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A plan can allow distributions of deferrals and safe harbor match upon reaching age 59-1/2 without violating any IRS rules. As to whether this particular participant can withdraw her account... ☝️

And this is why we don't have the 3% SH go to HCEs...flexibility before they even think they need it.

To be a safe harbor 401(k) plan, you only have to make safe harbor contributions to NHCEs. However you have to follow the document. If the document says that HCEs will get the safe harbor contribution, then they have to get it. They can't retroactively eliminate it even for HCEs since that would be a prohibited cutback.

Grrrr, either go with a pay period calculation or don't, but stop trying to be cute? 😜

I don't have that much information, but they are contemplating whether it will be more effective in the form of a limited partnership that the partner has a partial ownership in. If that was the case, this question wouldn't have been asked :).

That would be a per payroll match, no?

Most but not all plans will allow for in-service distribution at NRA and in many cases earlier (such as 59 1/2). But not all plans do, so as ratherbereading says - RTD

If it is a plan required to have an ERISA bond, I would see if they have priced that coverage. It depends on how the real estate investment is structured, but it can be expensive. I once had a small plan sell their real estate when they realized they were paying several thousand a year for their bond to cover it properly. I would also see if there is a benefits, rights, and features issue. Will other participants, particularly NHCE, have the ability to invest their plan assets in this (or a comparable) investment? Have they been informed so in writing, including who to contact at the plan to do so? Will the partner also be investing non-plan assets in this development? Such as personal money? Is there a conflict or prohibited transaction there to consider? If using it for rental income, is there UBTI to consider and report?

Yes, look at the document!

Have the investment house return it to the client and they refund it back to the participant. Not as wages.

Try IRS Notice 2024-2. IRS provided guidance for employer ROTH contributions and the reporting of such among other things in that Notice.

The defaults from your preapproved document provide might only increase the limit to $7,000 if the limit was previously $5,000. You could still go straight from $1,000 to $7,000 but the amendment might need the sponsor's signature. Distributions less than the force out limit are not 411(d)(6)-protected, so there is no anti-cutback issue. It does to me too - but it is actually straight out of the preamble to the proposed LTPT regulations. Here is what the IRS said: https://www.federalregister.gov/d/2023-25987/p-37

Not surprisingly (because I think FTWillilam is so awesome) they can do them all year long. The fees are very modest. I'm actually a little embarrassed I misinterpreted all of their caveats about processing deadlines at the end of January. In hindsight those deadlines obviously only related to hitting the 1/31 deadline. Thanks everyone!!

You will need a lot more information about the old company, the new company, the plan sponsored by the old company, the disposition of that plan after the dissolution of the old company, the disposition of that plan after the formation of the new company, a plan sponsored by the new company, the employees of the old company that become employees of the new company, and more. This is a complex situation the needs a careful review by legal counsel with expertise in plans involved in business transitions. There are rules and guidance spread throughout various IRC sections related to business transactions that can be complex and can have a bearing on the analysis. For example 1.415(f)-1(c)(2) points to a determination of a predecessor employer at an employee-by-employee level: "Where plan is not maintained by successor. With respect to an employer of a participant, a former entity that antedates the employer is a predecessor employer with respect to the participant if, under the facts and circumstances, the employer constitutes a continuation of all or a portion of the trade or business of the former entity. This will occur, for example, where formation of the employer constitutes a mere formal or technical change in the employment relationship and continuity otherwise exists in the substance and administration of the business operations of the former entity and the employer." This example is not definitive but does illustrate the type of issues that, depending on the facts and circumstances of reforming the business, could impact a plan. A change in an EIN of a plan sponsor happens routinely in business transactions and also is not definitive. Ultimately, risk of mishandling a plan or plans could rise to the level of disqualification of the old plan or a new plan, the cost of which would make seeking competent legal counsel a bargain.

Attribution of ownership for purposes of determining who is an HCE, key employee, or required to take an RMD without regard to whether they have separated from employment, is determined under IRC 318. 318(a)(2)(B)(i) reads: Qualified plan trusts are specifically exempt from this attribution. The participant in your example is not considered a 5% owner for the purposes mentioned above.

Almost a half-century after ERISA and almost 40 years after the Retirement Equity Act of 1984 (which requires a spouse’s consent), we might be disappointed by too many who think too little about the law that governs employee-benefit plans.

I am curious about who the attorney represents and what the pushback is, but don’t bother with extra work just to satisfy my curiosity. If the attorney represents participant, too bad. I assume that you do not represent any individual, so you have no obligation to convince or educate the attorney one way or another. Even if you work for the plan, I don’t think you have any obligation to argue for the correct answer. As a courtesy, you could say that the plan follows its terms, including any beneficiary designations or waivers done in accordance with plan procedures, and will give effect to qualified domestic relations orders. You might go so far as to say that a marital settlement agreement is not something contemplated by the plan or mentioned in the plan’s policies and procedures.