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ASC has taken the same position. Absent guidance permitting us to treat 60-63CU separate from regular CU, if the document allows for CU, the 60-63CU limits are automatically applied.

I am just going to put out there that this is one of the silliest parts of secure 2.0. That and making the mandatory Roth catch-up highly paid individuals not the same as the HCE number. It makes so little sense, and creates needless complication.

You forgot the part about the mandatory Roth catch-ups determination being based on Social Security Wages. An oversight I'm sure!

Well they could tell us. I am waiting for Relius to respond to me on this question. I did suggest that now would certainly be a good time for them to tell us what they think. But then I'm sure the answer is "we're waiting for the IRS to tell us what they think." Kinda hard to argue with that.

For when tax law’s catch-up maximum was the same for all those 50 and older, it doesn’t surprise me that designers of IRS-preapproved documents made an adoption-agreement form simpler and shorter by omitting a line to specify a limit less than tax law’s maximum. But about whether to afford a choice to omit the 60-63 catch-up range while providing a 50-and-older catch-up, we won’t know a plan-document publisher’s business decision until we see the next cycle’s forms.

@C. B. Zeller & @Peter Gulia, I am not advocating for or against a plan being allowed to specify a catch-up limit. I will observe that I took a look at a half-dozen pre-approved plan adoption agreements and the language in their underlying basic plan documents, and interestingly none of them give the plan sponsor the option to choose a catch-up limit (i.e., there is no blank that says fill in the catch-up deferral -limit).

Right about now would be a great time for the IRS to weigh in 🤪

I'm not sure if I agree. The definition of the universal availability rule in 1.414(v)-1(e) only requires that all catch-up eligible participants have the opportunity to make the same dollar amount of catch-up contributions. It does not require that a plan permit participants to make the maximum amount of catch-up contributions permitted under the law. So a plan could say that catch-ups are allowed, but we are limiting catch-ups to $1000. And if they could do that, it seems like they should be able to limit catch-ups to the regular (50-59,64+) catch up limit as well.

Reading Section 109 of SECURE 2.0, the change adding the availability of the increased catch-up limit for participants aged 60-63 does not appear to be optional. This increase is part of the definition of the overall catch-up limit. If so, then the only option a plan has is to permit catch-ups or not to permit catch-ups. If the plan chooses to permit catch-ups in 2025 and going forward, then the plan must permit the increased limit for participants aged 60-63. (I recently have seen a statistic that something like 98% of 401(k) plans allow for catch-up contributions.) While we are on the topic of catch-ups, there are some other related points to keep in mind: Section 109 notes the "adjusted dollar 19 amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year" so beginning January 1, 2025, a participant who on January 1, 2015 is at least age 59 (i.e., would attain age 60 before the close of the tax year) and under age 63 (i.e., would attain age 64 before the close of the tax year) will be able to make catch-ups up to the increased limit. Catch-up contributions are subject to an universal availability requirement applicable to all plans sponsored by the employer and any related employers. If the plan includes Long-Term Part-Time Employees (LTPTEs) from 401(a)(4), ADP, ACP and 410(b) testing, then if the plan allows catch-ups, the plan has to allow the LTPTEs to make catch-ups. If the plan excludes LTPTEs from all of these tests, the plan could exclude LTPTEs from making catch-up contribution. Payroll service providers are on the critical path to implement the new limits. Cycle 4 restatements likely will start in late 2026 with the cylce ending in 2028. IRS Notice 2024-3 includes the 2023 Cumulative List of Changes in Plan Qualification Requirements for Defined Contribution Qualified Pre-approved Plans which includes the age 60-63 catch-up limit. @Gina Alsdorf's observation about the coming mandatory Roth catch-ups for High Paid participants is fair warning to all other service providers who will be significantly impacted by that change. At least this change does not appear in the 2023 LRMs. All of the above may be particularly valuable for those practitioners who are contemplating retirement. 😀

You are correct, and you aren't overthinking it IMHO. But it has always been this way, just utilizing younger RMD ages prior to these new age changes. The "two in one year" issue is one that many people have avoided (and can avoid) by not postponing the first RMD.

Bruce1: I appreciate the cautionary notes. The two-year holding period is not an issue. We are responsible for the 401(k) plan and have no connection with the SIMPLE. That said, in telling the spouse she cannot roll the inherited SIMPLE into the 401(k), we will strongly recommend that she confirm with her financial advisor what the best move would be with respect to the SIMPLE. Thanks.

Think about what each Form 990 or Form 5500 will show. Think about what an independent qualified public accountant, if any, might find. KEC79, if you’re a service provider anywhere near this VEBA’s situation, lawyer-up to Cover Your Assets. There might be ways for an employer’s blunder to become a service provider’s liability exposure. A service provider might evaluate whether doing something now could help improve opportunities for avoiding or dismissing a claim. This is not advice to anyone.

I share Gina's concern on this situation for the same reasons. You can correct the situation for the amounts that were not contributed in the past by filing under the Voluntary Fiduciary Correction Program and contributing the amount owed plus interest using the DOL's calculator. As far as the IRS is concerned, I am not aware that they have any program in place to address voluntary correction of tax exemption issues. Because of this, you should retain highly competent ERISA counsel to assist you in rectifying this problem. The DOL program would likely resolve any prohibited transactions and other fiduciary issues. The danger is, that you do not want the IRS to know about this and hit your client with a 100% excise tax on a reversion. Perhaps there is a closing agreement you could pursue to address any IRS issues. Regarding the overfunded status of the VEBA, you could, prospectively, collect lower premium amounts from employees or amend the VEBA going forward to add additional benefits to help soak up some of that excess amount. I hope these suggestions prove helpful to you.

If the SIMPLE is 2 years old I believe she could elect to roll it to her 401(k) Plan account (assuming she is a participant and entitled to roll in to the Plan) but I don't think she can elect to roll it to his 401(k) account if that is what you are asking.

With the giant caveat that I am neither an attorney nor an IRA expert (I'm a TPA)...you need to check under Florida law. Most (all?) states have some form of "Simultaneous Death" statute, where if both spouses die within a certain amount of time, the spousal beneficiary is treated as not surviving, so it passes to the contingent beneficiaries if named, and to the estate if no named contingent beneficiaries. Other people on this board are certainly far more expert in these matters, and will probably give you much better answers!

You were taught wrong. The due date of the contribution is the due date of the employer's tax return, including extensions. See IRC 404(a)(6).

Thanks, I found out the issue was that the "hurricane" link I had didn't mention the 5500, but the "tropical Storm" link did...