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This is a pet peeve of mine, you can't "fail" the top heavy determination (aka top heavy test). You are just top heavy or not top heavy. In this case you're top heavy. Not a failure. The actual rule is that in a top heavy DC plan, each participant who is a non-key employee must receive an employer allocation equal to at least 3% of their compensation, or a percentage equal to the highest percentage allocated to any key employee if it is less than 3%. This allocation may impose a last day rule, meaning employees who are terminated before the end of the plan year do not need to receive the top heavy minimum. The rule was modified by SECURE 2.0 so that employees with less than 1 year of service or who have not attained age 21 do not need to receive the top heavy minimum contribution. This is effective starting for 2024 plan years. Since your plan is profit sharing only with a pro rata allocation, you shouldn't normally have any issues with the top heavy minimum, as each non-key employee would receive the same percentage of employer contributions as each key employee. However a couple of things to watch out for: If the plan excludes any compensation for allocation purposes (for example, pre-entry compensation), that definition of compensation may not be used for the top heavy minimum allocation, even if it is a 414(s) safe harbor definition. The plan must use full year (415) compensation. If the profit sharing allocation has a service condition, for example, the employee must complete 1000 hours of service in the current year to be eligible for a contribution, then an additional top heavy minimum might be needed for participants who were active on the last day but did not complete the 1000 hours. Employees who are not participants (have not met the plan's eligibility requirements) do not need to receive a contribution.

Old but useful thread on 2% Scorp medical premiums. Tl;dr - Its comp for plan purposes unless the plan doc excludes fringe benefits.

We are no longer a service provider to the plan and unable to assist you with the information you are requesting as we have no access to that data and no contractual agreement with that Plan or Sponsor. Please contact the ERISA Plan Administrator and/or Plan Trustee. Our last records which we have previously provided to you indicate they are X and Y. The last known address and phone in our records is _______ and _________. We wish you luck in enforcing the right of the participants with the legally responsible parties but are unable to offer any further assistance. Just repeat that ever time they call.

IRS Reg specifically states that a pre-nup does not affect the selection of beneficiary. I think it is: Reg. 1.401(a)-20, Q&A28. Very likely, the plan already answers the original question.

Since this has already been the subject of the pre-nup, hasn't the subject been broached already? Perhaps he might want to wait to bring it up again until after Valentine's Day... 😁

Yes, and it may not have to wait a year depending on the terms of the plan.

Everyone. I think we are all agreed that for this 2024 error the 25% "safe harbor" in Appendix A applies, subject to the 45 day Notice. It's a weird result and Paul I identified the problem precisely. EPCRS authors mistakenly did not distinguish Roth Elective Deferrals from Elective Deferrals generally. If they had thought about it more, I think they would have required the QNEC to go to a Roth source. That can be remedied for those plans that allow in-plan Roth rollovers. No harm. On to the next issue. Great getting to know you all (virtually.)

The only answer to you question is.... What does the plan document say? The plan document defines compensation for allocation purposes. Now, about Box 5... Box 5 is not the answer. Yes, it's grossed up for 401(k) deferrals but it excludes section 125 deferrals. It also excludes S-corp shareholder medical premiums. Both of which are 415 compensation. A lot of ink has been spilled on the definition of compensation elsewhere so I won't go on at length here. But you can't rely on just the W-2 for compensation data.

Roth Deferrals are Elective Deferrals. The IRS now calls them Roth Elective Deferrals. The issue with the correction rules is they specify that the corrective contribution is a QNEC, which is a pre-tax employer contribution, but there is no Roth QNEC. The challenge is how to try to get the QNEC into a Roth source which is what the participant originally wished to do. The IRS possibly could have come up with some Roth QNEC rules, but I suspect their focus was elsewhere and Roth transfers seem to be a reasonable solution. I don't expect any clarification on this anytime soon given everyone in the IRS is probably wondering if they will still be employed at the end of this year (or if they are shut down come the March 14th deadline to fund the government).

Yes, I agree. I think that's perfectly fine and a normal approach. Plus, as you noted, it's definitely way better to have a calendar plan year dependent care FSA going forward to avoid multiple issues. Normally I would recommend a prorated limit on a short plan year to avoid complications, but if it's a brand new plan I agree that's a non-issue. More details: https://www.newfront.com/blog/dependent-care-fsa-limit-challenges

The excess to the rollover contribution has to be corrected with earnings or else it's only partially corrected. Plan's okay, but the IRA wouldn't be.

If a § 403(b) plan has contributions beyond voluntary wage-reduction contributions (and rollover contributions), there are three categories: governmental, church, and neither. That a charitable organization, if not itself a government agency or instrumentality, gets government grants does not by itself make the organization’s § 403(b) plan a governmental plan. This is not advice to anyone.

Here’s EBSA’s webpage with many “No Surprises Act” resources: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/no-surprises-act. If in the webpage you search the word “model”, you’ll see two hyperlinks—one to a model notice, and the next one to some agency guidance about a notice. After you delete instructions about how to use the model, the text is about one page. This is not advice to anyone.