Bruce1

So if a participants wages are $150,000 in 2025. Then the participant has to contribute Roth catch-up in 2026?

This is true. Morning star does some 3(21) for plans. The sponsor would have to take an active role in changing the investments, reviewing the information sent from Morningstar and keeping up with it in general. Maybe the plan sponsor decides only to offer a target date series to participants..? BTW for small plans .40% fee to an advisor is a very small fee. The plan would 100% pay the RK and TPA more in fees than an advisor.

Can anyone confirm for me. If in Article1, 1b (ii) employees with at least $5,000 in compensation during any 2 calendar years preceding the calendar year is selected. This means that to determine eligibility as of January 1, 2025, you would look back at 2023 and 2024, and any employee who earned $5,000 or more in either of those years would qualify to participate in the plan beginning January 1, 2025. Of course you'd look at current compensation for calendar year 2025 as well.. It seems to me like there is no two year wait period because in Article1, 1b (ii) it says "during any 2 calendar years preceding". It doesn't say you must have $5,000's in compensation during both 2 calendar years preceding.

Thank you!

What year do you file the 5500 for if the plan is an off calendar year plan. For some reason I wasn't able to read in the 5500 instructions on which year you'd file the 5500 for. Maybe I'm missing something?

Peter I've never seen an IRA where they've had both pre-tax and Roth dollars in them. Even when doing rollovers it always comes in two checks.. Hope that helps.

I'd imagine neither the HR person or employee knows what after-tax even is, or the difference between Roth and after-tax. This seems like an error on the part of the HR to contribute to the right account. Since this isn't even a contribution option in the plan document.

Fully vested employer contributions SEPs in my view would normally only be good for very small companies. You can do an integrated formula. I also don't necessarily understand why an employer wouldn't want to encourage employees to save part of their salaries. SEPs to me would be a niche thing for the right employer.

Does anyone here actually like ADP?

Are you suggesting that the plan pay for investment loss experienced by the individual participant?

Thank you all so much for your insight.

Yes

I feel like this is a dumb question. With a new comparability profit-sharing allocation for a safe-harbor 401(k) PSP. Would you still need to test the average benefits test, rate group and gateway for a pro-rata allocation to all eligible participants?

Thanks everyone for your comments.

Essentially the answer to my question is the plan sponsor needs to set up one retirement plan and offer it to all employees under one umbrella? Although as @austin3515 mentioned if the plans had identical provisions it doesn't make sense in my mind why the two businesses couldn't individually sponsor a SIMPLE IRA with the same benefit provisions.

An individual has 100% ownership of two separate companies company A and company B. With having a brother-sister control group. My question(s) are: 1. Is it safe to assume this individual can sponsor two individual SIMPLE IRA plans, one for each company and be considered compliant with control group rules? 2. Would it not be acceptable to sponsor a SIMPLE IRA at one and a SEP IRA in the other? 3. Would it not be acceptable to sponsor a SIMPLE IRA at one and a 401(k) PS in the other? Thank you.

the 5305 is to be used with sponsors that only want to use one institution and 5304 would be used if you want to use multiple institutions. You probably already know that. But most institutions have their own internal forms that serve as the 5305, and I guess technically since the sponsor has "said" I'm only using one institution, it could likely mean that you beholden to one institution per year..? That's the only way I can make sense of the institution not letting a client leave is because they have to use their institution for the full year.

Thanks for the insight Paul. I assume these new deductions would not have any affect on plan compensation?

Any more guidance on this issue? Our team is transitioning a simple IRA to SH and the doctor would like to make profit-sharing contributions. Is the 415(c) limit prorated as well?

It would certainly make sense to make Roth contributions. If you're wanting to see if it makes sense, you'd want to look at your tax brackets in retirement.

For history's sake. Did Roth distributions previously satisfy your annual RMD amount?

How does it work with you continuing service? There still has to be a 5500 filing and no ones going to work for free. How do you get paid as a TPA if a company is going bankrupt? Sounds like a stupid question but just curious what other practitioners have done in these cases.

Working with a start-up 401(k) with the new auto-enrollment feature. Client asked if an email or a text message is an acceptable form of an opt-out. Would this type of election hold up in a DOL audit?

This question should be posed to an attorney. In a normal situation the wife would be able to inherited the IRA and assume it as her own. I haven't had a client name a trust as a beneficiary so it certainly complicates things.

Have any payroll software's created anything to help sponsors out with this new rule?