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Auto enrollment is set to 3%.

Participant who had opted out and never deferred is rehired.

I can't seem to find this in the Plan Doc.

Would they need to opt out again, or would the original opt out still stand? Not sure to what extend number of breaks in service would affect this.

Has anyone hired an AI consultant to help with streamlining processes? How did it work out?  Can you refer a firm/consultant?

For an off calendar year plan with a 4/1-3/31 plan year, how will the Roth mandate work? For example the 2025 plan year ends 3/31/26, are all catch-ups made starting in January for HPI's treated as Roth?

Plan allows for loans. Loan program allows for payments to be suspended while on medical leave.

Plan does not allow for hardship.

Participant is not old enough for in-service.

Participant goes out on approved medical leave. 

Participant now wants to take a loan to cover his medical bills, sponsor wants to allow.

Participant and Sponsor then want to immediately suspend loan payments (that is no loan payments will be made initially) until participant returns from medial leave, not to exceed 1 year. Loan would accrue interest and be re-amortized so as not to exceed 5 year period when participant returns.

Is this allowable from a code standpoint?

Forgive me if this has already been discussed.

If a 401(k) loan is made from pre-tax funds and the loan becomes due upon termination of employment, the loan offset is taxable unless rolled over. If the loan is made entirely from Roth funds, I assume the portion of the offset attributable to principal is tax-free, but the portion attributable to interest ("earnings") is taxable (if not rolled over) -- unless it's a qualified distribution.

Am I looking at this correctly? Thanks.

How much notification does a 403(b) need to give participants if they are amending the Plan to go from a mandatory matching contribution to a discretionary?  Is it 60 days?

Thanks!

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Is there any reason a participant who has been 'temporarily laid off" is eligible for a distribution?

I don't know the company's definition of 'temporarily' but he was apparently told he can take a distribution, but I feel like employee is not truly terminated.

The plan has a Profit Sharing contribution (new comp) with allocation conditions of 1,000 hours and employment on the last day of the plan year, with a waiver of these conditions in the event of death and attainment of Normal Retirement Age (NRA).

While generating the Coverage Test, if a participant is reported as death and having less than 500 hours during the current year and received a Profit Sharing contribution, should this individual be treated as a benefiting (i.e., non-excludable) employee for coverage testing purposes? Or else, this employee needs to be excluded in coverage because of less than 500 hours? 

If there are no allocation conditions in the plan and death participant has less than 500 hours and everyone receives a Profit Sharing contribution, what is the applicable method of excluding in coverage test for less than 500 hours?

Could you also point to the relevant Treasury Regulations or other official guidance that explains this treatment in detail?

A single member business guy setup a plan (Solo) and rolled into the plan old pension money he had from when he worked somewhere else.  He is telling me some of the money is Voluntary After Tax contribution money... not Roth deferrals.  He took a distribution from the VAT money rolled into the plan.  Do you treat VAT distributions the same way you treat Roth distributions?

Thanks to all in this forum for their help as I bumble through our NQDC plan.

We are approaching the first vesting cliff at the end of this year.   The vesting occurs basically at 12/31/2025.

Since the value of the plan is based on underlying investments and not a fixed interest rate and could move quite a bit by year end, I plan on using the Lag Method to report the FICA earnings.  I anticipate this will be run through payroll around the end of January or more likely the end of first week of February.

I know that for the Lag Method, I have to report not only on the vested balance but also add interst to the vested amount.  From what I have read the amount must be increased by interest through the date on which the wages are treated as paid, at a rate that is not less than the January Mid-Term AFR .   

ILLUSTRATION

For purposes of illustration, assume that an original award of $50,000 several years ago is valued at $62,000 as of 12/31 based on credited earnings.

Vesting will be credit on paydate 2/7/2026.  

Mid Term January AFR rate is 3.8%

Calculation 

Vested Amount at 12/31 - 62,000

Multiplied by AFR Rate -  3.80%

Equal Annual Interst - $2,356

Multiplied by Days until Reported  / 365 days in year -  38/365 = .1041 - 31 days in January plus 7 days in February until paydate

Equals Interest to be added to Vested Amount - $245.28

Vested Amount ($62,000) plus Interest ($245.28) = $62,248.28 = Total Amount subject to FICA 

1) Is my understanding of the Lag Method correct?

2) Does my method of calculating interest make sense?

Thank you as always for any guidance and feedback.

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For a § 403(b) participant who’s 61, has 15 years of service with a qualified organization, and sufficiently little past contributions, is $39,500 [$24,000 + $12,000 (age-based catch-up) + $3,000 (I.R.C. § 402(g)(7))] her elective-deferral limit?

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