A lot of 403(b) plans are governmental. Previously, they could have a discretionary match with almost no restrictions on who, when, how much, etc., since there isn't any nondiscrimination testing.

Now that it is more restrictive, for a governmental plan, is there anything wrong with using the nonelective contribution, with everyone in their own group, and "coincidentally" the only people who get a nonelective are those who deferred? Smells funny, but would be easy to do...

Per the obvious citation, when amendment of vesting schedules occurs, the emendations must allow for the apt extant participants to retain the vesting schedule as if unaffected by the amendment, at least perhaps for balances already accrued. The salient participants entail the participants who had provided suitable amounts of service, the excerpt herein lacks adjustment for subsequent amendments reducing the anticipated service favorably for the participants. 

URL https://www.ecfr.gov/current/title-26/part-1/section-1.411(a)-8#p-1.411(a)-8(b)(3)

Citation 26 CFR 1.411(a)-8(b)(3)

(b) Election of former schedule —

(1) In general.  Under section 411 (a)(10)(B), for plan years for which section 411 applies, if the vesting schedule of a plan is amended, the plan will not be treated as meeting the minimum vesting standards of section 411 (a)(2) unless the plan as amended, provides that each participant whose nonforfeitable percentage of his accrued benefit derived from employer contributions is determined under such schedule, and who has completed at least 5 years of service with the employer, may elect, during the election period, to have the nonforfeitable percentage of his accrued benefit derived from employer contributions determined without regard to such amendment. Notwithstanding the preceding sentence, no election need be provided for any participant whose nonforfeitable percentage under the plan, as amended, at any time cannot be less than such percentage determined without regard to such amendment.

(3) Service requirement.  For purposes of subparagraph (1) of this paragraph, a participant shall be considered to have completed 5 years of service if such participant has completed 5 years of service, whether or not consecutive, without regard to the exceptions of section 411(a)(4) prior to the expiration of the election period described in subparagraph (2) of this paragraph. For the meaning of the term “year of service”, see regulations prescribed by the Secretary of Labor under 29 CFR Part 2530, relating to minimum standards for employee pension benefit plans.

https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-D/part-2530

Seemingly periods of service remain barred for this situation. To describe the garbled jargon, while 29 CFR Part 2530 features the term "period of service", the illocution/intent therein seems inconsistent with the use of said term to indicate the reckoning of service lacking logging of provided hours, rather as long as the employment relationship remains intact, service accrues. This situation has disadvantages to individuals who provide 1K hours to the endorsing entity during a plan year while departing prior to the conclusion of the plan year.

URL https://www.ecfr.gov/current/title-26/part-1/section-1.410(a)-7#p-1.410(a)-7(a) 

Citation 26 CFR 1.410(a)-7(a)

Employer sponsors a QACA with discretionary match.

There will be some layoffs at the end of the month. The layoffs will NOT result in a partial termination.

Client wants to vest this group 100% regardless of their current vesting %.

Question:  Can the plan draft an amendment that will allow the participants in this layoff group to vest 100%?

Thanks

A client has been paying out employee deferrals from a NQDC Plan and reporting them on Form 1099 for years.

The client will correct this going forward and start reporting on W-2.  However, do we need to go back an correct for previous years when they used 1099?  If so, how far back do we need to go?

Unfortunately, I don't know at this time if FICA was ever accounted for.

Plan Type:  403(b)(9) Non-electing Church Plan

Background: Participant (under age 59.5) contacted the plan in May 2025 because his tax professional told him he did not have enough includible compensation to support the amount of Designated Roth 403(b) deferrals he made in 2024. For purposes of my question, he only made Roth deferrals to the plan and these excess deferrals totaled $5000, and there were $100 in earnings on that excess.

Questions: Since the distribution will occur after April 15, 2025, there is some confusion as to how it is to be reported on the 2025 1099R. IRC § 402A(d)(3) seems to instruct the payer to tax the participant on the full distribution, not just the earnings portion, when distributed after April 15 (which seems counter intuitive).

IRC § 402A(d)(3) states the following:
(3) Treatment of distributions of certain excess deferrals
Notwithstanding section 72, if any excess deferral under section 402(g)(2) attributable to a designated Roth contribution is not distributed on or before the 1st April 15 following the close of the taxable year in which such excess deferral is made, the amount of such excess deferral shall—
(A) not be treated as investment in the contract, and
(B) be included in gross income for the taxable year in which such excess is distributed.

Q1: Referring to the highlighted text, does this mean that the 1099R should be written as follows:

Box 1: $5100

Box 2a: $5100

Box 5: (blank)

Box 7:  1, 8  (assuming no known exception to early distribution)

Q2: Does withholding apply to this distribution? (I think not)

As always, thanks in advance for your responses!

for TH minimum benefit in DBPP:

year of service and avg compensation should be calculated starting from the year of participation right? or both should be counted from year of hire? try to find it on § 1.416-1 but it doesn't show the definition. thanks!

In a US Tax court case re ESOP disqualification the government filed its certification of the admin file. My question is how long does petitioner have to file an objection (if any) and file a motion to supplement record? 

I don't really understand the intricacies of "private equity platforms." 

Let's use the following description as an example.

Acme Capital Partners manages a middle-market private equity platform. The team has invested capital in a broad spectrum of industries for over two decades.

So, if Acme buys a company or companies, wouldn't this constitute a parent-subsidiary controlled group? Or, do they not actually OWN one or more companies, but just provide capital? Or maybe both? 

A plumbing & construction company currently has a plan.  They have set up another service company (same owners) with a different TIN.  Can the new company simply adopt the current plan, or do they need to set up their own plan since they have a different TIN?  Thanks for any help.

Any guidance will be appreciated w/re how a bank's RIA should respond when it is an investment manager to an ERISA plan and is asked at a participant's meeting (but asked privately) by a participant to review an individual's entire asset portfolio and provide financial advice and planning. The retirement account is, of course, a part of the individual's asset portfolio, but may also include brokerage accounts and non-IRA assets.

Can the investment advisor who provides training at the participant's meeting provide contact information to the individual and potentially take the person on as an individual client? 

If the investment advisor provides general contact information for the bank and is contacted by a participant in a plan to which the bank is a fiduciary for individual financial guidance, including the retirement assets, is that a conflict in interest? 

It seems as though that will be a conflict of interest.

Thank you!

I'm getting conflicting info on how discretionary the Enhanced Catch-ups for those age 60-83 is.

The Catch-up provision is already a discretionary provision in 401(k) and 403(b) plans.

And I understand the new enhanced catch-up rules (super catch-up?) are discretionary too.  But to what extent?

Can a plan have "regular" catch-ups but not the enhanced c/u?

Does the plan sponsor have discretion on both c/u's or just the regular one?

A 50-employee medical clinic is owned by four doctors' individual PAs. Each doctor's PA owns 25% of a medical clinic - the partnership. The medical clinic's 401(k) plan is funded by the partnership. Three of the four partners actively participate in the medical clinic's 401(k) plan, though as the doctors are not employees of the medical clinic, their individual benefits under the 401(k) plan are funded by their PAs. The fourth partner is new and wants to sponsor a solo 401(k) with the 1099 income he receives from the partnership rather than participating in the medical clinic's 401(k) plan.

In this scenario, is there anything wrong with the new doctor sponsoring a solo 401(k) rather than participating in the clinic's plan? Would it matter if two of the four partners wanted to sponsor solo plans?

We only administer a couple of non-governmental 457(b) Plans so i am far from an expert.

in one of them a participant will be terminating soon and will be taking a lump sum withdrawal.

Since the distribution is reflected on the company W2 should the funds be transferred to the company checking account and then run through payroll

OR

is it ok that the funds go directly to the participant and then the company just adjusts that person's W2  at the end of the year

thanks

I read in this week’s Pensions & Investments magazine that at least one recordkeeper “calculates Secure 2.0 tax credits for new plan sponsor clients, giving them worksheets that they can give to their CPAs to make sure they take advantage of the tax credits[.]”

TPAs, of recordkeepers you work with, is this a common service?

TPAs, do you offer this service? Routinely, or when asked? Within a base fee, or for an incremental fee?

What are the advantages and disadvantages of this service?

What amount is $4,000,000,000,000 if a writer uses only the “4” and replaces the many zeroes with one word?

My employer is stating that since I am enrolled in the company 401k program with a company 3% match, that they do not have to give me any of the $14.00 an hour pension fringe benefit when working on prevailing wage jobs. The only way they will give me that $14 hour is if I defer to enroll in the 401k program then they will add that amount on to my paychecks. Example- my coworker deferred to enroll in the 401k program and is paid $44 an hour on prevailing wage jobs but has no money contributed to a retirement account, whereas I am enrolled in the 401k program so I am paid $30 an hour on the same job, then 3% of my check goes into my retirement account and my employer matches that. Is this the correct way that this works? They do not have to give me any of the pension fringe benefit if they are doing a company match?

I’ve done some googling and ChatGPT and seem to get conflicting information.

My situation is I am a business owner with a self-administered Safe Harbor 401k. There are (were) two participants, myself and a full time employee.  My employee has resigned and I’ve hired a part time employee, who will work less than 1000 hours per year, and I may hire a second (similar) part time employee.

My current Safe Harbor 401k states that employees with a year of service and working over 1000 hours per year qualifies for the plan.  
 

Can I maintain my current plan with a single participant (myself) or do I need to convert to a Solo 401k plan.

i prefer to maintain my current plan, if possible, even though I understand the benefits of Solo.  If I can’t maintain this, is Solo even an option, as it is unclear if even part time employees may disqualify me.

thanks!

Sponsor maintains 401k and 403b.  All employees in controlled group are employed by nonprofits.  Sponsor wants to terminate 401k and force nonresponsive participants to direct rollover to 403b.  Or alternatively to force direct rollover to safe harbor IRA.  Is force out available at all here?  1.411(a)-11(e) says no force out if another defined contribution plan in controlled group other than ESOP.  Is 403b plan considered another defined contribution plan for this purpose?  414 definition suggests yes?  It seems like a catch 22 - can’t force to IRA and can’t transfer to 403b as that isn’t allowed.  Maybe the 403b is not a defined contribution plan and so we can force out to an IRA?  But I can find no path  or support to forcing a direct rollover to the 403b.  Maybe a “transfer” where 411d6 is honored, but again - can’t transfer 401k to 403b.  Help…

I know this board is probably tired of After tax/mega backdoor roth questions....but here I go.

I'm an advisor who only does 401k/403b/Cash Balance plan advising.  We pride ourselves on our ERISA knowledge and everyone on my team has the QKA at least, but a client has come to us with questions that I wasnt sure of.  The TPA was on the call and they are researching but I thought Id ask this group as well.

The client is a young business owner (~10 employees)who loves after-tax/MBDR strategies. We have shown him numerous profit sharing plan designs, discussed the issues with after tax contributions for a company his size, etc.  His question as we reviewed profit sharing is what if instead of profit sharing he does $35k in after tax contributions to get to $70k.  Then can he simply do the $80k in profit sharing were showing due to employees as employer after-tax contributions?  Everything I read says after tax is subject to ACP, and the only remedy for after-tax is the owner removing their contributions, but could he instead of that just do very large after tax contributions to his employees like a QMAC remedy?

There are a ton questions I have that come out from this - who pays the tax, would this money have to be considered fully vested, etc. 

Assisting a sponsor that discovered that the 415 limits were tested before the final true up. The participants are due additional safe harbor match, that will cause more excess that needs to be distributed. Participants that are affected should have had after-tax refunded but have since rolled over account balances to new employers plans.

Would depositing the true up and processing the excess from the additional allocation be permitted since that is all that remains in the plan?

The only other solution is to issue the letter that they have to take the excess out of the current plan and then let them know they have additional that can be rolled over, which does not sound correct. Anyone run into this situation?

The 415 excess must be corrected, but the regs only address the order not necessarily what to do if the other sources have been distributed.