I found out yesterday the sale of my client's business is set to close escrow on September 30.  They sponsor a 401k/PS plan with safe-harbor matching contributions.  I am not privy to all of the details but here is what I do know:

1.  Sale of the business is set to close on 9/30/26.

2. The sellers have not notified their employees of the pending sale.

3.  The buyer sponsors a 401k plan with basic match only (no non-elective contribution).  They do not wish to merge the sellers plan with theirs.

4.  Assuming escrow will close on 9/30, all employees (approximately 40) will terminate employment and be given the option to work for the buyer's company.  I do not know how much notice they will give them.  I "assume" they will be given the option to roll their benefits to the new company's plan.

5.  The sellers do not wish to apply for IRS approval of the plan termination.  We use CalcAire's pre-approved documents.

6. The sellers wish to establish a termination date to coincide with the closing of escrow.   I don't think they can do this based on notice timing requirements.

What is the earliest date they can terminate the plan after close of escrow?  Is the 60 day notice of intent to terminate still applicable under these circumstances?  I recall reading 15 day notice is only required for DC plans but I am unable to cite where I read this.  I will take all necessary steps to terminate the plan per IRS guidelines.  I'm just not sure when to proceed since they do not know when escrow will close and there is the off chance the sale will fall through.  

Based on the limited amount of information I have available, how do some of you think this should play out?  

Thank you in advance.

I should know this, but not today for some reason.  If I recall, an amount distributed from an In-Plan Roth account (that was converted within the plan from a pre-tax deferral account) can be withdrawn on a tax-free basis if the Roth account was established at least 5 years ago, regardless of whether or not some of the distributed money sat in the account that long (and, of course, if the participant is at least 59.5 years old). 

Also, if the participant dies before a distribution can be made, their beneficiary can be paid the Roth amount on a tax-free basis, with the same choices in payout methods as a pre-tax deferral account, unless the doc specifies different methods by source.

Do I have both statements right?  All help is appreciated.  

It has been a hot minute since I have been involved with compliance testing, but I am pretty sure I remember that there is a distinct order to the compliance tests. Lets assume we have a 401(k) plan with deferrals, match and after-tax contributions. There are participants who exceeded the 415 limit due to after-tax contributions.

It has always been my understanding that the excess annual additions are corrected first and not included in the ADP/ACP Test. The issue here is that the service provided is stating that they do not need to do 415 excess corrections because those get refunded by application of the ACP Test, but in this case we are doing EPCRS corrections with a one-to-one QNEC and including the excess annual additions in that test inflate the QNEC.

Just confirming I have no lost my testing marbles and if you have a reference that would be great (was there pre 2009).

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Today, a client sent me a package of what its recordkeeper labels “your SECURE 2.0 Act Interim Amendment.” The package describes this as “changes from your Cycle 3 qualified retirement plan.”

BenefitsLink neighbors, I’d welcome your help so I learn some contours about a plan sponsor’s uses of documents of this kind.

Am I right in guessing that an interim amendment does not get an IRS imprimatur like the IRS opinion letter that results from an on-cycle review of IRS-preapproved documents?

Am I right in guessing that an interim amendment—even if the documents’ designer built it from the IRS’s Listing of Required Modifications—does not get any IRS assurance?

A user may not rely on the IRS opinion letter that accompanies an IRS-preapproved document unless the user makes no change beyond those expressly allowed within the document or by an IRS Revenue Procedure about preapproved documents.

But what if an interim amendment states a provision on a point nowhere even mentioned in the preceding cycle’s IRS-preapproved documents? Without defeating reliance on the most recent IRS opinion letter, may a user change a provision the IRS never vetted?

I don’t yet know whether anything might call for even considering a change. But here’s why understanding the rules matters. If a change would defeat reliance, I might narrow the scope of my review and spend less of my client’s money and attention. Or if a change would not defeat reliance, I can, before I start work, ask my client how much or how little it wants me to review. And knowing the rules I might have better knowledge to form my advice about whether a change might be worthwhile.

I know many plan sponsors never seek a lawyer’s review of what a recordkeeper or other service provider has presented. But for those of us who are asked, the client and the lawyer together need to define what the lawyer is looking for, and, often more important, what not to consider.

I understand that I alone am responsible for any advice to my client.

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Is the regulation allows Safe Harbor Formula to be more than 6%. I have seen Safe Harbor enhanced match formula upto 6% as a common. But I have seen one document and it mentioned 100% up to 9%. It is already breaching the Employer Match limit of 6% and 4% rule. Any where in the regulation it allows more than 6% as Safe Harbor.

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One-person plan, employees are in a separate MEP.

Owner withholds the max 401(k) once a year on his 12/31 paycheck which is cut every year on 1/5.

The pay is included in wages for year ending 12/31.

Turns out owner forgot to deposit the 401k for 6 months.

Lost earnings was calculated and deposited

Perhaps this is a longshot but if the 401k is not going to be deposited until the next calendar year no matter what, for Form 5330 purposes can it be considered late for the next year, or more likely since it is included in taxes for prior year filing, does it have to be in that year's 5330?

We’re starting to hire a few employees outside our home country, and one thing I’m still struggling to understand is employee benefits. We plan to use an EOR rather than opening entities straight away.

I’ve compared a few providers, and Globalization Partners is one we’ve been speaking with recently. I actually understand payroll and local employment side fairly well, but benefits get less clear when every country has different requirements and expectations. I don’t necessarily expect someone in Germany and someone in the UK to have identical benefits, but I also don’t want one package to feel noticeably worse just because of where the employee lives.

So, I have a question for employers already doing this, do you normally let the EOR recommend a standard local package and work from there, or do you set your own global minimum and then add whatever is required locally?

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Can we simplify rollovers between retirement plans?

Here’s yesterday’s prepublication release of IRS Guidance on Section 324 of the SECURE 2.0 Act with Respect to Rollovers, Notice 2026-49, 2026- -- I.R.B. --- (---, 2026), https://www.irs.gov/pub/irs-drop/n-26-49.pdf

The Notice suggests a step-by-step way for a receiving plan to get information and money from a distributing plan.

The Notice includes sample forms.

Will this work?

We have a large client that will be opening a new CB plan for 2026. They recently closed a former CB plan.  It was managed and record kept in the traditional way. Now the CEO would like to investigate online record keeping products for the new CB plan.  Does anyone know of a CB record keeping product?

The CEO would like participants to be able to access their balance throughout the year. Their plan plan credits actual earnings between 0 and 5.5% annually. How would actual earnings be credited during the year?  The plan sponsor historically pre-funds large amounts to the plan monthly.  How would that get credited to participants? The plan requires 1000 hours teach year to receive a contribution credit. This could work reasonably if the plan is funded once after the end of the year, and then actual earnings within the allowable range are credited. 

I can see some advantages with distributions - online application, notification to the Trustee to approve.  The spousal waiver witness/notary could be a complication.  To make it work, the plan sponsor may need to change how it has operated in the past.  Plus there are record keeping fees which will eat away at the low earnings needed by a CB plan. The plan has operated very well under the traditional arrangement but technology sounds appealing more to some than others.

Comments, product recommendations, experiences are appreciated.

Tom

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