We are terminating a PBGC covered plan and the distribution deadline is approaching. One participant cannot obtain spousal consent for the lump sum distribution because his wife refuses to sign the consent form so we will have to purchase an annuity. I've never needed to purchase an annuity for 1 person. The companies that we work with on annuity purchases have limits and he has a very small benefit. Any ideas?

Has anyone dealt with a child support order or judgment directed to a 401(k) plan?

The participant reportedly owes approximately $90,000 but currently has only about $1,500 in safe harbor contributions in the plan. The plan’s financial advisor has indicated that the order must be honored. Is that correct?

• Must the order satisfy the requirements of a QDRO before any plan assets can be paid?

• Can the plan be required to make an immediate payment if the participant does not otherwise have a distributable event?

• Could the order apply to future contributions, or only to the participant’s current account balance?

• Are there any particular procedures or notices the plan administrator should follow upon receiving this type of order?

Any input or experience with a similar situation would be greatly appreciated.  Thanks!

If I understand correctly, an existing plan established prior to SECURE 2.0 that moves to a PEP, and in the process terminates its original plan, still gets to grandfather in not requiring auto enrollment, assuming the PEP allows some plans to carry forward this grandfathered arrangement.

On the same topic of auto enrollment and PEPs, a new small plan that would normally get a waiver from auto enrollment can still get that waiver in the PEP, again assuming the PEP allows for such flexibility.

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I just want to make sure I'm understanding this right, as I just help out with certain clients.

We have a client that froze it's Cash Balance Plan as of January 1, 2025.  So, the facts (I believe):

1) The Normal Cost for the year is $0
2) The Amortization Schedule is negative
3) The assets are slightly greater than the Funding Target

Under this scenario, is it accurate that no contributions are owed for either plan (the Profit Sharing becomes discretionary I believe)?

Thanks in advance!

I never get this right.

Partic termed 12/27/2025.  Got commission check 2/12/2026.

Plan includes post severance.

So do I include the comp in '25 or '26?

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Client has already deposited the 4% Safe Harbor Match. The next tier is a 6% Discretionary Match. Client only wants to deposit $20,000 of the $29,000+. Can he do that? If yes, can he just allocate by a set percentage or by salary amounts, which would be discriminatory very much in his favor.

Thank you in advance for your help.

Dpsrich

It is my understanding that residents (not citizens) of U.S. territories would not be excluded as nonresident aliens, but that nonresidents aliens of the U.S. territory would not have U.S. source income and therefore would be excluded.   Am I correct in that understanding? 

Thank you for any guidance

Have been reading and researching on this and getting very confused and losing my mind. Hopefully some has an insight.

Never did this before and need to (CB plan - PBGC covered, top heavy and NOT underfunded). My system does not to prior benefit structure testing so need to do all manually (confirmed with the vendor).

Plan effective 1/1/2021 and combined with a DC plan.

Plan is hard frozen early 2025 with no one accruing a benefit (except one owner getting AE increase as past NRA). I do not see any relief under SECURE 2.0 for this.

I did the prior benefit structure testing and failed by 1 so need to 11-g.

The confusion (or not understanding) I am having is that the 11-g is for a current year increase so how do I include this person into a testing that is performed at beginning of year? This person will have 1 additional year of accrual/participation versus others.

I am sure I am not making sense here or totally missing something.

Thank you for your time and any insight you can provide.

Hi all

Does anyone have a good write up on how to perform 401a26 prior benefit structure testing and how to perform it especially with some examples?

Doing some research getting some conflicting information.

Basically, have a hard frozen plan in 2025 (early in 2025 so no accrual) but the plan is overfunded so subject to 401a26 - this is confirmed.

Also, terminated the same plan in mid-2026 and again need to test it for 401a26. From what I understand, I can pick the termination date of 7/31/2026 as spot check date for 401a26, correct?

This is the first time I have to deal with it.

Thank you

Hi, 

I know this has been posted a few times over the years but our actuary is questioning the reasoning. 

We have an LLC that is taxed as an S-corp.  The owner only has one employee, her mother.  Based on several discussions, I thought they would file an EZ.  However, our actuary disagrees and based on 29 CFR §2510.3-3 says that it is should be an SF.  The 2025 Form 5500 filed for the 401(k) plan by a big box TPA filed as SF.  

What say you?  Does it matter that it's an LLC taxed as an S-corp - does it actually have to be an S corp? 

I used these prior discussions to build my case:

 

 

Solo 401(k)Plan - 401(k) Plans - BenefitsLink Message Boards

2% Sharholder of S-corp: attribution included for 5500-EZ - Form 5500 - BenefitsLink Message Boards

 

thanks!  Hope you are all having a nice long weekend.  

For those TPA firms that only use the services of an enrolled actuary for doing the actuarial valuation, SB and PBGC if required, but your firm is responsible for the compliance testing, what software do you use?  Is there any standalone testing software that you have found to work, or do you primarily do the testing in some variations of excel?  

Thanks!

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Hi

Having a brain freeze for a change.

DC/CB combo. Both plans are top heavy, separately and combined as well.

CB is hard frozen i.e. no one gets an accrual. There are quite a few participants excluded from the CB plan categorically.

DC document says, top heavy is satisfied by DC plan but no % is provided.

In addition to the 3% NESH already being provided under the DC plan, do I need it to provide another 2% PS allocation at all, especially for the participants who are excluded from participating in the CB?

The only allocation to the key employees is the 3% NESH.

There is no gateway requirement.

Thank you

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