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Pre-nup is not relevant. The Plan must follow its own rules for distribution and who is defined to be the beneficiary. Hint: likely, the plan defines beneficiary as "spouse".

100% correct. Executor - you need to listen to David. it is a very common mistake that people think their pre-nup has any bearing on the 401(k). It doesn't. The spouse has to sign the beneficiary form waiving their benefit if the participant wants any portion to go a non-spouse. The spouse has to sign after the marriage occurs. Some basic searching online for court cases will demonstrate this. The plan administrator doesn't care what the pre-nup says. All they can follow and should follow is the terms of the plan and a valid beneficiary form. If the widow received the 401(k) $$ and some other agreement says they shouldn't, well then the estate or whoever typically would take legal action to try to resolve that, against the widow. It isn't an issue for the plan. Any competent estate lawyer would know about this when drafting the pre-nup and explain it to the parties. And that is why a post-marriage checklist exists for a reason. But no one can force people to sign anything. I suggest you contact an experienced family law attorney if you want to pursue it further.

Agreed, the Catch-Up limit for ages 60-63 is $11,250, so the total is $23,500 + $11,250 = $34,750. Note, the unrounded amounts were just a few $ short of the next "bumps" .... would have been $24,000 + $12,000 if September CPI had come in slightly higher. .... Jeff

The CPI-U for September 2024 was published with a value of 315.301. Based on Tom Poje's spreadsheet, the dollar limits for 2025 are projected to be: Almost all increased (NOT Official yet, of course): Deferral limit: $23,500 (up from $23,000) Catchup: $7,500 (unchanged) Compensation Limit: $350,000 (up from $345,000) Annual Addition Limit: $70,000 (up from $69,000) DB Limit: $280,000 (up from $275,000) HCE: $160,000 (up from $155,000) Key Employee: $230,000 (up from $220,000) Just for reference, the unrounded figures are: Catchup: $7,997.50 Deferral limit: $23,993 Compensation Limit: $354,260 Annual Addition Limit: $70,852 DB Limit: $283,408 HCE: $160,072 Key Employee: $230,269

Wrong on 5500 or 5558? Either way, I think you’re okay as long as the EIN and PN are correct.

IRC 401(k)(2)(B) Also, paragraph 1.401(k)-1(d) of the regulations.

Yes No

And according to SSA.gov, the Social Security taxable wage base will increase to $176,100 in 2025 from $168,600 in 2024.

If they are employees, they count.

As backstop to proposed sale/merger, has client considered trying to "absorb" excess through Plan purchase of life insurance?

I agree.

The TPA I work for has different rates for positions that do the work and bill accordingly. We would most likely not bill for this kind of situation. It is penny wise pound foolish. As HarleyBabe notes they are upset already. A few hundred in revenue isn't worth making them madder. The cost to market a new client is pretty high. The cost of one lost client is higher than all the revenue you will collect billing for 10 or 15 people. I know very few management groups in the TPA world that would risk that.

Good question, I've already got angry clients like we did something wrong so then charging them, even though it's been so time consuming responding to every letter, and not our fault, is a tough call. I'm hoping the IRS comes out with some blanket statement because I KNOW the Efiled returns will prompt another auto generated letter now saying they are late because of the extension denial. Just want this to all go away so I can not dread checking my email everyday for more denial letters.

My guess is if you get a letter you can explain it in a letter. I know I have explained the wrong EIN once years ago that way and the IRS was fine.