View the full text of this job opportunity

View the full text of this job opportunity

View the full text of this job opportunity

View the full text of this job opportunity

View the full text of this job opportunity

I am working with a company that has defined compensation as W-2 wages with "sign on bonuses" as the only exclusion in their plan documents. In practice, the company has W-2 earnings from several sources that are not being considered for 401k deferrals & match:

- GTL imputed income (all employee have this)

- domestic partner imputed income

- moving reimbursements (reported on W-2)

- equity related W-2 income

- imputed income from taxable fringe benefits

- vehicle allowances

Looks like whoever set-up the 401k failed to list several items that should be excluded.  The plan has been small enough in headcount historically to not require an audit, however, for 2025 this will be considered a large plan and will require an audit for the first time.

Curious to know if anyone has experienced this before and what's the best method for correction.  The obvious first step is to update the plan design to exclude the items above, but wondering if the company is going to have to calculate missed earnings for each employee on each paycheck (along with other items) to make a voluntary correction.  I am envisioning a long painful process just to determine what was supposed to be deferred for every employee.

FYI, the 401k is with Fidelity.

Any advice is appreciated.

View the full text of this job opportunity

One of the requirements for using the net unrealized appreciation (NUA) strategy is that the plan participant take a lump sum distribution. If a participant takes an LSD and does NUA at age 59 1/2 without separating from service, it's never been clear to me whether they can continue in the plan for years after the year the LSD is paid. Any thoughts? If the answer is no, any references where the IRS or a court has said this?

Thanks in advance.

By now, many retirement-services people have learned that an applicability date of an executive agency’s rule that interprets Congress’s statute does not control when the statute applies.

About the recently published catch-up rule, many articles explain that one follows the final rule by 2027, and for 2026 may defend a good-faith interpretation of the statute.

Considering the opportunities and flexibilities the final rule allows, why not follow it for 2026 too?

To do something beyond what the final rule allows, the employer and the plan administrator would need to think about what that something is and be ready to defend how one formed a prudent finding that it is a reasoned interpretation of the statute.

Even if an interpretation need not be formed with an ERISA fiduciary’s prudence, a good-faith interpretation must be formed with at least the ordinary prudence that would be used by a business-prudent employer that is conscientiously seeking to follow tax law. Such an effort might be more expensive than simply following the final rule.

And for a TPA, recordkeeper, or other service provider to maintain a pretense that it did not provide tax or other legal advice, might it be simpler to follow the final rule?

Yet: BenefitsLink neighbors, if time, effort, and money were no constraint, is there anything you’d want to allow in 2026 that the 2027-applicable interpretation doesn’t allow?

What is the ERISA penalty on a failure to furnish requested documents? Still $110 a day? Or inflation-adjusted again?

View the full text of this job opportunity

View the full text of this job opportunity

A CPA that I work with asked me this question.  I don't do 457b plans, but here's what I think is the correct response - figured I'd get the experts here to check me on it.

He picked up a personal tax client who is a participant in government 457b plan.  The person is an attorney who also owns 50% of a law practice.  He is maxing his 457b deferrals ($30,500 in 2025).  The law practice has a 25% Keogh (I didn't realize anyone still had a plan called a "Keogh plan").  Is there any interplay between the contributions that has to be considered?  From what I can see, no; in fact, he could get a max employer allocation under the 457b plan (if allowable by the plan document), and then get his 25% under the Keogh.

Can I get a confirmation or a correction?  Thanks.

View the full text of this job opportunity

I'm curious how much detail EBSA requires on a VFCP application for Lost Earnings?

Whereas we have individual amounts that were calculated by the recordkeeper for each period, the recordkeeper will not provide their actual calculation, ie how they calculated it.

Per application requirements, is it sufficient to just submit the individual lost earnings amounts that were deposited for each late contribution, or do we need more than that?

One-person plan has annuities in his plan.

He has beneficiaries designated for the plan (his children).

However the annuity company is asking for a beneficiary for their records.

I'm unsure, is the Plan the beneficiary, so that the Plan can receive the proceeds and then distribute the assets upon death?

Or do the annuities designate the children specifically since that is who is ultimately getting the proceeds?

How would you address this hypo?

S is in a parent-sub controlled group with 6 subsidiaries: C, D, E, F, & G.

S will sell to B all of S's assets in subs C through F. All of those subs' employees will work for B post-sale. At an uncertain future date, S will sell G's assets to B. At no point will S become part of B's controlled group. 

S participates in a multi-employer DC Plan with Z. They are the only two participating employers. S controls all aspects of the Plan. S owns a small stake in Z, but not enough to bring Z into S's controlled group. S's plan operates on a fiscal year, ending on 9/30. The plan uses a NEC SH. The plan will continue NEC contributions for the upcoming plan year.

If S were to terminate its plan on 10/20, the date of closing, or shortly thereafter would it qualify for the IRC § 410(b)(6)(C) short final year exception for the NEC SH, despite no change in controlled group?

Likewise, S will no longer own any part of Z as of 12/31. Does this change your analysis at all? 

I'm stumped on this because Treas. Reg. § 1.410(b)-2(f) states that an asset sale qualifies under 410(b)(6)(C), however Section 410(b)(6)(C) also states that a change in controlled group must occur for the exception to apply. It just does not make a lot of sense for an asset sale to qualify under 410(b)(6)(C) when asset sales infrequently result in controlled group changes, as the seller remains intact immediately post-closing.

My hunch is that 410(b)(6)(C) does not apply for either the 10/20 asset sale because no change in controlled group will occur, and that the sale of S's interest in Z to Z's other owners does not alter this analysis.

I feel like this is a dumb question. With a new comparability profit-sharing allocation for a safe-harbor 401(k) PSP. Would you still need to test the average benefits test, rate group and gateway for a pro-rata allocation to all eligible participants?

Having a discussion in our office.....

Plan has immediate entry for deferrals and 90 days for match and profit sharing enter 1st of month following.  (MT & PS have no allocation requirements)

I have a participant hired 9/23/2024 and a termination date is 12/20/2024.   Was not employed on 1/1/2025 but received a final payroll on 1/3/2025.  

Would she be entitled to receive the match and profit sharing?

All this time we have been reading and planning for this provision to start 1/1/2026.  However, I saw in the final regs "The final regulations generally will now apply with respect to contributions in taxable years beginning after Dec. 31, 2026." Does this mean that plans do not have to implement this until 1/1/2027? Am I reading this wrong?