We have a prospect that has a current 401k Plan in place with safe harbor match, new comp profit sharing.  The employer terminated several of the younger employees and now doesn't like the new comp allocation. 

Any thoughts about not making a discretionary contribution in the 401k, instead establishing a new retroactive PSP, grandfathering all current participants and not including a last day rule so those younger employees would be included?  Is there a trap I'm missing?

View the full text of this job opportunity

View the full text of this job opportunity

I was just reading something and came across a note I had never seen before.  Is it true that if the Plan is covered by the PBGC, the 6% limit on employer contributions into the Profit Sharing Plan doesn't apply?

We always adhered to the 6% rule, even for PBGC Plans, but what I read seemed to imply that it wasn't the case.  So I just wanted to make sure I was reading this right.

Thanks in advance

View the full text of this job opportunity

Can you make an amendment to exclude HCEs from being eligible for a Safe Harbor plan (effective 1/1 and amended at least 30 days before beginning of the year)? These HCEs already met the plan's eligibility requirements.

Thanks!

A deferred compensation plan allows a company's directors to elect to defer a portion of their director fees.  The deferred amounts are distributed upon the earlier of a 409A change of control or a director's separation from service.  At the time of an election to defer, the director can elect to receive payments upon a separation from service either in a lump sum or in annual installments.  The plan provides that if installments are elected, the number of annual installments will equal the number of full calendar years the director was a participant in the plan, up to 10 installments.  So, for example, if a director has a separation from service after 6 years in the plan, he or she will receive 6 annual installments, and if the director has a separation from service after 12 years in the plan, he or she will receive 10 annual installments.

This seems like a violation of the toggle rule because it provides for different times and forms of payment for the same 409A payment event, and I don't believe that any of the exceptions apply, but I'd love to entertain an argument that it's permissible.

View the full text of this job opportunity

This is too simple, but here goes:

Participant has a $50,000 vested 401k account balance.  They take a maximum loan of $25,000 and have no other loans at the time

A few days later, they realize they need more $$$ and wish to take a second loan (plan allows for this).

Lets say the account balance is static and in a few days, the vested account balance is now $25,000 (after the initial loan) and no loan repayments have been made yet.

Can the participant take a second loan for $12,500 (50% of $25,000)?

I'm sure the answer is "No", but the above makes sense in a weird way.

Any comments are appreciated.

View the full text of this job opportunity

2 separate one-person calendar year plans terminated and distributed assets in 2025.

Both plans received interest/dividends at the last moment that were not able to be distributed by 12/31/25 and ended up with balances.

• Plan 1 was $0.50.
• Plan 2 was $3,500.00.

Both plans managed to zero out by 1/31/26.

Both plans have asked to incorporate those amounts into 2025 distributions with the following implications:

• Form 1099-R's would be amended
• 2025 Form 5500 would be Final

I think we can live with doing that for Plan 1, but Plan 2 is more questionable. We are more comfortable with a 2026 Final 5500 but the client was promised (by the Advisor) that would not be necessary.

Just looking for thoughts on whether there is a de minimis for this situation of when to combine it for prior year?

We just finished a brutal plan conversion. The plan was on Guideline and went to accrue during our blackout. 

All of the conversion assets were sitting in cash for 31 days, which is absolutely unacceptable to me.

For those who are more familiar with the recordkeeping side, could you help me understand how this could happen? The RK said they didn't have all the conversion files, blah blah blah.

1) How many plans are converted in kind vs sold ->Wire->Reinvest?

-And why aren't all plans in kind?

2) What can I do in the future to prevent this from happening? Just send the RK daily emails asking for updates when money is in motion?

What is your guys process?

Client has 105 account balances (125 participants) at the beginning of the plan year.  I am assuming we can use the 80-120 rule to continue filing the 5500-SF until the number of account balances exceeds 120 as of the beginning of the plan year.  Any input would be greatly appreciated.

View the full text of this job opportunity

View the full text of this job opportunity

View the full text of this job opportunity

Hi,  Plan that is terminating has only one participant with balance in SDB and the security is currently not tradable.  the Plan sponsor wants to close the plan what option do we have? can the plan sponsor direct to move the SDB to a different fund? 

A 401(k) plan allows for Roth contributions. It also contains a provision limiting deferrals to 10% of participant compensation.

A participant contributes 12% of their pay in both ED (pre-tax) and Roth throughout the year (1/1/2025 through 12/31/2025). It is now just discovered and deemed an operational failure for not following the terms of the plan document.

The plan document does not outline how this should be corrected. The plan sponsor is self-correcting under EPCRS.

Is there any guidance on how to determine what excess to refund? (given that the participant deferred both pre-tax and Roth) Is it last in - first out? Is it prorated somehow? Or is there no guidance on this and the plan sponsor should just choose something and be consistent?

Background:

Non-Electing 403(b)(9) Church Plan 
2026 Limits apply

Participant age 50
Includible Compensation = $80,000
Deferrals = $8,000
Employer Contributions = $72,000

Question:
I will admit this seems so basic, but for some reason I am feeling perplexed today (sigh). Perhaps my understanding has been wrong all along, but I was originally under the impression that one did not have catch-up contributions until he/she exceeded the 402(g) limit.

Is there any instance where the employee deferrals in this scenario would be considered as age-50 catch-up contributions, avoiding an excess contribution scenario? Does the timing/order of the contributions matter? (For example, if first the employer contributions were made and maxed out the 415(c) limit, could deferrals made after that count as catch-up contributions?)

I read through section 414v and became confused by it stating [paraphrased], catch contributions are deferrals made that exceed ANY of the applicable limits, of which include limit on elective deferrals OR annual additions. In the scenario above, he exceeded the 415(c) limit with employer contributions. Does that point alone justify future deferrals in that year as catch-up?

"With respect to an applicable employer plan, catch-up contributions are elective deferrals made by a catch-up eligible participant that exceed any of the applicable limits set forth in paragraph (b) of this section ... 
paragraph (b):
(b) Elective deferrals that exceed an applicable limit—(1) Applicable limits. An applicable limit for purposes of determining catch-up contributions for a catch-up eligible participant is any of the following:

(i) Statutory limit. A statutory limit is a limit on elective deferrals or annual additions permitted to be made (without regard to section 414(v) and this section) with respect to an employee for a year provided in section 401(a)(30), 402(h), 403(b), 408, 415(c), or 457(b)(2) (without regard to section 457(b)(3)), as applicable.

TIA

View the full text of this job opportunity