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The plan must provide that LTPT employees have the opportunity to make elective deferrals. Anything beyond this is optional. The number of employees is not a consideration. The plan is not required to give LTPT employees the safe harbor match or non-elective contribution.

unless the person was entered into the plan immediately upon hire - no, the 30 days advance notice is the grace period. The default deferrals should typically start on the first pay date on or after 1/1/2025. Pay attention to the pay period end date as well. Many plan documents differentiate between pay date (W-2 cash basis) and accrual (when the hours are worked). If there is a pay date on 1/5/2025 and deferrals should apply to it - do it. Even if the hours for that pay date were worked in 2024.

Nice! (1) Is the organization eligible to have a non-ERISA Plan (government; church)? Plan 2 can't be a 457(b) plan -- your description says it is funded. (2) Nonprofits often have strange ideas and use strange terminology. Is it possible that Plan 2 is not a separate plan, but just a separate set of accounts to hold the "excess" deferrals but labeled and talked about as a separate plan?

As Paul says, optional, not required. But track your elections so you can incorporate them into the plan document. Or if you've already executed your SECURE Amendment, make sure it does what you want it to do.

yes, while we are at it lemme suggest to modify BIS rules to be different hours for different sources. since we are going to calcuate every employee every year by hand anyway....

I’m sure it will be super easy to have the plan document and the admin system be set up for 2YOS anniversary years for the PS and the “switch to plan year” method for everything else.

It depends. Will any of the income be paid as earned income reported on a Schedule C and subject to SE taxes or will he maintain a corporation that will pay him a W-2 salary out of the incoming payments? Or will it all be recovery of basis and long term capital gains in the business? Probably need to talk to his accountant. if he's not going to have any Earned income or W-2 wages, then the answer is probably a hard no. If it's being paid as a "consulting fee" that he'll get a 1099-MISC and run it through a Schedule C or his corporation, it's probably yes.

if it walks like a duck, quacks like a duck, smells like a duck, its probably a duck. That being said - there aren't enough details to know. The real question isn't "Are proceeds from the sale passive income?" It's "Will he(as an individual) have earned income at a sufficient level to make it worth starting a 401(k) plan?" The money he receives for the business sale - where is it being paid? to an LLC? to him personally? Etc? If it is actually going to an LLC or entity - what is going to be his personal earned income from that entity? Zero? For example - if he has a LLC with an S-Corp election, but no W-2, then he has no earned income. If he only receives a K-1 Form 1120S, then no earned income. If its a 1065 K-1, is there earned income reported on it? His CPA will need to tell you if he actually has earned income.

If you HAVE to aggregate to satisfy coverage then you must aggregate for nondiscrimination and then there are no safe harbors. If each plan has an otherwise safe harbor formula, if the DB can pass coverage by itself using average benefits, then you're OK.

Are you asking about deferrals? or regular employer contributions such as match, safe harbor, profit sharing etc? I would think deferrals count, but not the ER contribs based on this - but someone else can read and confirm. https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter151A/Section1 (s)(A) ''Wages'', every form of remuneration of an employee subject to this chapter for employment by an employer, whether paid directly or indirectly, including salaries, commissions and bonuses, and reasonable cash value of board, rent, housing, lodging, payment in kind and all remuneration paid in any medium other than cash; provided, however, that such term shall not include: (1) The amount of any payment, including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment, made to, or on behalf of, an employee or any of the employee's dependents under a plan or system established by an employer which makes provision for the employees generally and their dependents or for a class or classes of the employees and their dependents, on account of (i) sickness or accident disability but, in the case of payment made to an employee or any of the employee's dependents, this paragraph shall exclude from the term ''wages'' only payments which are received under a worker's compensation law; or (ii) medical or hospitalization expenses in connection with sickness or accident disability; or (iii) death. (2) Any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, made by an employer to, or on behalf of, an employee after the expiration of six calendar months following the last calendar month in which the employee worked for such employer. (3) Any payment made to, or on behalf of, an employee or the employee's beneficiary (i) from or to a trust described in section 401 (a) of Federal Internal Revenue Code and exempt from tax under section 501 (a) of the Code at the time of such payment unless such payment is made to an employee of the trust as remuneration for services rendered as such employee and not as a beneficiary of the trust; or (ii) under or to an annuity plan which, at the time of such payment, is a plan described in section 403 (a) of the Federal Internal Revenue Code; or, (iii) under a simplified employee pension plan if, at the time of the payment, it is reasonable to believe that the employee will be entitled to a deduction under section 219 (b) (2) of the Federal Internal Revenue Code for such payment; or (iv) under or to an annuity contract described in section 403 (b) of the Federal Internal Revenue Code other than payment for the purchase of such contract which is made by reason of a salary reduction agreement whether evidenced by a written instrument or otherwise; or (v) under or to an exempt governmental deferred compensation plan as defined in section 3121 (v) (3) of the Federal Internal Revenue Code; or (vi) to supplement pension benefits under a plan or trust described in any of the foregoing provisions of this paragraph to take into account some portion or all of the increase in the cost of living as determined by the United States Secretary of Labor since retirement but only if such supplemental payments are under a plan which is treated as a welfare plan under section 3 (2) (B) (ii) of the Employee Retirement Income Security Act of 1974.

I am not familiar with Massachusetts taxes, but see if this site may be helpful https://www.mass.gov/info-details/wage-contributions-reporting-for-paid-family-and-medical-leave