The SECURE 2.0 final regs provide Plans are not required to add Roth provisions to continue Catch-up contributions in 2026; they also provide a "safe harbor" provision that can be added to the SECURE 2.0 Amendment for Plans that do not offer Roth contributions, to avoid tripping over the Universal Availability requirements (similarly situated employees for Catch-Ups) where the Plan Sponsor is Self-Employed (or Partners) and does (or could?) have a Non-Highly Compensated Employee (50+) who is a High Paid Individual ("HPI") for purposes of the 2026 Roth Catch-up rules. To avoid discrimination, the Plan can essentially "prohibit any HCE with any "compensation" in excess of the HPI FICA threshold from contributing Catch-up contributions in the following year. In doing so, you avoid the discrimination issue.

My questions are:

1. Can this "safe harbor" provision state it is only effective for the Plan Years in which there exists a Non-Highly Compensated Employee (50+) who is an HPI? If so, can the HCE owner therefore contribute pre-tax Catch-up?
2. Can or must an S-Corp Plan Sponsor incorporate a similar "safe harbor" due to the nature of S-Corp "control" over W-2 wages (albeit they should be reasonable) and dividends?
3. Can the spouse of the S-Corp owner continue to make pre-tax catch-up when prior year W-2 is less the HPI FICA threshold?  It seems to me they can since income is not "attributed" (therefore no effect on whether or not they are an HPI).

Thank you.

The only NHCE requirement found in 45E seems to be in the definition of Qualifying Expenses for the admin expense credit.  If thre is not at least one NHCE in the plan, then the start-up costs are not "Qualifying."  That requirement seems not to apply to the 45E(f) credit for employer contributions.  So assuming these examples set up a plan and otherwise qualify (i.e., no plan in prior 3 years) are the following statements correct?

1) A sole propritership or partnership with no employees should be eligible for the credit regardless of what their earned income is because they have no FICA wages; and

2) An S-Corp with no employees that pays the owner 104,000 in 2025 (less than the threshold in 2025) should be eligible for the credit as well.

Oddly I can't find any articles clarifying that the employer contriubtion credit has an "at least 1 NHCE" requirement.  Of course none indicates that there IS such a requirement either...

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When a plan in merges into a PEP, as we know, it needs to  be shut down with a final year compliance testing and 5500 filing. 

It has become more common where as soon as the current TPA is notified of the intent to merge into the PEP, they stop their service and fail to complete the final testing and 5500 filing.

What recourse does the client have to ensure the current TPA completes the shut down, especially since the fees have been paid for that service ?

Besides the new TPA completing the final work, are other solutions available ?

Thanks for your time.

If a plan has the Rate of Return pegged to something like the S&P500, and the S&P goes down 20% in 2025, but then goes up 10% in 2026 , what happens to participant hypothetical accounts?  For example, if someone's hypothetical account was $10,000 on 1/1/2025, it stays at $10,000 through 12/31/2025 because the benefit can never go down.  My big question is will there account still be at $10,000 at 12/31/2026, because the 10% return in 2026 was not enough to make up for the losses in 2025? i.e., is it a cumulative tracking?  Or is the ROR always just pegged to the ROR specified in the doc for that year, with all prior returns (or losses) ignored? 

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Hi,

A PBGC covered plan received the following email from the pbgc...

This letter is to inform you that the Pension Benefit Guaranty Corporation (“PBGC”) was notified that a Reportable Event has happened.  According to the information we have received, "A" Corporation (the “Plan Sponsor”) has failed to make the required minimum contributions

1. Who are they referring to when they say they were notified? Who could have notified them?

2. The minimum required contributions that they are refering to are the possible  MRC that would be shown on the 5500 (that were not filed for a few  years) or are they referring to the pbgc annual.premiums that have not been paid?    Thank you as always for any insights. 

A client whose plan is terminating needs to locate the beneficiaries of two deceased participants.  One participant has a beneficiary designation on file; the other does not.  The employer is located in Pennsylvania.

Any recommendations for a commercial locator service?

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I apologize if this type of question has been answered previously, i could not locate it.

Is it best practice to carryforward Beneficiary data from a prior plan during a Plan Merger or Plan Takeover client, or to require all participants to re-enter their Bens in their new account?

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

This is been a problem for a long time and I haven't asked this question in a while: 

What is the easiest way to find old terminated employees to try and pay them out? 

Thank you.

Hello.

Participant is looking to take a loan to purchase a primary residence.    He is purchasing a house.  However, he is not planning on moving in right away, as he has a lot of repairs to do. 

Is there a time frame to consider this his primary residence?   

Thanks!

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I realize versions of the question have been asked, but I cannot find a specific clear answer. In fact, I have received differing opinions on it from my normal go-tos.

There are four business in question. We are looking at various retirement plan options available. Owners are spread between a married Father and Mother, their Son (over age 21), and the Son’s Wife.  There is no trust involvement, nor is there any buy-sell agreements or options agreements across these businesses.

Here is the ownership structure:

“A”

Father, 1/3

Mother, 1/3

Son, 1/3

“B”

Father, 1/2

Mother, 1/2

“C”

Father, 1/2

Mother, 1/2

“D”

Son, 99%

Son’s Wife, 1%

A, B, and C have several employees. D is a separate business that does not have employees (owner only).  All of my normal resources agree there is no issue with an Affiliated Service Group, leaving the only questions one of ownership control group.

Here is my take:

1. The son would not be attributed ownership of either parent for any of the other companies, as he has less than 50% ownership in A.
2. If 1 is true, a SEP should be allowed in D, with a separate 415 limit available.
3. B and C are certainly a control group.
4. Father and Mother would be attributed each other’s ownership, placing them above the 50% threshold in A to also then require they be attributed the son’s 1/3^rd share, placing the mother and father at 100% effective ownership, making A, B, and C all a combined Control Group, but still leaving D separate.

One TPA has said that #4 is wrong, and that A is not brought into the CG. Other's in my sphere agree with my read as above.

For now, the A/B/C question is moot as we will open the same Plan across each of these anyway. But it matters for future potential changes, as well as needing to know if we are clear to do the SEP in D for the son.

Thanks in advance.

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Is this possible?  Another work around we thought of is to exclude HCE's from the safe harbor match and benefit them with a discretionary match.  It seems like just limiting compensation would be easier.

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/advisory-opinions/2025-03a

Do people agree that if a plan is designed as a top-hat plan specifically, the concerns outlined here are not applicable? The Morgan Stanley plan does not sound like a plan exclusively for HCEs and management.  Sounds like a plan offered widely to all advisors.  I assume that is the issue.  And I further assume that because the benefits are paid when vested there is no deferral of income anyway which eliminates concerns about "funding." 

Do I have this about right?