Hi

A Happy New Year to All. Is there anywhere on line that one can download a fillable pdf of a schedule SB? Thank you!

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A client has a new employee who needs some training on a few aspects of benefits administration, including both retirement and welfare plans. Any suggestions?

Based on my google search it appears that I have until 12/31/2025 to amend a 401(k) Plan for the 2026 Plan Year regarding the Safe Harbor Match.  However, I cannot find anything that specifically states that the Amendment can change the Safe Harbor Method from a SH Match to the SH Nonelective.  Is this allowed?  The client has already distributed the SH Notice to the Participants stating that the Plan will provide the basic SH Match for 2026.

If the 401(k) gurus out there believe I can amend the Plan, then I will prepare a new Notice stating that the Plan will be providing the SH Nonelective rather than the Match.

Thanks for any input.

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Please help to settle a disagreement in the office - is state withholding calculated using the gross distribution amount or the federal amount?

Winner gets a cookie.

A 73 year old has their first RMD this year of $8,000. After reading an article on Roth conversions, the IRA owner elects a $30,000 Roth conversion before withdrawing their RMD. It seems the IRA custodian allows this as the IRA owner's intent was to do a rollover, taking possession of the $30,000 withdrawal and within 60 days, deposit it in a Roth IRA (his first) as a Roth conversion. But the $8,000 will be considered the RMD withdrawal, not a Roth conversion while the remaining $22,000 will be considered a Roth conversion. So under these circumstances, assuming this 73 year old or his spouse has no earned income, that an $8,000 excess contribution has been made to his Roth IRA? If so, the IRA owner has until Oct 31, 2026 to withdraw the excess Roth contribution and its associated earnings. 

Is this correct?

We started a new plan for Company R in 2025, and we just found out that the plan's financial advisor (through a shell company he owns 100% of) purchased 10% of Company R's stock sometime in 2025.  The plan is on a recordkeeping platform that pays the advisory form some amount of bp (50, I think).

This seems to be a prohibited transaction; I don't see any way for the FA to keep getting paid on this.  And he should return all the fees paid to him since the purchase (with earnings) to restore the plan.

Anything else I'm missing?  Thanks.

Received a call from an Advisor.  He has a prospect with 2 Partners, no employees.  It is an LLC taxed as an S Corp and the 2 partners receive W-2 income.  The Advisor and CPA want to set up the plan for 2025 and have the partners make the maximum deferrals before year end from a bonus check.  The plan can be set up for 2025 but can they make the employee deferral contributions at this late date for the 2025 year?  I question it because they take W-2 comp and not Schedule C or K-1.

Hi - I usually can keep all the SEP & SIMPLE rules straight but this one is flummoxing me for some reason.

Our client started a SEP in 2023 with one year of service as an eligibility rule. Employee was hired October 2024. In May of 2025 they updated the SEP to 3 years of service before eligible for the plan.

If they do a SEP contribution for tax year 2025 is the employee required to receive a SEP contribution because they were hired under the 1 year eligibility? or does the employee fall under the 3 year eligibility?

As we all try to navigate the year-end craziness and balance life with family and friends, I just wanted to wish everyone a safe, relaxing and enjoyable holiday season!

Friday afternoon, no brain activity as usual.

Combo CB/DC. CG with ABC corp and XYZ corp

ABC sponsors both plans and XYZ is an adopting employer for DC plan only

DC is 401k with SH match

CB excludes all XYZ employees. All ABC employees participate in both plans and get PS allocation as well.

None of the XYZ employees defer and none get any PS allocation either (401k/SH has 3 months and PS has 12 months+1000 hours). None of the XYZ employees work 1000 hours but all eligible for deferral+SH and since no one defers, no one get SH thus T/H is satisfied.

ABC eligible compensation is 500k and XYZ eligible compensation is 100k

Need to use 31% rule for deduction.

Do I use 500k or 600k?

Thanks

I'm looking for perspective on the issue of the Top-25 restricted payment rule in DB plans, or specifically in this Cash Balance Plan. We have a participant who is among the Top-25 highest paid employees and would be restricted from taking a lump sum under these rules under normal circumstances. The relevant facts are as follows:

• Individually designed DB Plan effective July 1, 2009, restated July 1, 2021.
• Plan has only ever covered HCEs (NHCEs have never been covered; professional medical group).
• There are approximately 60 participants, but about 70 employees total.
• Currently less than 100% funded, but still above 80% threshold.
• Benefits include interest credits tied to actual market returns, subject to anti-cutback rules (participants effectively "fund" their own benefit).
• Plan Document includes legacy restricted payment language referencing:
  • Top-25 highest paid HCEs
  • Current liabilities
  • Escrow arrangements
  • An explicit exception stating the restriction does not apply if the plan never benefited any NHCEs.

Here are my two specific questions:

1. From a technical standpoint, is it correct that the legacy top-25 restricted payment rule does not apply in an HCE-only plan, consistent with the "never benefited NHCEs" carve-out found in older individually designed documents? 

2. Setting aside funding level thresholds which are not currently triggered, how would you view the risk of allowing distributions in a less than fully funded HCE only DB plan, where early distributions could materially shift funding risk to remaining participants due to anti-cutback provisions? Particularly when the participant seeking the distribution is among the Top-25 highest paid?

More generally, is this just a known but acceptable feature? Is it still legally required to not allow a top 25 paid employee to take his full lump sum? Is this a fiduciary concern requiring discretionary limits? Or if this is not a legal issue, is this something that should be voluntarily adopted to prevent funding issues?

I appreciate any insight you can provide.

Hi all, it's been over a year or more since I've in. I'm retired but trying to help someone out...

a 403(b) participant passed away and TIAA/CREF is saying that he named his widow for a portion of his account/certificate, but did not name a bene for another portion, and that portion is to go to his spouse 50% and his estate 50%. If in fact there was no bene des that checks out with the SPD (confirming my long-held belief that 403(b)s are a different world).

I'm familiar with the idea of a see-through trust, but is there any such thing as a see-through estate? She is the only beneficiary of his estate so she is ultimately entitled to all of the benefits, and of course would prefer to roll them over rather than open an estate and have the estate treated as the direct beneficiary.

I don't think so but thought I would take a shot. 

An employer wants to amend their plan to adopt QACA.  Can they have QACA apply to just employees hired after a certain date or does QACA have to apply to everyone? They currently have a basic safe harbor match plan.   The QACA match differs from the SHM and having 2 different SHM formulas in the plan is not permitted (I think).  

The employer would prefer not to have existing employees have to go through any enrollment process or have anyone currently employed defaulted into the plan.  But if everyone currently employed has an affirmative election to participate or not in the plan, would those employees really need to complete anything for the QACA?  I would think not.

Thank you for replies

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Hello,

My employer has done quite a few layoffs this year and has offered those former employees COBRA subsidies as part of their severance agreement. My question is: if an employee is offered a COBRA Subsidy for a certain number of months, but does not actually elect COBRA, does that amount still need to be reported on their w2 for informational purposes? Or does it only need to be included if they elect COBRA?

We just received the 2025 SECURE 2.0 Amendment from ftWilliam. Most, if not all, of our clients will be going with the default selections in the amendment.

Out of curiosity, are firms having their clients formally adopt the amendment now, or are most waiting until the required deadline of December 31, 2026?

Thank you!

A few questions questions regarding SECURE Act amendments:

1. My understanding is that 401(k) plan documents have until December 31, 2026 to be amended for any secured act provisions, even if operationally implemented earlier (e,g, Roth catch-up elections implemented in 2025). Is this correct?

2. Are plan amendments required for:

      a. The annual paper statement requirement of Secure 2.0 Sec 338 - my inclination is that you wouldn't have to unless there were something in the plan document that suggested something to the contrary.

      b. The disclosures for eligible unenrolled participants requirements of Secure 2.0 Sec. 320 - again,  my inclination is that you wouldn't have to unless there were something in the plan document that suggested something to the contrary.

Thanks!