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Notice 2025-67 just released, with the official retirement plan limits for 2026.

Thank you for the pop-culture reference to Better Off Dead.

Personally, I am of the opinion that those records should be kept electronically and in perpetuity, if not by the TPA/RK/Trustee/Custodian then certainly by the plan sponsor with the assistance from one of the aforementioned entities. Doesn't need to be extensive, just needs to sufficiently prove someone has been paid out. Why? SSA sends me a letter saying my employer's plan from 35 years ago MAY owe me a benefit. Not remembering they paid me back then and instead of rolling it over I went to the casino and lost it, I have no record, so I make a claim on that plan. I don't accept their answer of we don't have you in our records any more so you must have been paid out, so I go screaming "I want my two dollars!" (bonus points for the movie reference) and threaten to talk to my lawyer, the DOL, the IRS because I've seen everything worthwhile on Netflix and have nothing better to do now. This sends the Plan Administrator scrambling, calling around to past and present service advisors, muttering "I don't have time for this" and "I'm getting too old for this sh1t" (yes, another movie reference) before caving like a Democratic senator and concluding it's easier to pay me my $2. The moral here is (1) someone should retain these records in perpetuity, logically the plan sponsor, and (2) responsible party(ies) need to be diligent in reporting deletions on Form 8955-SSA. Then the too often occurring scenario from above gets avoided.

Since you said they are still working (and presumably now getting W-2 wages) and are not a 5% owner in their 1st RMD year, then they are not required to take a 2025 RMD unless they separate service before 12/31/2025. if I misunderstand the facts, that could change things.

I'm looking at the last "hey you owe a Form 10" correspondence the PBGC sent a client a year ago, and the text you provide here is similar but not identical. In fact, the PBGC did not use the passive voice that the reportable event "has happened." They directly said the PBGC found the unpaid MRC on the 5500 and immediately provided the website for more information on the filing requirements at www.pbgc.gov.

https://pbinfo.com/locate-missing-participants/ This is one that we use.

Is "A" actually your client? Do they have a missed MRC? Looks like a scam to me. Did it come from a specific person? Any correspondence I have received from PBGC has been well written and comes from a specific person w/ numerous others cc'd.

Was thinking about that but didn't dig into - you may have something there.

Yes, for catch-up eligible participants with FICA wages in excess of $150,000

IMHO, this is two (related) questions. Yes, best practice is to gather as much data as possible, using whatever source(s) are reliable. In addition, this is a great opportunity to assist participants with reviewing/updating any beneficiary information, while reminding them (1) not updating might mean a distribution could go to someone not intended (eg, ex-spouse), and (2) it is the participant's responsibility to provide future updates.

IRS has confirmed it is staying at $11,250...

The answer is tied into the definition of "principal residence" (likely what you meant by "primary residence") which in turn is tied into other rules related to tax deductions allowed for interest on home mortgages and their associated tracing rules. See IRS Regulations 1.72(p)-1 Q&A-5, 6 and 7. "Q-5: What is a principal residence for purposes of the exception in section 72(p)(2)(B)(ii) from the requirement that a loan be repaid in five years? A-5: Section 72(p)(2)(B)(ii) provides that the requirement in section 72(p)(2)(B)(i) that a plan loan be repaid within five years does not apply to a loan used to acquire a dwelling unit which will within a reasonable time be used as the principal residence of the participant (a principal residence plan loan). For this purpose, a principal residence has the same meaning as a principal residence under section 121. Q-6: In order to satisfy the requirements for a principal residence plan loan, is a loan required to be secured by the dwelling unit that will within a reasonable time be used as the principal residence of the participant? A-6: A loan is not required to be secured by the dwelling unit that will within a reasonable time be used as the participant's principal residence in order to satisfy the requirements for a principal residence plan loan. Q-7: What tracing rules apply in determining whether a loan qualifies as a principal residence plan loan? A-7: The tracing rules established under section 163(h)(3)(B) apply in determining whether a loan is treated as for the acquisition of a principal residence in order to qualify as a principal residence plan loan." The tracing rules deal with identifying when the acquisition indebtedness was secured by the qualified residence. Also see IRS Notice 88-74 that defines acquisition indebtedness that provides an alternative of 90 days from the date of the loan as an alternative to the section 163(h)(3)(B) tracing rules in Q&A-7. Frankly, I have never seen any plan loan provisions or plan loan policy provisions or related promissory notes that specify a time period by which time the participant must begin residing at the property. Conceivably, provisions could be added to the plan or policy. Further, participants could be asked at the time of the loan is requested to certify that the property will by occupied within the prescribed time frame. If there is a lingering concern that somehow the extended time available to repay a loan for a principal residence, then consider something like it the property is not used as a principal residence within 5 years, the loan will be declared not to be a for a principal residence and will become immediately due upon reaching the end of year 5 of the loan term. Keep in mind that if the plan imposes restrictions, then the plan must make them applicable to all similarly situated participants and must administer the restrictions.

If the plan (including loan policy or procedure made under the plan) imposes no restriction or condition beyond those needed to meet tax law: Internal Revenue Code § 72(p)(2)(B)(ii): “Clause (i) [limiting a loan’s term to five years] shall not apply to any loan used to acquire any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the participant.” Many plans’ administrators’ process claims for a participant loan accepting the claimant’s statements, made under penalties of perjury, on a paper or electronic claim form. A claim form often had been designed to paraphrase text from the statute, regulations, or both. This is not advice to anyone.

I agree with Cuse. We tell them to keep everything forever, and if they want to do otherwise, (with or without their lawyer's advice) it is up to them.

1.401(m)-2(d)(4) appears to be the linchpin on this. IT's the one that say the ratio of an HCE's match to their deferrals cannot be greater than that of any NHCE. Not sure what you all think but I don;t see anything that explicitly says that requirement cannot be performed on a consolidated basis between both matches. One requirement is that you have to satisfy one of the SH contributions--this plan does. A fixed match cannot be based on deferrals in excess of 6% of pay. This plan presumably will not do that. The last relevant requirement is that the match rate for HCE's can't be greater than NHCE's. When combined, the NHCE's will be greater (because the HCE's will be excluded from the SH Match). The reg does not say "excluding the Safe Harbor Match." I would never do this without submitting an ask the Author question of ERISApedia, but I am definitely curious if you all see something in the reg that would cause a problem. (4) Limitation on rate of match. A plan meets the requirements of this section only if the ratio of matching contributions on behalf of an HCE to that HCE's elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) for that plan year is no greater than the ratio of matching contributions to elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) that would apply with respect to any NHCE for whom the elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) are the same percentage of safe harbor compensation.

And Lethal Weapon.

I am not sure we have enough facts to answer your question. Is this person still working at the law firm in 2025--presumably so or there doesn't seem to be an issue. Are you asking whether the switch from partner status in one year to non-partner status the following year affects or doesn't affect the start of their RMDs? I mean for retirement plan purposes, a self-employed individual (i.e., a person who has earned income for a tax year) is treated as an employee. See 401(c)(1). Also, no 5% issue. If they are still working at the law firm in 2025 with no ownership then I take that to mean they are providing services as a non-partner (a person could be a non-equity partner, i.e., no ownership, and still be a treated as a self-employed partner if they receive a share of the firm's income). A question then is whether they are providing services as an employee or as an independent contractor. Another is whether the plan has a definition of "retires" with regard to partners. Assuming they haven't retired for purposes of this query, if they are providing services to the law firm as an employee, seems like they would not be required to take a distribution simply because they have not retired (also assumes that the plan uses both the "age 73" and the "later of" rule). Otherwise, if they are providing services as an independent contractor (or not providing services at all) then it seems they would be required to take a distribution by 4/1/2026. Sorry if I am being dense or reading more into this than is necessary (overly anal)...

Getting stiffed for providing professional services in good faith almost always ends with a feeling of regret including what you shoulda, woulda, coulda have done differently to have avoided the situation. Your question in particular asks what would be ethical ways to proceed. As an EA, you are subject to the Joint Board for the Enrollment of Actuaries and its Standards of performance of actuarial services which includes guidance on what is considered "records of the client". You also should be aware of the ethical standards of any professional organization to which you belong such as ASEA, SOA, ASPPA, AAA... Generally, while there are differences between each organization's code of ethics, if you delivered work product prior to receiving payment for those services, you cannot withdraw or invalidate a client's reliance on that work product. Generally you do have a right, absent any formal contractual obligation, not to perform future services. You appear to have a direct relationship with the plan sponsors since you have filing authorizations and also because you personally sign the Schedule SB. If ultimately you decide not to perform future services for the client, you should notify them in time for them to find another actuary, but you may find in some of the applicable codes of ethics that you should not disclose the reason is the TPA did not pay your fees. If this is the case, consider offering to continue working directly with the client as a change in your business model. Keep in mind that it is the TPA that is not paying for your services, but it is the plan sponsors who are using and relying on your services. The ways to proceed you listed have an element of vengeance or punishment which commonly is driven more by emotion, and it is the plan sponsors (not the TPA) who would suffer by attempts to remove the SB. Temper the emotion, seek legal counsel about how to proceed about getting paid for services delivered, and get some guidance on the cost of exploring legal paths forward in terms your time and expense against the known cost of writing off uncollected fees. Do take some time to implement, maintain and follow the terms service agreements and engagement letters with the TPAs and clients.

Your description of the facts suggests you might lack a written engagement with a pension plan’s sponsor or administrator, and further might lack a written engagement with the plans’ service provider. Recognizing those and other complexities, lawyer-up. About those of the pension plans that are ERISA-governed, consider Standards of performance of actuarial services, 20 C.F.R. § 901.20 https://www.ecfr.gov/current/title-20/section-901.20. Get your lawyer’s advice about whether the State law that applies to each engagement provides your retaining lien on (i) your certificates and reports not yet paid for, and (ii) those of a client’s records in your possession. If State law provides you some retaining lien, consider the extent to which Federal law supersedes State law, restraining your rights by a duty to return a client’s records. For example, 20 C.F.R. § 901.20(j)(1). Consider distinctions between a client’s records and the actuary’s work product. This is not advice to anyone. BenefitsLink neighbors, what do you think about withdrawing a Schedule SB because it was not paid for?