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I came across this article from Verrill about implementing Roth Catch Ups when a plan has a provision to spillover deferrals to a NQDC once the 401(k) limits are reached. The article in particular highlights a potential conflict between giving the participant an effective opportunity to elect out of a deemed Roth election and a requirement to make deferral elections before the start of the year for the NQDC. https://www.verrill-law.com/blog/consider-nonqualified-plans-when-implementing-new-roth-catch-up-contribution-rules/ The article makes suggestions on steps to take now to be sure the operation and administration of plans with the spillover/link to a NQDC is reviewed before 2026 starts, and that everyone involved with the plan - plan administrator, plan sponsor, service providers, participants - are all informed. This wasn't on my radar screen when discussing implementing Roth Catch Ups, so I am sharing it in case others also have plans that use these features.

If asked, we recommend 15 years with 20 years being okay but not preferred. We point out that: The maximum plan loan is $50,000 and the mortgage amount typically is considerably higher. The plan loan often helps spread paying off realtor fees, closing costs and moving expenses. A $50,000 loan will have monthly repayment of about $400 for 15 years or $330 for 20 years. Most loans for purchase of a primary residence are considerably lower since the individuals taking the loan commonly do not have a vested balance that exceeds $100,000. For a $10,000 loan, the monthly repayments are about $80 for 15 years or $66 for 20 years. These are small amounts (and even smaller when the payroll period is semimonthly or biweekly). Processing loan repayments for small amounts can become an annoyance for payroll. The longer the loan amortization, the more the participant and/or employer likely will pay in loan administration fees. The longer the loan is outstanding, the more likely the participant will terminate with an outstanding loan balance which always seems to add time to process the distribution.

If it’s an asset sale, the plan can continue as long as the employer wants it to continue.

The proposed regulations say that you count employees using the rules of 54.4980B-2 Q&A-5. Which says... If the half-time employees come out as 50% under this rule, then I would agree with your calculation and the plan would be exempt from automatic enrollment.

The rule is that a participant has to receive at least some profit sharing in order for their comp to count towards the 25% limit. I don't know what source you are citing, but I imagine the author just meant that the definition of compensation used to apply the 25% limit includes deferrals, which is true. You can't just reclassify deferrals as catch-up because you want to, you have to exceed a limit. That's why I suggested giving some profit sharing in order to a) intentionally exceed the 415 limit, causing some deferrals to be reclassified, and b) make her compensation eligible to be included in the 25% limit. If she's under 50, and hasn't deferred the entire $23,000 yet, then she could also reduce her deferrals to make room for some profit sharing.

No. Elective deferrals are disregarded for purposes of the 25% limit - see IRC 404(n). Therefore a participant whose only contributions are elective deferrals is not considered to be benefiting for purposes of 404(a)(3). Therefore their compensation is not included in applying the limit. In other words, in order to count her comp towards the deductible limit, she would have to receive some profit sharing. Is the wife over age 50? If so, give her up to $7,500 (or more, if she's 60-63) in profit sharing. Her deferrals will be reclassified as catch-up, due to exceeding the 100% of comp 415 limit, and she will have some profit sharing so her comp will count towards the deductible limit.

Use the form for the year in which the plan year begins.

The plan administrator and its service providers will make separate payments of the Roth and non-Roth accounts. In addition to the fact that IRA providers will not take on the responsibility of splitting a distribution into Roth and non-Roth accounts, the plan has to report the distribution to the participant on a 1099R, and there is not enough room on one 1099R for all of distribution codes needed to report the distribution correctly if it was made in a single payment. In short, no IRA provider would accept a check with co-mingled amounts, and the plan would have no way to properly report the distribution to the participant.

Peter I've never seen an IRA where they've had both pre-tax and Roth dollars in them. Even when doing rollovers it always comes in two checks.. Hope that helps.