Transplant

My apologies, yes that was a typo. This is all pertaining to 2026. Client would like to change the compensation definition to exclude bonus pay (which they pay at year-end) and have not paid for 2026. Compensation definition is W-2 wages, with no exclusions. The plan year end is 12/31

Client would like to change the compensation definition to exclude bonus pay (which they pay at year-end) and have not paid for 2025. The plan is Basic Safe Harbor Match, based on the IRS guidance (2016-16) in part, a mid-year change of the compensation definition for matching contributions is allowable if the definition change is made retroactive for the entire plan year and satisfies notification requirements. The types of changes discussed "The Change in compensation must not be retroactive in a way that would reduce benefits. For example, if the change excludes certain types of compensation (like bonuses), it must be applied consistently to the entire plan year and cannot retroactively affect contributions already made." per the client they make bonus contributions at the end of year and to date have not made bonus payments in 2025. Legal resource states this would be reduction in benefit and if an amendment was made that Safe harbor status would be lost for the year. Thoughts?

Thank you, I've never done this or seen this done, but I have an advisor that is convinced it can be done and has advised the plan sponsor that it can be done to reduce the percentages.

Thank you, I've never done this or seen this done, but I have an advisor that is convinced it can be done and has advised the plan sponsor that it can be done to reduce the percentages.

Can the deferral amount used for ADP test be reduced by the available catch up for the year on the front end? For example, have a catch-up eligible participant that deferred $27,000 during 2024. The deferral amount used for the ADP test was $23,000 (401(a)(30) limit for 2024). Since the participant is catch-up eligible can $7,500 of the $23000 be classified as catch-up reducing the amount used for the ADP test to $15,500 ($23000-$7500)?

Flexible Discretionary Match, per the document definition the Employer has full discretion over the formula or formulas for allocating (with the exception of the allocation conditions noted in the document). Can the formula exclude a compensation type that is not excluded in the document? For example, the plan only excludes Pre-Entry and Post-Severance leave cashouts Compensation. Can the Employer's discretionary match formula exclude Bonuses? Found several spots that indicated they could exclude Bonuses in the formula, if the match was definitely determinable and that the Administrator and Trustees were aware. Just doesn't feel quite right.