return position is less confident than substantial authority (which can be less confident than more likely than not [51%]) but has at least a reasonable basis and is disclosed (using Form 8275), this too avoids an understatement penalty. https://www.irs.gov/forms-pubs/about-form-8275. A certified public accountant who obeys AICPA professional-conduct standards does not recommend a tax-return position or prepare or sign a tax return taking a position unless the CPA “has a good-faith belief that the position has at least a realistic possibility of being sustained administratively or judicially on its merits if challenged.” Or, a CPA may prepare or sign a tax return that reflects a position if the CPA finds “there is a reasonable basis for the position and the position is appropriately disclosed.” Recordkeepers, third-party administrators, and other service providers often wish for guidance to interpret recent (and sometimes not-so-recent, or even decades-ago) tax legislation about retirement plans. But an absence of guidance sometimes affords a wider range of interpretations.

Until the IRS releases regulations we will not know what constitutes substantially the same employees. For some IRS purposes, substantially means 70%-90% but who know what % the IRS will land on.

Some signers use for Form 5500 reporting authorizations a signature that is deliberately illegible and unlike the signature the signer uses for her personal banking, credit-card, and other financial matters.

Your written authorization no doubt includes the disclaimer that the client is aware their hand signed form will be open to public inspection on the EFAST site. That usually causes most (not all) of our clients to opt for getting their own credentials.

I agree. I don't think it's allowable to match Roth deferrals at a different rate than pre-tax. match should be calculated on the combined pre-tax and Roth as if they were one deferral.

Agree with Zeller why does owner only need a SH? If there are future employees to worry about set it up a regular 401(k) for 2023 and make safe harbor effective for 2024. If they really need safe harbor for 2023 sounds like you have 2 options. Withhold the contributions starting October 1 and deposit as soon as the contract is setup with possible late 401(k) deposits or open a bank account in the name of the Plan to hold the deposits until the they can be transfer to American Funds and allocated to participant accounts.

No, you just need you own personal DOL signor credentials as Preparer and attach the client signed Return to the filing.

Almost all "transfers" of a single employer 401k plan moving into a PEP are Plan Mergers, not Plan Terminations. I've never had one that was a "termination". No step-up in vesting, no "distributable event" for the prior plan. Adoption into a PEP will constitute a "restatement" of the prior plan, btw. No need to restate a plan as long as it is handled before the restatement deadline via the plan merger. On the final Form 5500 for the single employer plan, it should indicate the name of the successor plan, EIN of the PEP Plan Sponsor (PPP). Testing is aggregated for the full year. Annual 402(g) limits still apply (no "double dipping" in deferrals....). Lots of moving parts in a PEP. Proceed with caution if you haven't done any.

Just an FYI - if a participant goes online to the website of the large recordkeeper for our plan, there is a loans and withdrawals section that outlines all available distribution options for a participant based on age, whether there is a rollover account, maximum loan allowed, etc. Clicking on any of these gives the participant more information about that option. I assume the other large recordkeepers have a similar format.

FWIW - it seems like this is the operative phrase. So I agree, for your first example, the credit should apply. When you get into the weeds where some employees were covered and some weren't, then to my way of thinking, since this is a tax credit situation, it is the CPA's call - some of them are aggressive, some conservative - so who knows. I'm not aware of any firm guidance on this question.

I would not recommend putting all of the different kinds of distributions available under the plan on one election form. It may, however, be helpful to the participant if there is a single description of all of the kinds of distributions that are available along with highlighting some of the decision points the participant should consider in choosing the type of distribution. The description would then point to the appropriate form tailored to each kind distribution. This is an approach that is similar to existing procedures for requesting a distribution, although as you note, the number of choices has expanded significantly. Arguably, the SPD should fulfill this function, but we should acknowledge that SPDs can be unwieldy, or blandly generic and less detailed than may be needed if there are many choices available to the participant. Some reasons for keeping forms separate are: Different types of distributions can require different information. Often a participant looking to take a distribution fills out question of every section on a form in fear of leaving out something that causes the request to be denied or delayed. Some distributions may require attachments providing additional information. For example, a disability payment may need a physician's statement, a death benefit may a death certificate, or if self-certification is not allowed for hardships, documentation of the financial need may be needed. The tax circumstances can be different, and the tax rates and excise taxes can vary by the kind of distribution. Any tax election accompanying the distribution election would need to be coordinated with the selected kind of distribution. The plan will need to decide how far it will go to inform the participant of the consequences of the participant's choices. Personal tax circumstances will vary from one person to the next. Personal financial circumstances also will vary. An individual who has reasonably stable finances may be more inclined to use a kind of payment that allows for repayment or restoration of the distribution to the plan. If the plan attempts suggest to the participant how to optimize the consequences of a distribution and the suggestions result in otherwise avoidable taxation or penalties, the plan can expect some participants to seek to be made whole because the plan did not fully inform them.

Is it at least 1/7th of the amount transferred to the replacement plan? Only the balance at the last valuation date on or before 12/31/2022. The exclusion of prior service is not valid due to the termination of the DB plan which creates a predecessor plan. See 1.411(a)-5(b)(3)(v)

I would think any change to the terms of the agreement would constitute entering into a new agreement for these purposes. So I would work with the TPA to remove those gag clause provisions asap. They'll probably be more than willing to given the CAA provisions at play here. My guess is they would even be willing to date the change back to 12/27/20 and certify that they have not enforced such terms since that date. It's not perfect, but it still should be good enough at this point--not really sure what else could be done. Here's the actual attestation language: https://www.cms.gov/files/document/hios-gcpca-usermanual-03_00_00_062823.pdf The following will then display: Group health plans, including non-federal governmental plans, and health insurance issuers offering group health insurance coverage. I attest that, in accordance with section 9824(a)(1) of the Internal Revenue Code, section 724(a)(1) of the Employee Retirement Income Security Act, and section 2799A-9(a)(1) of the Public Health Service Act, the group health plan(s) or health insurance issuer(s) offering group health insurance coverage on whose behalf I am signing will not enter into an agreement, and has not, subsequent to December 27, 2020, entered into an agreement with a health care provider, network or association of providers, third-party administrator, or other service provider offering access to a network of providers that would be directly or indirectly restrict the group health plan(s) or health plan(s) or health insurance issuer(s) from—...

Unless two-year wait, which = full vesting, how was this person not eligible 7/1/2014? With a 4/2013 hire, 1/2015 entry would violate 18-month maximum hold out.

This is the type of situation where you need to read the plan document carefully to sort out three different topics, each of which can have its own rules that may look very similar or very different from each other within the document. The topics are: Eligibility Vesting Benefit accrual (for a PS plan, allocation conditions) It is possible, for example, for a rehired participant in a plan that uses rules of parity for determining eligibility to not be eligible. If the same plan uses elapsed time for vesting service, that participant could be vested. Within the rules of parity, there can be a distinction between pre-break service and post-break service. It is best to see what the plan document says for calculating eligibility service and vesting service. Be on the lookout one of the trickiest provisions where a rehired participant gets retroactive credit for pre-break service only after the participant completes one year of service after returning to service. Another tricky part of applying the rules of parity is that the rules use a Break-in-Service to determine when a participant counting consecutive One-Year-Breaks-in-Service. A participant may, under the plan provisions, have worked more or less than 500 hours (particularly in the year of termination or year of rehire) which can impact the count. Note this count also can be impacted when the participant's Eligibility Computation Period shifts from the first 12 month's of employment to the plan year. What is amazing is these rules been in existence since 1975 and somehow have survived. Good luck!

That's a tough one. You pays your money and you takes your chances. The statutory language in IRC 410(a)(5)(D)(iii) defines a nonvested participant as one who does not have any nonforfeitable right to an "accrued benefit derived from employer contributions." 1.411(a)-7(2) defines an accrued benefit as "the balance of the employee's account held under the plan." It would seem pretty reasonable to argue that you could use the rule of parity here, even if "vested" assuming there is no account balance. I'm not sure there is any guidance directly on point for this question - and of course, document provisions rule...

In an old presentation by IRS on EPCRS (when RP 2008-50 was still in effect) they provided the following example for a failure to include bonuses in deferrals: Correction: Missed deferrals attributable to excluded elements of compensation need to be determined. Generally, the employee’s elected percentage of compensation would be used to determine the amount the employee would have deferred from the excluded elements. The corrective contribution for the missed deferral opportunity would be 50% of the missed deferral (adjusted for earnings). If the plan calls for matching contributions, a corrective contribution must be made equal to the full matching contribution that the employee would have received (adjusted for earnings) had the missed deferral (attributable to the excluded element(s) of compensation) been made to the plan. Do not apply the 50% missed deferral opportunity rate. Any missed discretionary contributions on the omitted compensation (plus earnings) must also be contributed. Ginco, Inc. had 4 employees in 2010. The plan document for the Ginco 401(k) plan provides that bonuses are included in the definition of compensation. Alan and Lourdes were the only employees receiving bonuses in 2010, and each received a $20,000 bonus. They each also elected to defer 5% of compensation. In 2010 Ginco decided to make a discretionary profit sharing contribution equal to 6% of compensation on behalf of each employee. In operation, the contribution was calculated without regard to Alan and Lourdes’ bonuses. The total compensation for all 4 employees excluding bonuses was $200,000, with each employee earning $50,000. Thus, each employee received a $3,000 profit sharing contribution. The missed deferral for Alan and Lourdes is $1,000 each (5%x$20,000). Ginco must contribute 50% of this amount ($500) plus earnings each to Alan and Lourdes’ account. Alan and Lourdes should also each receive a $1,200 (6% x 20,000) contribution for the discretionary profit sharing contribution.