401kWhisperer

I believe it's because the plans were mostly defined benefit and were with brokerage accounts. They aren't that familiar with DC plans, so used the same procedures and a little bit of "because that's what we've always done". I just can't see another reason for obtaining one since the RK is going to issue the 1099-R. I know they don't cost anything, but why obtain one if it's just going to go dormant from non-use. Appreciate the feedback.

Thanks, we are just trying to draft the plan document for the profit sharing plan. We noticed this language right under that section in the adoption agreement: Note: Satisfying the Minimum Top-Heavy Allocation in another plan for some but not all of the Participants may cause the Plan to fail to satisfy the uniformity requirement of Treasury Regulations section 1.401(a)(4)-2(b)(2)(ii) for plans using a design-based safe harbor, even though all other requirements of the safe harbor are met In our projection, two of the NHCEs are receiving large PS allocations, so they are good with the gateway. The 3rd NHCE is only receiving 3.30% PS. But also a 4% SHM in the 401(k) so originally we were like it's good. But now drafting the document realizing, we need to bump this one up to receive an additional 1.70% to reach 5% in the PSP. we thought about putting language stating that the top heavy will be offset by the SHM in the 401(k) plan but based on that "Note" and what you said above, I don't think we can do that.

Hi, I reread a few prior discussions on this and it seems to be the consensus is that if the plan's assets are with a recordkeeper (Vanguard/Ascensus for example), no TIN is needed because they are the payer on the 1099-R. I just wanted to confirm I'm not missing something and perhaps there's another logical reason in getting one. I am at a new firm and they generally request them for all plans. I believe my last employer only applied if the assets were with a brokerage account. thanks!

Hello, we have an employer with 3 plans: cash balance, 401(k) safe harbor match and profit sharing only. If we state in the PSP document that the 5% top heavy minimum will be funded in this plan, are we ok if the SHM offsets it in the 401(k) plan? Example, employee defers 5%, receives a 4% SHM in the 401(k) plan. They need to receive an additional 1% to satisfy TH. We allocate that in the PSP. Will this pass muster since the PSP only shows 1%? thanks!

Yes. On the payroll report and W-2 it shows as Roth. When we reconciled, we were like oh he's missing some Roth money. Then we received a payroll report of deductions and someone typed in "LOAN REPAY" next to the amount missing. At the recordkeeper, they were processed as loan payments, just reported on the W-2 as Roth.

Hi, We have an awful client that needs to hire a payroll service. This is the 4th year in a row where she's screwed everything up. The latest is there looked like missing Roth deposits for the last few payrolls in 2025. It was weird though because each deposit made was missing the same exact # - $110.09. Then I search in the file and there's a listing of payroll contributions and typed next to the Roth it says "loan payments". However, they were reported on the W-2 as Roth. Since they are both after tax, is it ok to leave as loan payments and just reduce that amount on the admin reports. They obviously won't tie to the payroll/W-2. I just wasn't sure how the Roth affects the 1040 (if it does at all). Thanks,

Hi all, we are taking over a plan that uses the Relius document. We use DGEM/ASC. We don't have the Cycle 3 basic doc yet but we do have the PPA - assuming not too many changes but wanted to confirm. They are a law practice where the staff is paid by the plan sponsor then two of the partners are paid through their PA and they are adopting employers...well that's the issue. We have the participation agreements from the PPA (one was 1/1/2026 and then one joined on 1/1/2017). The cycle 3 adoption agreement only lists the one that was added later on, the original one is mentioned nowhere (which is one our issues). We asked for the participation agreements and they said the prior TPA told them: Our previous company advised that the agreements only needed to be signed once and did not require signatures upon restatement. We submitted a ticket with ASC and they responded: In the absence of executed participation or adoption agreements, we recommend reviewing the Relius plan document to determine how adopting employer participation and execution requirements were handled, as this will be key in evaluating whether separate execution by each employer was required. I am not that familiar with Relius, does anyone know if the basic plan document states the adopting employers are not required to sign off on plan restatements? Thanks!

me too! i tried it like 7 times for one client. My co-worker same thing. But the owner of our company was successful. I'm not sure what the deal is1

So, every day I find something that I thought I knew and now question my entire life. Most of our safe harbor plans we write with no hours or last day requirement for the new comparability profit sharing to allow for flexibility (they have to get the gateway anyway for SHNEC). I am now questioning a safe harbor match plan with new comparability PS. We sometimes don't give the PS to HCEs (spouses, non-owners) and terminated employees. As long as it passes, we figure it's ok. I went down a rabbit hole today with chatgpt and he/she/it told me that if the SPD is explicit in saying they will receive a PS, then they have to receive it. This is what the SPD says: Discretionary Employer Contribution formula. We will decide each year how much, if any, we will contribute to the Plan. Since this Employer Contribution is discretionary, we may decide not to make an Employer Contribution for a given year. We may decide to give a different contribution to each eligible participant under the Plan. The Employer Contribution may be determined as a percentage of compensation or as a dollar amount. We will inform you of the amount of your Employer Contribution once we determine how much we will be contributing for the year. Employer Contributions. Under the Plan, as amended, you do not have to satisfy any additional allocation conditions under the Plan. Thus, you will be entitled to share in any Employer Contributions we make to the Plan if you satisfy the eligibility conditions applicable to Employer Contributions regardless of how many hours you work during the year or whether you terminate employment during the year. If this is a SHM plan - do we have to give a PS to terminated participants OR HCEs as long as we pass the required testing (401(a)(4), 410(b), TH)? I Thanks!

Many if not all of our clients that utilize this are self employed, so there's no pay to be withheld from. But that is something I had never thought of. Thanks for bringing that up.

I believe it's because they don't need or want the tax deduction for the company. They make the deposit and then immediately convert it to Roth and it doesn't affect their W-2/Sched C or K-1. On a few of these it was because their wages were enough to go up to the max 415 limit but not enough to fully take advantage of the 404 limit. So, they do the max def, PS and then the rest is after tax. For example, comp is $80,000 - then they can only have $20,000 in employer and wouldn't be able to max out the 415 limit. But they could do $31,000 in def, $20,000 PS and $19,500 after tax to get to $77,500. We have a few that are using the employer designated Roth but again if their wages are not enough, then they can't max. So, going back to your comment above, if there were no deferrals - could the after tax be funded for the full 415 limit PLUS catch-up or because there is no pretax/roth, it's limited to $70,000 for 2025?

Our firm has a lot of owner only so we tend to have alot of mega Roth conversions. I can't seem to find a definitive answer on what the limit is when the plan is ONLY doing after tax -> Roth. I've read alot of places that if you are 50 and over, then the limit is $77,500 for 2025 but the examples always include deferrals/Roth. What about when it's solely after tax? I read an AI response that said if it's only after tax, then the limit is just $70,000 because after tax is not subject to 402(g): Elective deferrals = pre-tax 401(k) deferrals + Roth 401(k) deferrals (salary-reduction contributions subject to the 402(g) limit). After-tax (non-Roth) contributions = a different bucket under §415(c), not subject to 402(g), and not elective deferrals. Thanks!

Hi, we have a client with a Simple plan that is considering replacing with a safe harbor 401(k) plan. We *think* that's not possible for 2025, because we would've needed to terminate and replace by 10/1 - and it's too late for a 30 day notice. Are we thinking correctly? Alternate option we were thinking is to open a profit sharing only for 2025. We are getting conflicting information on whether you can have a PS only at the same time as the simple. We searched online and came up with this, but aren't sure of the accuracy: Yes — allowed, but operationally awkward. Carefully decide whether to (A) keep the SIMPLE and add a separate profit‑sharing plan (two plans to administer) or (B) terminate the SIMPLE mid‑year and adopt a consolidated 401(k)+profit‑sharing plan (requires 30‑day SIMPLE termination notice and adherence to SECURE 2.0/IRS Notice 2024‑02 procedures). thanks!

We are running a projection for a plan with permitted disparity and trying to max out the owners. Is it possible to max out two owners if one maxes out before the other? One's deferrals are less than the other, so they can receive a larger profit sharing. HCE #1 $350,000 comp $23,500 Roth $21,000 6% SH Match - if we give $25,500 PS - this is 7.29% HCE #2 $350,000 comp $18,500 Roth $18,500 6% SH Match - if we give $33,000 PS - this is 9.43% I ran this through chat(k) and the response was below: By sizing profit-sharing so that HCE #1 reaches $70,000, you establish a uniform 7.2857% profit-sharing rate. Participant #2 therefore also receives $25,500 of profit-sharing, bringing his total contributions to $62,500. He cannot reach the $70,000 cap under the same allocation formula. Under a four-step permitted-disparity profit-sharing formula, both owners’ allocations derive from one uniform banded schedule. Once we max out #1 at 7.29%, is that what HCE #2 must receive? There are also two NHCEs - so this also affects what they get - if we can give #2 up to $70,000, then I assume their % is based off the higher number.

I have an email that I saved from Charles Lockwood (RIP) from 2013 where I asked a silver support question about waiving for a participant by name due to being let in early. His reponse: "There is no limit on the ability to retroactively amend the plan to waive the eligibility requirements based on the intent on the ER. As long as the EE is an NHCE, you can amend the plan to waive participation for the specific individual, regardless if the ER intentionally allowed the EE into the plan". I always took his word as gospel to be honest.