austin3515

415 limit is not pro rated. Pretty sure basic plan docs always say the 415 is never prorated for a new plan but don’t quote me, look in your BPD. In earlier posts I mentioned using an effective date of 1/1 but that was mainly for the comp limit. Not everyone agreed with that approach. Note that ALL DC plans are part of 415 limit so SIMPLE deferrals and Er counts towards 415.

Not that I have heard. We’re still waiting for guidance on mandatory Roth catch-ups which affects 100% of all plans basically. I guess the guidance team was DOGE’ed…. Plus isn’t there some policy that they have to remove like 3 regs for every new reg or something like that? my hope is that when ADP and Paychex and the rest called their people at IRS they told them what the final reg would say about how to apply the limits. Would be really messed up if different providers took different approaches because they can’t exactly re-reprogram their systems. sorry to change topics!

In my view the only way to roll is: Each pay-period, run the following test on a YTD basis: (using 2025 limits) Have they exceeded $23,500? If yes, Do Roth deferrals = or exceed $7,500? If yes, deferrals = whatever the participant elected (may of course be 100% pre-tax, 50/50, etc) If not, Deferrals are 100% Roth (well at least until Roth is 7,500 YTD and then whatever the standing election is. [I will note that of course applying and reviewing calendar year-to-date limits is completely within the scope of their skill sets]. My "apply as a year-to-date limit calculation" method has a real nice side benefit: If the only reason someone's deferrals are "overridden" to Roth is based on this YTD Limit calculation (performed programmatically), their payroll deduction contributions will revert back to their standing election on the following 1/1, which in my view is an enormous consideration that is often not discussed (i.e., what happens on 1/1 after being reclassified). This is no different than someone electing $3,000 a pay-period 1/1, having their deferrals stop when the max is reached, and then resume the following 1/1 automatically as the standing election. I think this is a reasonable implementation of the fact that "catch-ups are the last contributions of the year." It just seems a bazaar interpretation that someone who contributed $23,500 of Roth in the first 9 months is barred from pre-tax for Q4 because of a literalist reading of the statute that disregards any sense of practicality. I think it is somewhat akin to capping the match at X% of the max comp amount, regardless of your YTD comp when the match is being funded. [edited for a reversal in my bullets]

It is a bit hard to justify that you can do almost anything to fix a mistake as opposed to doing a prospective amendment. Sometimes I have wished clients had not asked me a question, and just done it wrong, and then it would have been obvious that a plan amendment to accomplish the objective was available... but that is an important distinction here, EPCRS corrective amendments versus well thought and planned amendments.

Merger documents says Plan B merged into Plan A as of 12/1st 2024. The money from Plan B's provider was wired over to Plan A on January 15th. A) My personal "best" interpretation here is that Plan B no longer exists on 12/1/2024. The merger agreements say that Plan B is now a part of Plan A. To me that means the money held by the Plan B provider is now a part of Plan A. B) The other interpretation is that in spite of the fact that the merger agreements indicate that Plan B is now part of Plan A, that that's not really so because the assets have not yet moved. So I continue to file 5500's (and in my case get an audit) for Plan B until the assets are down to zero. What do you guys think?

I shudder to think how common this type of thing is.

The practical problem I see here is that the participant is unlikely to say the right thing. That's where forms are helpful. They are checking a box next to a statement that says the right thing. "No contriubtions for me please" is probably not specific enough for benefits records even if anyone knows what was meant.

I mentioned bankruptcy because unless the business is bankrupt or the owner (who is a fiduciary) is bankrupt (unless the corporate veil is pierced which is something I know nothing about beyond the term), I don't see how you get out of funding the contribution.

I had a client once that went bankrupt. The Plan is simply a creditor. When assets are liquidated they get a piece just like every other creditor. Closing the doors is different than a bankruptcy liquidation. They should definitely be talking to a bankruptcy attorney. As the saying goes, you can't get water out of a stone. Sure they owe the money but if the well is dry, yada yada. If the 100% business owner has money outside the business that is clearly where the exposure is.

I would be curious to know how many employees there are. If this is a big company with hundreds of employees, you just can't do something like this. You must assume that what you did will become known. And then the client is exposed to accusations (perhaps) of all sorts of motivations for benefitting one employee and not the other (I assume you can use your imagination for what someone could conjure up).

I have a limited amount of money to spend on tehcnical resources. I find that the ERISApedia Ask the author service is indispensable. It comes with the qualified Plan eSource. I am curious if others have done a deeper dive into whether or not the ERISApedia publications are comparable to the ERISA Outline Book. IT is hard to imagine not havintg the EOB but I am intrigued by ERISApedia's AI functionality, I just watched a demo. What do you think?

But that's nondiscrimination testing, my question is specifically about coverage testing.

If a plan makes haphazard profit sharing contributions to various people, relying on the "each participant is a separate allocation group" method, must it pass the ratio percentage test for coverage due to the nondiscriminatory classification test in the Average Benefits Test?

As promised. Hopefully people can find them when they need them! I ran these reports off of Relius. Before even opening them I marked as read-only. I then copied and pasted the data into one multi-column spreadsheet where each column has a unique mortality table and interest rate. I just used 7.5, 8 and 8.5. All APRs (7.5, 8 and 8.5).csv 1984 USP 8.5.txt 1984 USP 8.txt 1984 USP 7.5.txt 1983 IAM Female 8.5.txt 1983 IAM Female 8.txt 1983 IAM Female 7.5.txt 1971 IAM Male 8.5.txt 1971 IAM Male 8.txt 1971 IAM Male 7.5.txt 1971 IAM Female 8.5.txt 1971 IAM Female 8.txt 1971 IAM Female 7.5.txt 1971 GAM Male 8.5.txt 1971 GAM Male 8.txt 1971 GAM Male 7.5.txt 1971 GAM Female 8.5.txt 1971 GAM Female 8.txt 1971 GAM Female 7.5.txt 1983 IAM Male - 8.5.txt 1983 IAM Male - 8.txt 1983 IAM Male - 7.5.txt 1983 GAM Male - 8.5.txt 1983 GAM Male - 8.txt 1983 GAM Male - 7.5.txt 1983 GAM Female - 8.5.txt 1983 GAM Female - 8.txt 1983 GAM Female - 7.5.txt

Completely agree. " notice must accurately describe the type and amount of compensation that may be deferred" Key word is "describe".

A literal reading of IRS Notice 2024-02 seems to suggest that each person needs to be told their own personal precise amount of 401(k) remaining for 2025 based on their own YTD SIMPLE IRA Contributions: "Yes. Under § 1.401(k)-3(d)(2)(ii)(D), a notice must accurately describe the type and amount of compensation that may be deferred under the plan for the notice to satisfy the requirements of section 401(k)(12)(D), (13)(E), or (16)(B)(iii) of the Code." 1) the notice is due 30 days before the switch so this is not possible. 2) Nothing in this seems to really suggest that an individualized notice is required for every participant. We are hearing some say that not only do you have to provide them an estimate of what remains for the year 30 days in advance of the switch, but that you also have to follow up after the switch to provide the exact amount available for the year. While I can see the interpretation of the text, to me the spirit of the communication is to disclose the total limit available for the entire year between the SIMPLE and the 401(k). If the above is in fact the requirement, it becomes almost prohibitive in terms of making a transition like this. Small employers cant always get nice Excel exports, and fewer have the ability to do all of the mail merges needed. Please tell me what you guys think!

What are you referring to here? Just want to make sure I didn't miss anything

you'd figure the IRS would just put all of them on their historical pdf chart on their website. But fair point that they are all in the IRS Notice! Thanks!

There were several new "indexed for inflation" figures for SECURE 2.0 that don't seem to be published anywhere. I'm pretty sure these are all indexed: 1) $100,000 threshold for employer contribution credits. 2) $145,000 threshold for Roth catch-up requirement 3) Domestic Violence $10,000 limit? Why aren't these included on any charts/tables? Anyone have a solid source with all of them? Ferenczy seems to have the most (hers has the Domestic Violence one, but not the employer contribution credit one. https://ferenczylaw.com/flashpoint-2025-cost-of-living-adjustments-2-2/

Oh ok I will just skip that one then.

Bri / CB Zeller, THANK YOU BOTH VERY MUCH! I have a testing tool that I use and I want to be able to use any of these available tables so I can recreate the results of any other provider. I will post it here as an attachment when I am done!

Anyone know what this one is called in Relius?

CB, Relius lists so many more than 10. Do you know which 10 are relevant?

Anyone know how to pull them out of Relius? I guess that's what I will have to do.

Maybe I'll put together my own website. APsAPRs.com. I'll sell ads even...