Gilmore

Not to mention the issue of LTPT potentially added to the counts in the future. This is a huge relief.

Thanks Bird for this question. Timely for us, too as we just experienced a similar situation. Am I correct in the following fact pattern? Two 50%, long time owners. In June 2022, ownership is transferred 100% to a new ESOP. Both have non-owner spouses in the plan. They are the only officers, and exceed the comp limit each year. Assuming ESOP continues to maintain 100% ownership, and prior owners continue to be the only officers. For 2022, both owners and the spouses are considered to be 5% owners. For 2023, both owners and the spouses are considered to be 5% owners (looking back to 2022). For 2024, no 5% owners. Prior owners, as officers exceeding the comp limit are Key Employees. Spouses, as non-officers are now former key employees. Does that all sound appropriate? Thanks very much.

In this case, the plan requires last day employment to accrue a match allocation, no exceptions. The HCE died during the year. When the Plan Admin calculated the match they did not consider death as being a reason to apply the last day rule. This is the first time that a participant has died. If the plan sponsor amended the plan to allow the death exception to the last day rule going forward, do you think that would be an adequate answer to the rhetorical question of what they would do in the future? Thank you.

Would SECURE Sec 301 apply if the overpayment was to an HCE? Say an employer miscalculates an HCEs match and prior to discovering the error the HCE has terminated and already taken a distribution. ACP passes so no corrective distributions were due. Does the fact that the HCE is the only overpayment negate Sec 301, or can the employer allow the HCE to keep the overage assuming no other participants are affected? Thank you.

When the post-severance compensation rules came out several years ago I had a conversation with our clients to discuss the options. Usually the decision to include or exclude came down to their payroll system and the administrative complexity of excluding some post severance, like unpaid leave pay, and including some post severance like final hours worked. Our default is to include, if that helps.

Concur with D Lewis. We also use FT and an administrator here was able to set up the file as a csv and import into the FT System. I know that's not much help with Relius, but maybe some hope?

Gateway passes, if applicable?

I wouldn't be too hard on yourself. I just read the ASPPA update that a technical error has now eliminated all catchups effective for January 2024.

Nice. Funny, I was just rereading that section to update my chart and made a note that it did seem that the pre-2023 service would count in a 401(k). Appreciate the update and also sending the question for the upcoming ERISApedia session. I've signed up for that one as well. Thanks very much.

Sure thing. I posted it more for the structure than the content.

I am not an attorney, just a lowly TPA, but when I started reviewing the ACT, I thought I would create a spreadsheet that I could sort by the code section, effective date, etc. This was just my first run through and obviously needs to be updated, but please feel free to take it and make it your own. Secure 2.0 Provisions.xlsx

Yes, thanks for clarifying the excluded service.

I'm assuming this also means that an ee with 500 hours in 2021 and 2022, but not 2023 or 2024 would be eligible as a LTPT on 1/1/2025?

No problem. I was definitely being cynical.

I'm assuming with all of the new inservice distribution options that retirement plan "leakage" isn't a concern anymore?

I guess you get a boost in the deferral max for a few years leading up to the traditional 65 retirement age.

Yes, that would be nice. The hope of going to electronic filing feels like an excuse for not fixing the immediate problem.

Yup, we've done that when we've had a whole bunch in a package get rejected. For this one-off I'd like to call and get confirmation myself.

On 10/18 we sent two extensions. One for a 3/31 plan year end and one for a 4/30 year end. Normally we would have waited on the 4/30 year end but because we have been having 5558's rejected we sent earlier than usual. Our certified mailing return receipt (old school green receipt) was stamped as received 11/4/2022 by Ogden, UT. The 4/30 plan year end with the 11/30 filing deadline received a denial letter. The one that was "late" with the 10/31 filing deadline so far has not received a letter. So just like M says, we got our 2848 and are setting aside a morning to wait in queue. This has been an ongoing issue for the past several plan years. How are others dealing with this? I've heard some that send 5558s a month after plan year end just to have it on file. That sounds like compounding the problem with all of the unnecessary forms going in to be processed, but we are seriously giving it some thought for 2022 plans.

An employee is out on some sort of unpaid leave. No compensation, but not "officially" terminated. I would agree that they are not part of testing. Assume no balance in the plan. Would you include or not include in the 5500 counts if they have otherwise met the plan's eligibility requirements?

Thank you very much Lou. That was more optimistic than I had hoped.

Calendar year 401(k) plan provides for a 3% safe harbor nonelective. Employer wants to change to safe harbor match for 1/1/2023. Discussions started weeks ago, but employer got side tracked with personnel changes, including board members who were supposed to be making this decision. They still want to make the change, but now that we are passed the safe harbor notice period what is the risk if they proceed with amending the plan and giving out the notice of the safe harbor match say, next week. The RK supposedly already sent the 3% notice, although that has not been confirmed.

Of course if it is FT you can always call them and get their advice; probably the safer course of action.

Are you using the FT William system? I see ftwilliam.com in the date and time. Is there a downside to loading preliminary census data into the existing plan and running an ADP test? If it is FT you can modify the plan provisions then just switch them back after you get all your reports.

That's interesting Lou. The EOB says the IRS has agreed with the first option, which is she would not be a Key Employee for purposes of the 2021 top heavy minimum, but says that the second option is the one that most aligns with the Code, which is your take as well.