Question:

For the purpose of calculating the top heavy balances, are adp/acp corrective distributions added back in? 

Plan failed 2024 ADP/ACP testing:  HCE/Key employees adp/acp corrective distributions of $5,000.  These were corrected on 3/1/2025.  When looking to add back in "In-Service" distributions, would these be considered that for top heavy balance for the 2025 determination?  Or excluded from the Top Heavy balance. 

My argument is that these distributions were forced distributions because of the failing ADP/ACP test.  The participant did not have the option not to take it, so why should it be added back in?

Thoughts?

My new client received a certified letter from a former employee requesting a copy of the SPD from the years in which she was employed (not necessarily a participant), 1997-2003.  Since I was not the TPA I don't have the SPD and my client doesn't think he has it either.  She was paid a benefit of about $50K in 2005 and apparently is not disputing that.  Is my client obligated to provide the old SPD from 23 years ago to the former participant?

Client is doing a discretionary match of :  Since it relates back to service it can not be used as a safe harbor match

100% of deferrals up to 6% of comp up to 5 years of service - then 150% of deferrals up to 6% of comp if over 5 years of service

How the Formula Works (Example: $50,000 Salary)

• Years 1-5:
  • You contribute 6% of $50,000 = $3,000.
  • Employer matches 100% of your contribution up to 6% = $3,000 match.
  • Total contribution: $6,000 ($3,000 your money + $3,000 employer).
• After Year 5:
  • You contribute 6% of $50,000 = $3,000.
  • Employer matches 150% of your contribution up to 6% = $4,500 match.
  • Total contribution: $7,500 ($3,000 your money + $4,500 employer). 

Can they do a Enhanced SH match of 100% of deferrals up to 6% of comp

and then a discretionary match of 100% of deferrals up to 3% of comp if you have been then at least 5 years

In other words - 1-5 years 0% match ; 5 years or more 3% match

Would that need to be tested alone (ACP) without the safe harbor match?

Would ADP test pass automatically since there is a safe harbor match?

A participant is over age 73 and has an RMD for 2025. He terminated before NRA and because of that, he is not 100% vested. Is the RMD amount calculated based on full account balance or vested account balance?

Thanks.

I have a Township who currently offers a 401a plan to it's full time employees.  They want to create a plan that offers match, but only for the part time employees - excluding the individuals who are eligible for the 401a plan.  I apologize for my ignorance, but we don't do a ton of these.  I think they can do this...but I would love some confirmation.  

Any guidance or alternative thoughts on this would be very much appreciated.

Thanks!

I'm hearing different things from TPA's regarding whether or not they are making a Student Loan Matching Certification Form available to participants.  Has anyone seen TPA's putting anything together?  I'm also surprised I haven't seen anything from document providers?

View the full text of this job opportunity

View the full text of this job opportunity

A plan has a 100% match on the first 6% of comp.  If I recall correctly, a formula can be considered safe harbor if you contribute a match only based on the first 6% of comp, but only if that amount is less than 100% of the first 4% of comp.  That would make this match on the first 4% of comp safe harbor, and the match on the next 2% a fixed non-SH match.  Since there's a portion that's non-SH, the plan would be subject to ADP and ACP testing - do I have all of this correct?  Would the ACP testing be done using the entire match or only the non-SH portion, i.e., the amount based on the 4% - 6% of comp? Thanks in advance for any assistance. 

A plan came on with us earlier this year, this is our first time doing testing for them. Owner wants a projection of what it'd look like to max out profit sharing with new comp (they've never done profit sharing before). Right now their plan doc has 3 month wait, no hours or age requirement, and monthly entry for all sources, including safe harbor. Owner has two kids, 12 and 14, which get a small paycheck, defer some, and get safe harbor money. This causes some wild numbers in 401(a)(4) testing because of their age; the $330 of safe harbor received by one kid means I'd need to get 5 NHCEs up to ~27 EBAR. Essentially, there's no way to max out the owner without giving wild contributions to everyone else because of those two kids.

Our plan is to amend their document for next year to either have an age requirement or exclude HCEs from the safe harbor contribution, along with some allocation conditions and other small provision changes to make this much smoother next year. That said, is there anything at all we can do for this year to make this spread better? I've seen conflicting information about the use of statutory exclusions for 401(a) rate group testing & struggling a bit to wrap my head around if there's any way we can make this work. Any input would be much appreciated!

Can someone point me to annual participant notice requirements for 457(b) and 457(f) requirements?

Thank you. 

Our firm has a lot of owner only so we tend to have alot of mega Roth conversions.  I can't seem to find a definitive answer on what the limit is when the plan is ONLY doing after tax -> Roth.  I've read alot of places that if you are 50 and over, then the limit is $77,500 for 2025 but the examples always include deferrals/Roth.  What about when it's solely after tax?  I read an AI response that said if it's only after tax, then the limit is just $70,000 because after tax is not subject to 402(g):  

• Elective deferrals = pre-tax 401(k) deferrals + Roth 401(k) deferrals (salary-reduction contributions subject to the 402(g) limit).

• After-tax (non-Roth) contributions = a different bucket under §415(c), not subject to 402(g), and not elective deferrals.

Thanks!

View the full text of this job opportunity

A 401(k) participant requested a hardship under 1.401(k)-1(d)(3)(ii)(B)(6), relating to the "repair" of the participant's principal residence, for costs associated with the removal of a tree that posed a danger of falling on the participant's residence (but had not actually fallen yet).  From a practical, policy perspective, I understand that it makes sense for the participant to take the tree down before it actually falls on the house.  However, I don't think this would qualify as a casualty loss under 165, and therefore wouldn't qualify as a "repair" eligible for hardship.  (See, e.g., Rev. Rul. 76-134.)  Do you all agree?  Other thoughts?

(As an aside, I realize that SECURE 2.0 permits self-certification, but in this case the participant volunteered the information, so the plan sponsor has actual knowledge.)

Is there a particular advantage to signing a new Cash Balance Plan for the current plan year by end of the plan year, typically 12/31. 

Or is it just as well to wait until prior to the tax filing deadline of the next year and signing retroactively?

Found a r/k who posts deferral transactions before the check date.  Basically, they process the contribution file when it comes in.

For example, they processed the 5/9/25 payroll on 5/8.

I didn't think they could/should do that, but they said it was ok.

Do you agree?

To help customers apply § 414(v)(7)’s constraint that a higher-wage participant’s age-based catch-up deferral must be Roth contributions, recordkeepers are asking an employer to deliver—in January, following W-2 files—a computer file that shows, yes-or-no or on-or-off, whether a participant had in the preceding year Social Security wages more than $150,000.

Everything I’ve heard so far suggests this is the mainstream method recordkeepers are doing.

Is there any big recordkeeper not doing this?

View the full text of this job opportunity

View the full text of this job opportunity

Situation: H had an IRA. H died. W survived. She did not rename the IRA into her name as owner. She did not take any MRDs, even for those years she had reached and passed her RBD. W dies. The IRA balance is moved into an "estate account." Then, W dies. Her executor has  the funds in the IRA moved to an "estate account" and then, 1/5th each transferred to five new "inherited IRAs", one each for the five children.

How do we resolve the failure by W to take MRDs?

Were the funds taxable when transferred from the IRA to the estate account (since estates per se cannot be IRA owners)?