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Just to be clear ... you cannot change an allocation formula (or contribution formula, in the case of a mandatory match) once someone has earned the right to the allocation. So, for example, if someone needs 1,000 to share in the allocation, you have until that occurs to modify the allocation formula (usually considered to be about 5 months into the plan year, but if you have a company that has lots of overtime, that may be too late). If there are no allocation requirements in the plan, then you have to amend before the beginning of the year. If the plan has a last day requirement, people con't earn the right to the contribution until the last day of the plan year, so you have until then to amend. Hope this helps ...

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.

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.

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.

Read the plan document and the loan promissory note very carefully. There can be a difference between being eligible to take out a new loan while on medical leave versus being able to suspend repayments of an existing loan due to going out on medical leave. This difference may be buried in provisions that say there has to be a reasonable expectation at the time the new loan is taken that the loan will be repaid through payroll deductions. How medical leave plan works also may factor into the decision. Is the participant while on leave receiving pay from the company, a short term leave plan or a long term leave plan, and is any of this considered plan compensation? It may be unlikely but it may be possible for the source of these payments be a factor to consider. Some plan provisions may require a participant to be unable to make the loan repayments in order to qualify for the suspension. There also is the issue whether, by permitting this loan, the plan sponsor is creating a precedent that other participants who are on other types of leave could use to take out new loans. It also would be helpful to clarify the role of the participant versus role of the plan sponsor in invoking the suspension. It would seem the plan would say whether the participant medical lease has the right to suspend repayments, and the plan sponsor just needs to administer the plan's loan provisions.

I think you need to hold the benefit until a valid SSN or TIN is provided. This also needs to be reported to the correct authorities- SSA's Office of the Inspector General. This is from a previous post asking the same question:

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.

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.

If the plan covered a nonowner employee or former employee during some part of the to-be-reported-on year, was the plan ERISA-governed (for at least that part of the year)? ERISA § 3(1)-(3), 29 U.S.C. § 1002(1)-(3); 29 C.F.R. § 2510.3-3 https://www.ecfr.gov/current/title-29/section-2510.3-3 If so, wouldn’t the plan’s administrator continue reporting on Form 5500-SF, at least until reporting the first year that has no coverage of any nonowner (at any time during the to-be-reported-on year)?

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

Is everyone in their own group for profit sharing? That would be the typical method of accomplishing this.

You wouldn't pass the reasonable classification portion of the eligibility test (i.e., the safe harbor percentage or unsafe harbor w/ facts/circumstances) without any NHCEs. That would cause the HCEs (everyone in this case) to lose the Section 125 safe harbor from constructive receipt (i.e., be taxed on their contributions). Prop. Treas. Reg. §1.125-7(b): (b) Nondiscrimination as to eligibility. (1) In general. A cafeteria plan must not discriminate in favor of highly compensated individuals as to eligibility to participate for that plan year. A cafeteria plan does not discriminate in favor of highly compensated individuals if the plan benefits a group of employees who qualify under a reasonable classification established by the employer, as defined in §1.410(b)-4(b), and the group of employees included in the classification satisfies the safe harbor percentage test or the unsafe harbor percentage component of the facts and circumstances test in §1.410(b)-4(c). (In applying the §1.410(b)-4 test, substitute highly compensated individual for highly compensated employee and substitute nonhighly compensated individual for nonhighly compensated employee). Prop. Treas. Reg. §1.125-7(m): (2) Discriminatory cafeteria plan. A highly compensated participant or key employee participating in a discriminatory cafeteria plan must include in gross income (in the participant's taxable year within which ends the plan year with respect to which an election was or could have been made) the value of the taxable benefit with the greatest value that the employee could have elected to receive, even if the employee elects to receive only the nontaxable benefits offered.

If everyone is $160k+ you would want to use the top-paid group (top 20%) election for the cafeteria plan, which I'm assuming they are already doing for the 401(k) (unless it is safe harbor). Then you would have NHCEs and therefore likely no issues. Prop. Treas. Reg. §1.125-7(a)(9): (9) Highly compensated. The term highly compensated means any individual or participant who for the preceding plan year (or the current plan year in the case of the first year of employment) had compensation from the employer in excess of the compensation amount specified in section 414(q)(1)(B), and, if elected by the employer, was also in the top-paid group of employees (determined by reference to section 414(q)(3)) for such preceding plan year (or for the current plan year in the case of the first year of employment). Treas. Reg. §1.414(q)-1, Q/A-9(b)(2)(iii): (iii) Method of election. The elections in this paragraph (b)(2) must be provided for in all plans of the employer and must be uniform and consistent with respect to all situations in which the section 414(q) definition is applicable to the employer. Thus, with respect to all plan years beginning in the same calendar year, the employer must apply the test uniformly for purposes of determining its top-paid group with respect to all its qualified plans and employee benefit plans. If either election is changed during the determination year, no recalculation of the look-back year based on the new election is required, provided the change in election does not result in discrimination in operation.

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?

The 1-rollover-per-year rule only applies to distributions from IRAs, which are rolled over to another IRA. They can roll over as many distributions from plans as they like. They could also roll over multiple IRA distributions to plans without violating the rule.

Unlike some recent years’ tax laws for which CCH/Wolters Kluwer decided against publishing a “Law, Explanation & Analysis” book, they published this on the “One Big Beautiful Bill Act”. In it, I see nothing about a remedial-amendment grace. A “written plan” for an employer’s dependent care assistance program might have expressed a limit not as a dollar amount but rather by reference to Internal Revenue Code § 129(a)(2)(A). If so, there might be no need to edit the written plan. But if some change is needed, how long does it take? Two-tenths of an hour? (One to write the amendment or edit the restatement, and another one-tenth to email it to the client.) If a service provider does § 129 plan documents for dozens, hundreds, or thousands of clients, might one use software to send the change quickly? Further, some employers treat a written explanation given to employees as also the “written plan” § 129 calls for. If an employer’s plan will provide or allow $7,500 for 2026, the employer will want to tell its employees that good news. Some communicated this in open-enrollment materials.

They look only at the amended return. If the 5558 box is checked, they will see that the original filing was put on extension. The very short version is you don't file an extension for an amended return, but an amended return should disclose that the original filing originally was extended.

Assuming there was a 5558 filed to extend the original filing and the box was checked on the original filing, then check the 5558 box on the amended return. An amended return replaces the original filing in the EFAST2 records.

Sorry for the delay - so many meetings! The CPI-U for July, August, September of 2025 are all published with values of 323.048, 323.976, and 324.800 respectively. Based on Tom Poje's spreadsheet, the dollar limits for 2026 will be: NOT Official via any IRS pronouncement yet, of course: Deferral limit: $24,500 (up from $23,500) Catchup: $8,000 (up from $7,500) (Super-Catchup, age 60-63 = $11,250, (unchanged) Compensation Limit: $360,000 (up from $350,000) Annual Addition Limit: $72,000 (up from $70,000) DB Limit: $290,000 (up from $280,000) HCE: $160,000 (unchanged) Key Employee: $235,000 (up from $230,000)

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

You might consider a strategy in the other direction: Respond promptly, and let delays in the IRS use up some of the remaining statute-of-limitations period. Later, when the IRS requests the taxpayer’s consent to extend the statute-of-limitations period, you’ll have a bargaining chip. You might say your client will consent only after there is a written agreement for the IRS to abandon and close all but a specified set of remaining issues, narrowing any further examination to only those.

Question 1. Depends. A fiduciary of an ERISA governed plan may eliminate a group annuity contract (GAC) and not breach their fiduciary duties, even if the participants incur large losses. However, this is a legal question that depends on the facts and circumstances and would only be answered after a participant files suit and there is a determination in court. Here, where the plan sponsor by its actions is going to create large individual losses, you friend should be taking all actions necessary to minimize the risk of a finding of breach of fiduciary duty. Your friend needs to be able to show that he fulfilled his ERISA fiduciary duties. He can’t just say I don’t like the GAC and I want mutual funds. He has to show that he conducted a prudent and detailed analysis of whether surrendering the GAC and paying the surrender charge is in the best interest of the participants as a whole, taking into consideration the current market and participant needs. He should do a detailed comparison of the various alternatives, i.e., holding the GAC, a partial surrender, total surrender, costs of other investments, etc.. It is a given that he must show that he followed all the plan provisions and also the GAC provisions to ensure that the minimal surrender charges were paid. If possible, he should consult with an independent financial advisor/expert (preferably not the advisor he is moving to.. to avoid conflicts of interest) to ensure the decision was prudent and in the best interest of the participants. As with all fiduciary decisions, but especially here where there may a high risk of litigation (he is in essence creating a loss), he must be certain to document his decision (including detailed records of all the analysis performed, alternatives considered, the decision-making process, and the reasons for the final decision to surrender the GAC, etc.). Also, he should attempt to effectively communicate the change to the participants showing how it is in their best interest to do this. Of course, he has to walk a fine law … if he shows the GAC is such a bad deal someone might consider filing suit questioning the initial decision to put all the money in the GAC in the first place. Another option which many plan sponsors utilize when in this situation is simply freezing the GAC and redirecting new contributions into new investments, e.g., mutual funds. Here, he simply stops adding any more money to the GAC and in essence starts a new investment plan with the new mutual fund investment slate. At the point the GAC surrender period expires, he would terminate the GAC without the surrender charges and the GAC money would then flow into the new investments. Don’t know how long the surrender period is but at least for some of the money the participants will have more control. He may need to amend the plan for this. It doesn’t sound like your friend would want to do this but some plan sponsors will pay the surrender charges. Paying the surrender charges is more complex under the tax code and, if desired, your friend should consult an ERISA benefits attorney. see @CuseFan Question 2. This allocation should already be addressed in the plan and the GAC. All qualified plans must have “definitely determinable” benefits. Even though the funds are all invested in a single GAC, there should be current terms under which those funds are allocated to each of the participants. As you state, they are all getting statements now that track the amounts in the GAC allocated to each of the participants. The surrender charges would be allocated amongst the participants under a formula in the plan/GAC. There must have been participants who terminated employment and qualified for a distribution from the plan. How were their benefits determined? Overall, your friend should stay away from any type of modification or amendment of these provisions. Just thoughts...

We have always taken the position that if at any time during the plan year the plan covered common law employees we would file Form 5500 or SF. We only file 5500-EZ if it covered only EZ eligible employees for the entire year. That has been our interpretation and is not legal advice to anyone. As for filing of the Form 5500-EZ under $250K that would be a client decision but be ready for an IRS letter and explanation if you've been filing Form 5500-SF and suddenly have no filings in the next year.

Assuming John and Joe don't have ownership in ABC that might change this, it does not appear to be a controlled group between A and B under §414(b). The ABC company does not own at least 80% of Company A for a parent-subsidiary group to exist. Though it would for 415 limits, since the at least 80 is replaced by more than 50/ So if A & B have separate plans you still have 415 aggregation but no other aggregation. ABC would be a parent-sub of B, but not A.

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

1. Why do you want to do this? 2. Are you thinking you can do a discretionary match only for the HCEs?

Well this is how I see it: (E) sets the beginning number alone. The beginning number alone is 150% of the 2024 catch-up limit. After 2024, the reference to 2024 is moot. Why? Because (C)(i) says the amount in paragraph (E) is adjusted for inflation. I actually don't where the other view would come from?

Yikes drakecohen. First, I agree with previous responses: 1. Lawyer up 2. Get a clear understanding of your professional obligations based on your credentials and memberships. While getting stiffed sucks (I still refuse to patronize businesses who stiffed me decades ago), you've got a business operation problem. You allowed this client to be 2 years in arrears. $30k is some serious money - that would keep me in beer and diesel for 20 years! I would immediately be sure you have written service agreements in place for ALL engagements. If long-time clients resist, explain that your E&O carrier requires them. At the same time, rethink your billing practices - start billing quarterly in advance or at least get 1/2 when the year end census request goes out and spell it out in the service agreement. As far as your deadbeat client, focus on recovering as much as possible and also prepare to walk away from that block of business. They left your circle of trust when they stopped paying you. If you want to try pulling their clients that you serviced , avail yourself of legal advice and don't run afoul of professional ethics/standards. None of the above will be as emotionally satisfying as the 5 actions you listed. If you need to drain some venom, visit the shooting range or rent an excavator for the weekend.

$12,000 is what seems logical, but... The plain language of 414(v)(2)(E)(i)(II) says 150% of the amount in effect for 2024, which would be $11,250.

Beyond law, listen, carefully, to Paul I’s observations about civility and practical sense. And about an ethics code that results from membership in a voluntary association, here’s one bit: “. . . . The Actuary shall not refuse to consult or cooperate with the prospective new or additional actuary based upon unresolved compensation issues with the Principal unless such refusal is in accordance with a pre-existing agreement with the Principal. . . . .” American Academy of Actuaries, Code of Professional Conduct, Precept 10, Annotation 10-5 https://actuary.org/wp-content/uploads/2014/01/code_of_conduct.8_1.pdf.

A form of this question was posed in the ASPPA 2002 Annual Conference - IRS Questions and Answers question 5: 5. If a 401(k) Profit Sharing Plan uses an individual funding vehicle with a $2,000 threshold and the business owners are able to immediately move into this funding vehicle that had multiple investment options, but non-owners with smaller 401(k) contributions are in a pooled money market until they reach the $2000 threshold, is this discriminatory? What if the threshold is $10,000? $25,000? $100,000? This is a benefits, rights and features issue and, depending on the facts, could either pass or fail. Also note that SDBAs got a lot of attention in EBSA's Field Assistance Bulletin No. 2012-02R, not about a dollar threshold, but about all of the disclosures that must be provided to all plan participants about SBDAs as an investment option.

@Bri is correct in pointing to the plan documents - adoption agreement and basic plan document - as a starting point. Conceivably, an amendment that says the spouse is eligible immediately could be simpler approach. This does assume that the spouse has earned income from the company. Be very careful as the employment of a common law employees can become a minefield for owner-only plans (OOPs!) For example: Some pre-approved OOPs documents have provisions that say as on the date there is an eligible common law employee, all contributions to the OOPs stop immediately on that day and the company needs to adopt a traditional plan to provide for any contributions to anyone after that date. If the common law employee becomes eligible to defer as a Long Term Part Time Employee, then the plan will no longer be an OOP.

Given what has been stated, the plan does not explicitly prohibit a loan to a participant on or going on leave. Since it is silent, it seems the plan could permit a loan to this participant. There is no prohibition in the Code for a loan being given to a participant on or going on leave. To me this would fall under the plan administrator's right to interpret the terms of the plan. As long at the loan provisions (e.g., suspension of payments, reamortization, and deemed distribution, if necessary) are administered properly, I don't see a qualification failure if the loan is provided. Once concern though is that your post states that the Plan Sponsor wants to work with this participant and permit the loan. Presumably this type of situation has never come up before (if it has, it should be treated like it was in the past). However, if the loan is approved and this situation comes up again, the loan should be made to the next participant who requests a loan when they are going on or are on leave (regardless of the Plan Sponsor's desires) as loans must be available to all participants and beneficiaries on a reasonably equivalent basis and the loans must be administered according to a uniform loan program.

I have not seen a situation like the one Lou S. describes. But that’s because plans I work with use a recordkeeper’s nondiscretionary computer-based procedure to approve or deny a claim for a participant loan. A participant’s request either is in good order with the rules the plan’s administrator instructed the recordkeeper to apply, or is NIGO and denied. There would be no human discretion, and the computer would lack information about a future leave. (The loan-application form has the claimant state every fact and every promise needed to follow the plan’s loan provision and procedure, and state everything under penalties of perjury.) If I were the human deciding for a plan’s administrator (and assuming I had caused the plan’s sponsor to revise the plan’s governing documents and written procedures to my satisfaction before I hypothetically consented to serve), I would not deny an otherwise sufficient claim for a participant loan merely because the participant will soon be on an approved leave if the administrator lacks knowledge that (i) the participant does not intend to repay the loan, or (ii) the participant won’t return to work soon enough, or her pay won’t be enough, to reamortize and repay the loan as the I.R.C. § 72(p) rule calls for. I recognize that claims procedures I’m used to can take on extra difficulties when a plan’s administrator (often impractical to separate from the employer) has too much information about the participant. This is not advice to anyone.

There has to be a bona fide separation however. If there is an agreement the person will be brought back you can't pay them a benefit. The classic example is a person who is terminated with the understanding once they get their benefit paid they will be rehired. This isn't exactly the same but if there is some kind of commitment to bring this person back after a given period of time I have my doubts. If this is a layoff and it is simply if things turn around we will take you back there would be a bona fide separation. I think you need more data regarding this.

of course, there is nothing to stop someone from adding additional items to the spreadsheet. the spreadsheet originated in the is way: years ago, when Benefits Link first started, Dave Baker had a spot you could 'articles' or something similar. too long ago for me to remember. I had been curious how the numbers for limits were calculated, the IRS would release them , and by coincidence always at the time of the ASPA Annual Conference. So I researched the issue and wrote an article about how the values were derived. Someone did contact me and said everything was fine, but I didn't indicate the calculation were done to 3 decimal places. Then someone else sent me a spreadsheet he created based on what I wrote up and asked me to see if it made sense. (I think it was Ken Vollmer) Spreadsheet worked great, I modified the spreadsheet to my tastes, and then the following year verified the numbers matched the IRS calculations. After that I would plug in the CPI values and post the 'projected' calculations on Benefits Link, probably as early as June. And then eventually posted the spreadsheet so others could use it. Certainly the spreadsheet was a better contribution than my postings in the humor column or any pension songs I attempted, I'm sure. God bless all, enjoying retirement, helping out at church in many different ways. Taught myself to play the psaltery. peeking in at the web site from time to time.

If a charitable organization’s § 403(b) plan is not a governmental plan or a church plan, I would not (without getting more facts) suggest the organization attempt to treat a plan that includes a § 414A automatic-contribution arrangement as a non-ERISA plan. That’s because I think a court could decide that an organization “established” a plan by deciding essential terms of an automatic-contribution arrangement, or “maintained” a plan by administering an automatic-contribution arrangement’s provisions. austin3515, many of my notes in BenefitsLink discussions avoid stating a conclusion. That’s for more than a few reasons, including: A warning that what I write here is not advice might be ineffective. Even if I expect that a regular BenefitsLink neighbor would not assert any kind of reliance, I still worry about what other readers might perceive. My malpractice insurer suggests cautions about what a lawyer puts in social media. I want my insurance applications to be truthful. I likely haven’t done complete research. It’s work to check all courts’ decisions. Even if I’m completely confident about a point of law, I don’t want something I’ve written to be quoted against my client, even incorrectly. (I’ve had that sad experience with litigation.) I am counsel to law firms other than mine, and avoid publicly expressing a view that might call into question a firm’s advice to their client. I am a coauthor in multi-author books, and avoid publicly expressing a view that might differ with, or embarrass, a coauthor. Likewise, I avoid anything that might embarrass or otherwise burden a publisher I work with. That includes topics and points on which I’m not the publisher’s author or editor. I try to help smart practitioners who can do their own reasoning. But I don’t want to give a too-easy answer to someone who doesn’t think for oneself. And many questions of employee-benefits law don’t have a settled answer. Law is a prediction of what a court would decide; we often don’t know. None of this is advice to anyone.

The CPI-U for July, August, September of 2025 are all published with values of 323.048, 323.976, and 324.800 respectively. Based on Tom Poje's spreadsheet, the dollar limits for 2026 will be: NOT Official via any IRS pronouncement yet, of course: Deferral limit: $24,500 (up from $23,500) Catchup: $8,000 (up from $7,500) (Super-Catchup, age 60-63 = $11,250, (unchanged) Compensation Limit: $360,000 (up from $350,000) Annual Addition Limit: $72,000 (up from $70,000) DB Limit: $290,000 (up from $280,000) HCE: $160,000 (unchanged) Key Employee: $235,000 (up from $230,000) the 2026 HPI comp number should be $150,000 (up from $145,000) It's unclear but my guess is that means in 2027 we look at comp over $150,000 paid in 2026 for determining HPI's in 2027. The official taxable wage base for 2026, announced by SSA, is $184,500 (up from $176,100).

Whatever ERISA and the Internal Revenue Code might permit a plan to provide, there might be three layers of documents to read. Do the plan’s governing documents provide for using forfeitures to pay or reimburse plan expenses? (Just yesterday, I reviewed a set of plan documents, made using a big recordkeeper’s IRS-preapproved documents, that read strictly preclude using forfeitures on plan expenses.) Does the service agreement obligate the recordkeeper to process the plan trustee’s reimbursement of a plan expense the employer paid? Does the service agreement set restrictions or conditions on processing amounts from forfeitures? (Recognizing that many plan sponsor-administrators get little or no legal advice, a service provider might narrow its obligations or set conditions to manage risks that the service provider is criticized for “allowing” a plan’s administrator to do something it ought not to have done.) Does the trust agreement or custodial-account agreement provide for the trustee or custodian to reimburse a plan expense the employer paid? If a reimbursement is provided or not precluded, what conditions does the agreement set for showing the trustee or custodian that the reimbursement is proper? This is not advice to anyone.

I am going to guess regarding the $145,000 HPI limit. This was stated to be adjusted the same way as the others, but using 7/1/2023 - 9/30/2023 as the base period for years beginning after 12/31/2024 with increases occurring in $5,000 increments. Thus, $145,000 was the limit for 2024 when the law required mandatory Roth Catchups to begin (and in an unusual move by the IRS, we were allowed to ignore the law in 2024 and 2025), and the COLA for the 2025 HPI limit would have been increased this as follows: $145,000 x (314.540 + 314.796 + 315.301) / (305.691 + 307.026 + 307.789) = $148,799, which is not $5,000 more, so no increase for 2025, stayed at $145,000 But, for 2026: $145,000 x (323.048 + 323.976+ 324.800) / (305.691 + 307.026 + 307.789) = $153,077, which is at least $5,000, so the 2026 HPI comp number should be $150,000 It's unclear to me based on the law/regs, but my guess is that means in 2027 we look at comp over $150,000 paid in 2026 for determining HPI's in 2027.

I rarely seen it longer than 20 years and often its 10 years - which has always been my recommendation if they really want to go longer than 5 years. In these times, the probability of simply being employed for 10 years at the same employer has dropped considerably and odds are the employee will will have an outstanding balance when they leave. And I find it rare that a participant can pay off a loan in full when it comes due before maturity. So that just goes to Paul I's last point. Most participants don't think thru all the financial consequences if they should suddenly incur a taxable distribution down the road. Also, some payroll providers may charge their own processing fees in additional to the financial / TPA recordkeeper's loan fees. I do remember once that an owner had a desire to assist a particular employee (or family member) which resulted in 30 year term for home loans being added. I think, maybe moreso in the past, that the adoption agreement would get filled out with a 20 or 30 year term automatically entered at time the plan is set up without anyone really having put a lot of thought into that decision (until an EE puts in a request).

The decision as to whether someone gets a PS contribution should be made by the EMPLOYER not the specific HCE unless it is an owner-only plan. If the EMPLOYER was smart, they would give a particular HCE a nominal amount so such HCE's compensation may be used in the deduction determination.

Whether a plan is subject to mandatory auto enrollment is based on the date the CODA is established. Presumably the CODA was established when the profit sharing plan was established, so it would be after December 2022 and therefore not exempt.

Agreed, but if the first plan was in place less than 10 years then IRS could challenge its "permanency" - so they may want to get their ducks in a row regarding business reason for the termination.

Is the plan formula integrated with SS or is it a new comp design something like where everyone is in their own group where you are dong the 401(a)(4) testing with permitted disparity. Because if its the former it's pretty straight forward where every one gets 1 percentage on the base salary plus an additional percentage on the excess salary. So in your case it's possible everyone should be getting 12.93% base plus 5.7% excess and you look to the doc on 415 for the two owners who will go over the 415 limit and see what your document says in that situation. It may be refund of elective or it may be limit employer contribution. If it's the later, you should be able to run the calcs through your software and see what you need to pass. But as they say, when in doubt, read the document.

Buyer sponsors plan, terminates plan, then becomes sponsor of acquired plan. Yes, I think you have successor plan situation. Can they terminate, sure, but that won't be a distributable event. Why not merge plans - what is the aversion? I understand not wanting potential compliance liability for acquiring someone else's prior mistakes, but isn't that part of due diligence and indemnifications? In your situation, if the buyer is willing to sponsor the plan of its acquisition, why would it not want to merge? Unless buyer knows its plan has issues and wants it to go away?

https://www.asppa-net.org/news/2024/9/plan-amendment-deadlines-extended-but-still-obligatory/ Per ASPPA - 12/31/2026

The HSA rules have little in common with the HRA rules because the HRA is an ERISA employer-sponsored group health plan. That said, HRAs are almost almost always unfunded notional accounts that are bookkeeping entries paid from the employer's general assets. In that overwhelming majority situation, there really isn't such thing as a mistaken HRA contribution. I suppose you could have a funded trust account HRA, which would be different. In that case there are probably plan/trust terms governing how to address overcontributions. It's possible you're referring to the much more common issue of mistaken HRA distributions. In that case, I recommend following the health FSA (not HSA) framework: https://www.newfront.com/blog/correcting-improper-health-fsa-payments

Since this thread is 20 years old, one can only hope that it has been resolved by now...