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12/31/2023 was first plan year for an owner only 401k Plan.  No 5500-EZ filing needed due to assets under $250k.  In 2024, there's now an employee.  I will be filing a 5500-SF and indicate it's the first year to file.  There will be a 1/1/2024 beginning balance of $50,000.  Will the IRS look at a first year 5500-SF filer with a $50,000 beginning balance and send a notice to the employer wondering why a 5500-SF wasn't filed in 2023? 

Thank you! 

My first missed 9/15 deadline for MRC in well over 20 years. I want to make sure I understand what needs to be done per my research.

Client did not make the MRC by today, around 30k

I checked 5330 and looks like it is section 4971a related. Subject to 10% penalty - not sure when needs to be paid but will instruct as soon as filed.

According to instructions, 5330 is due by 10/15 and no extension was required.

It still needs to be paid by 12/31/2025 and if not then IRS could impose penalty up to 100% for subsequent years.

I have to do interest adjustment based on the date they will make the deposit (if they will)

Am I correct on all above?

In prior year, terminated plan paid out all participants, but apparently there is a remaining forfeiture account that had to do with incorrect contributions to participants (not due to unvested participants).

Recordkeeper/TPA was supposed to use that forfeiture account to pay for closing fees.

Fast forward 9 months later and that forfeiture account is still sitting in the trust, when the intent was to file a final 5500 for that prior year.

Seems like 5500 is to be filed showing zero participants but with a balance, but I just don't know.

We are being told that it is acceptable to reallocate forfeitures on a per capita basis to anyone with an account balance, even if their 415 comp is zero for the current and prior plan years.  Has anyone come across this before?  If so what is the basis for allowing it?  Curious as to why it works.  I have heard this from a big recordkeeper and an ERISA attorney has confirmed it is also doable.

A former spouse of a participant passed away.

The QDRO requires the distribution in this case to be made to the estate.

If the distribution is paid to the estate itself, what are the tax and penalty consequences? Is it the standard 20% Federal Tax withholding and no 10% penalty?

Thanks!

Am I correct in the fact that, if a client  has a DB plan as well as a 401(k) that cover the same participants AND each plan satisfies 401(a) on it's own, the answer is "no"?

The clint thinks if we answer no, this indicates the plan(s) out of compliance, which would not be the case.

The IRS released the unpublished version of the final catch up regulations which should be published in tomorrow's Federal Register.

For 94 pages of reading enjoyment for those who can wait, see here https://public-inspection.federalregister.gov/2025-17865.pdf

The final version should be here tomorrow https://www.federalregister.gov/public-inspection/2025-17865/catch-up-contributions

One interesting right up front is

"Applicability date: These regulations generally apply with respect to contributions
in taxable years beginning after December 31, 2026. However, see
§§1.401(k)-1(f)(5)(iii), 1.414(v)-1(i)(2), and 1.414(v)-2(e)(2) and the Applicability Dates
section later in this preamble for additional details regarding applicability dates."

New plan being set up. The EIN request was submitted and granted with an old address.

Having never been used yet, is it a big deal to just forget the first EIN and get a new one?

Or file form 8822b to correct the address?

A plan sponsor from time to time rehires employees - sometimes several months, sometimes 3 or 4 years after being terminated.  These employees occasionally were participating in their 401(k) plan prior to their termination and are deemed to be participants immediately when rehired in almost all circumstances, according to the plan document.  The sponsor has asked whether it would be possible to force such rehires to meet the eligibility requirements all over again after they are rehired if they were previously terminated at least a year before their rehire date - I'm thinking it's probably impermissible to do this.  They're currently using an FT William doc coded for the basic rule of parity provision, however, the program allows for modifications as an open entry item, i.e., anything at all can be written in to customize this provision, and the question of whether amending the plan to use this open entry item to enforce the one year restriction mentioned above arose.  Is it legal to force requalification for such rehires after being away only one year?   

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A cash balance plan had a fresh start effective 01/01/2023 when it had the Cycle 3 restatement. The owner (a physician) wants to know if s/he could do another fresh start to increase the benefit formula in order to increase the tax-deductible limit.

Can this be done right away or should s/he wait/? if s/he needs to wait, how long?

I have an overfunded DB plan.

Distributions will be made in October.  Two Participants are over 73 and are required to take RMD.

If all participants choose a lump sum distribution, are the excess assets allocated to the PVAB minus the value of the RMD, or are the excess assets allocated to each participant's PVAB?

In the second case, the over 73 participants would receive a larger share of excess assets.

No 5558 was filed for a calendar year plan.

Their corporate taxes were extended and are due 9/15.

I've never had a calendar year plan 5500 due on 9/15 but it would seem like that fits the definition of the Automatic Extension?

Hi

A general question as researching it.

Have you ever switched from a BOY to an EOY val? I am aware of the other way around with automatic approval.

If you have, can you share how managed it, if possible?

Thanks

We have a transaction where a disqualified individual under 280G is getting stock options from the buyer.  These will be granted contingent on the change in control, but they will not begin to vest until a year after the closing, and then only monthly over several years.  

I understand that they are granted contingent on the change in control, but does the fact that they are unvested, and won't even begin to vest for a year, make a difference?

An individual has 100% ownership of two separate companies company A and company B. With having a brother-sister control group. 

My question(s) are:

1. Is it safe to assume this individual can sponsor two individual SIMPLE IRA plans, one for each company and be considered compliant with control group rules?

2. Would it not be acceptable to sponsor a SIMPLE IRA at one and a SEP IRA in the other?

3. Would it not be acceptable to sponsor a SIMPLE IRA at one and a 401(k) PS in the other?

Thank you. 

Imagine the responsible fiduciary of an individual-account retirement plan with participant-directed investment decides to use a set of target-year funds for the plan’s qualified default investment alternative.

Each of those funds describes its investment strategy with this: “The fund invests according to an asset-allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 20yy (the target year).”

How should a fiduciary select the age at which a default-invested participant is assumed to leave the workforce?

60? 62? 65? 67? 70? 73?

Assume the fiduciary does not know when the plan’s participants leave the workforce because almost all people who leave the employer go to work for another employer.

If the fiduciary knows that the plan’s participants all are knowledge workers, does that suggest anything about what leaving-work age the fiduciary ought to assume?

Whatever else a fiduciary might consider, is there some advantage to falling in with a recordkeeper’s norm?

Do recordkeepers have a norm?

Am I imagining a choice a plan’s fiduciary doesn’t practically have because a recordkeeper will require its customer to use the recordkeeper’s regime for sorting default-invested participants?

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