I've been receiving mixed opinions on this topic. Working with a medical practice. The practice is a partnership where the employees are paid. The partners of the practice are each of the doctors' S Corps. The S Corps are adopting employers of the plan. The doctors don't receive any W2 income from the partnership. K1s are issued to each S Corp. In turn, each S Corp issues a W2 and K1 to the owner. The plan administrator is stating that they will consider both the W2 and K1 issued by the S Corps as compensation for retirement plan calculations. I was under the impression that you can only use W2 compensation when looking at a S Corp but apparently the partnership overrides that rule? Thoughts?  

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403b Plan D was at Recordkeeper R about ten years ago.  They had about 20 participants with defaulted loans.  Recordkeeper R is an insurance company, so they treat the loans as loans from the vendor.  The plan converted to a new recordkeeper, but R said that they have to maintain the defaulted loans.  We came into the picture a couple of years later and weren't successful at getting them to change their mind.

Now participants who have these old defaulted loans are looking to take a new loan - they call the new recordkeeper who of course has no information on these old defaulted loans and are told that they can certainly take a loan.  Then all sorts of headaches ensue.

Let's say that repaying the defaulted loans with accrued interest is not an option - almost all of them are for workers just above minimum wage.  They're basically taking a loan to get access to the profit sharing while still employed.  The plan currently doesn't allow age 59.5 ISW, but most are under that age anyway.

Can we amend the plan to allow for a second loan ONLY to participants who have a defaulted loan at Recordkeeper R?  There are no HCEs in that situation, so from a purely mathematical standpoint, it should be fine.

Note that this is not what I'm suggesting they do.  I'm just looking for options... and will gladly take any others.

Thanks!

Hi! I have a PBGC covered plan where the owner took an impermissible withdrawal of $250k from the plan in June 2025. To correct, he returned the funds to the plan in February 2026 but with no earnings adjustment. Are earnings required? He wants to self correct and include a memo in the plan's files.

I've been finding contradictory info about whether or not such a notice is needed in my situation.  An employee's date of entry was 1/1/26, but he was not informed that he could start deferring at that time.  The employee has yet to complain to the employer about this - it was the employer who caught this error.  The employee will be permitted to begin deferring with the first payroll period ending after 4/1/26.  This should suffice for reducing the QNEC for the MDO to 0%.  The plan does not have any autoenrollment features.  Some sources say an MDO notice is still needed, some say it is not.  I'm leaning more to the 'not needed' side, especially since the employee has not brought up the discrepancy - is this the way to go?  Any help is appreciated.

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401(k) plan acquired in a stock acquisition in mid-2025 is merging into Buyer's 401(k) plan in August.  Without 410(b)(6) transition relief, how is this tested for coverage and nondiscrimination?  The merging plan would not have a short plan year, so are the plans simply aggregated for the 2026 plan year for testing purposes?       

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We administer a calendar year 20 participant 401(k) plan with salary deferral, match and profit sharing.

They failed the ADP/ACP test for 2025 so refunds will need to be done this week to HCEs. We spoke to them about making safe harbor contributions, QNEC etc. but they just want to go ahead with refunds. And the refunds are not so bad (around few thousand for each of the three HCEs).

In this case they have a discretionary match.

Question: they have a discretionary match and have been happy doing it that way. Also, they usually fund the match around early May when they fund profit sharing contributions (corporation goes on extension). How do we correct discretionary match contributions when they will not be funded until early May? 

So suppose we have the following:  a discretionary match of $40,000 will be funded for the 2025 year. Suppose the 3 HCEs would each be entitled to a $5,000 match and match contributions of $700 each would need to be forfeited to pass the test. I would think these forfeitures would need to happen for the 2025 year but would not be available to use until the 2026 year (plan uses forfeitures to reduce subsequent year contributions). I don't think we could just have them fund $37,900 ($40,000 - $2,100) for the 2025 year. So I would think we would show full match contributions on the 2025 benefit statements for the three HCEs. Then in 2026 show $700 each being forfeited from their match accounts.

Does anyone agree / disagree?

Thanks.

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I've been tasked with a 401(k) plan whose profit sharing contribution allocations are integrated with the SSTWB - a first for me.  I realize that this PS allocation method is a type of safe harbor design, though probably not like the popular SHNEC and SHMAC 401(k) designs.  Do you have to do 401a4 testing like when there are new comparability PS contributions in a SH 401(k) plan, or is that not needed because of the integrated design? Any pitfalls to look out for? 

Plan has never ever had an employer contribution.  Only 401(k).

Changing pay definition would only affect test results.

Revisiting 2024 (2 plan years ago).

Reason for thinking about it - Changing Definition of Comp might benefit the 2025 ADP Test based on Prior Year ADP.

Is there anyone out there who has Plan Sponsors that have "deemed Section 125 compensation"?  And if so, how do you know about it and where is it reported in the payroll records, assuming it is?

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