Leaderboard

Like Andy H., I am retiring tomorrow, January 31. These message boards have been a great source of knowledge and information, and I thank the folks who make this possible! Best wishes and good luck to everyone!

Just give the participant an extra profit-sharing allocation . Who cares what it's called?

I would suggest finding a TPA or service provider that has a document service only (no recordkeeping or administration or reporting) tier. I think ones that cater to the smaller market are more likely to offer this. Will the new recordkeeper also be doing all the annual work? The form 5500? compliance testing? If not, a traditional TPA that does that work in addition to the document is needed. Sounds like they went from a bundled service provider - to an unbundled. If the new recordkeeper really is doing everything except the document, my document services only suggestion is the best I can think of. Then they would not need to hire an attorney, at least not if they can be accommodated on a volume submitter document at a more affordable cost.

So the PS is less than the TH minimum for others? I'm curious about the percentages; something doesn't sound right unless we are talking very low % contributions. Maybe it's a formula, remember them?

There is no doubt that the Participant is entitled to name a beneficiary or beneficiaries to all of his assets including those within a defined contribution plan (that I assume this is but you didn't say). The Participant's account does not revert to the Plan so it has to go somewhere. This places to name a beneficiary includes the execution of a Last Will and Testament with respect to houses, cars, furniture, investments, boats, yachts and airplanes and most other stuff with respect to which do not pass by operation of law, like life insurance or T/E real property or a beneficiary designation. If the deceased dies intestate (without a Will) and fails to name a beneficiary, or if the beneficiary previously designated predeceases the Participant, or if the deceased failed to name a beneficiary with respect to ALL of his 401(k) plan account, there are two places to look. (i) The Plan document may itself provide that in the absence of a beneficiary designation the asset with pass to specified categories of people. For example, under Federal TSP the order of preference is: 1. To your widow or widower. 2. If none, to your child or children equally, and descendants of deceased children by representation. 3. If none, to your parents equally or to the surviving parent. 4. If none, to the appointed executor or administrator of your estate. 5 If none, to your next of kin who is entitled to your estate under the laws of the state in which you resided at the time of your death. (ii) If the Plan does not have such a provision the assets wind up in probate court and pass according to the decedent's Will if he dies testate, or, if he died intestate then in the order of preference set forth in state law. I don't think you can suggest that the now mortis est Participant really meant to leave 100% to the beneficiary in this case. It would be more logical to conclude that Participant intended to leave the 2nd 50% to the fist person on this blog to use the Latin phrase mortis est.* David *Dead is.

The question is whether the plan satisfies coverage and nondiscrimination by permissive aggregation. If there was no aggregation, the answer is no. From the instructions:

Since you say there there are no exceptions to spousal attribution and it applies , conceptually, pretend that H/W are one person, ignore attribution, and do the test again. Let's call the new person Plato Company A Plato owns 80% Unrelated Person1 owns 10% Unrelated Person2 owns 10% Company B Plato owns 40% Unrelated Person1 owns 20% Unrelated Person2 owns 20% Unrelated Person3 owns 20% Based on that, I think you have 60% identical ownership, and 80% common ownership. Though someone can correct me if my math is off.

Fillable PDF for 2023 Form 5500-EZ was just posted on the IRS website this morning, along with the relevant instructions.

Andy - Yes, without having the pressures of a work schedule, I now attend morning Mass. And taught myself how to play the psaltery, so they even get a little extra music for the morning. Wonderful instrument, wish I had discovered it earlier. I seem to recall one of the questions I worked into the Nondiscrimination answer book went something like "Andy's Heart Nut Company..." May God grant you many years of wonderful retirement.

this is the classic example of what IS allowed for a mid-year change to safe harbor. so much so that the IRS has included it as an example of something that is allowed as a change to SH Match if certain parameters are met, namely: change is adopted at least 3 months before the end of the plan year, change is made retroactive for the entire plan year, and the plan sponsor gives an updated safe harbor notice and election opportunities at least 3 months prior to the end of the plan year. https://www.irs.gov/retirement-plans/mid-year-changes-to-safe-harbor-401k-plans-and-notices https://www.irs.gov/pub/irs-drop/n-16-16.pdf

I somewhat agree. I think for 2024 they would still have the quarterly deposit requirement on the match for 2024, but that this amendment would not be a cutting anyone's benefit as it's making sure everyone gets the annual safe harbor match so I think the amendment is allowable if they follow the deposit timing requirements of the per payroll match rules.

There is a special catch-up available in 403(b) plans that is designed to allow participants to make up for some years in which they didn't maximize their contributions. I don't deal with 403(b) plans enough to feel comfortable explaining it here, but you can research it if you're interested. There is nothing along those lines for 401(k) plans however.