M_2015

But if the safe harbor is terminated mid-year, can the plans be aggregated for testing, with the "safe harbor" matching contributions simply being counted as matching contributions?

Thank you. The merging plan will merge mid-year, so I would suspect it needs to be separately tested through the merging date. It's in the same controlled group, however. I think it would be tested for coverage and nondiscrimination on its own (as its own plan, not aggregated with the buyer plan) for the first 8 months. The last four months would be combined with the buyer's plan, but how would they factor the first 8 months? Would they be included in the full plan year numbers, with percentages of actual compensation simply inherent in the testing?

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?

Very much appreciated! The pre-deferral reduction for payroll taxes is very clear, and it's the federal income taxes that I'm struggling with. Pre-tax elective deferrals up to the 402(g) limit are exempt from federal income tax withholding, so I suppose it turns on the interpretation of the plan document. Mine allows elective deferrals up to 100% (for special payments, as here) of 414(s) compensation defined as 415 compensation, but also states that the amount of deferrals considers necessary adjustments under the company's payroll system. That makes me wonder whether this justifies the income tax withholding on the employees' payroll taxes EVEN IF such withholding is not legally required under the applicable Code/Regs.

Employee elected 100% of pay to be contributed as pre-tax elective deferral. The elective contribution would of course be reduced by payroll taxes, but can it also be reduced by income tax withholding? Unique situation here where someone has a $10k supplemental wage payment, elected 100% elective deferral (which is permitted by plan). Should there be income tax withholding on the amount of employee share of FICA & Medicare taxes, so as to reduce the elective deferral? Is there authority for that, or should the elective deferral be equal to 100% of ($10k - EE payroll taxes).

Yes, that is exactly the reason. I believe it's a change in the valuation of assets but am not certain.

Does anyone have thoughts as to whether the decision to change method for determining minimum contributions and/or related application for IRS approval is considered a fiduciary or settlor function?

ERISA does not bar plans from obtaining a line of credit/loan from a bank or other financial institution, but assuming the bank is a party in interest, is there consensus about the ability to rely on 408(b)(17) service provider exemption (adequate consideration requiring reasonable interest rate/terms). And if collateral is required, do parties take the position that posted collateral is not plan assets, similar to collateral posted for derivatives?

Are services as a directed trustee considered "fiduciary" services as contemplated by this exemption? I would expect that it is really aimed at preventing self-dealing, and the residual fiduciary obligations of a directed trustee do not rise to this level.

What if the disability retirement benefit provides a pre-normal retirement age supplemental payment, such as $150 per month, until the earlier of NRA or social security eligibility? I interpret the 411(a)(9) definition as disregarding this small payment because it's less than social security, but am not entirely certain. Thoughts?

Can a DB plan borrow from a party in interest bank and collateralize the loan without committing a prohibited transaction? There's an exemption 81-8 that covers certain short-term investments but doesn't address collateral

Employer erroneously withheld (and made) Roth deferral elections for a few years. Participant did not realize but question is what is the correction? No Code (402(g), 415, etc.) violation but if the amounts are distributed, would the entire balance be taxable or just the earnings? Assume not subject to 10% excise tax on early withdrawals as it would be a corrective distribution. Better approach would seem to be to have the participant make an election going forward but interested in any other thoughts from those who have seen this before.

Many thanks for this! I was thinking because it's just a VEBA-funded HRA that only provides benefits up to the amount in each individual's account that it might be excluded. I suppose that is still considered a self-insured health plan for purposes of the fee.

Is a free-standing HRA that only provides benefits to retirees subject to PCORI?

Does anyone know if an otherwise eligible employee should receive eligibility service for periods on a military leave of absence? Employee was called to duty shortly after hire date and question is whether such service is disregarded for purposes of calculating 1,000 HOS eligibility requirement.