AlbanyConsultant

I don't yet have plan documents, so I can't confirm what the exact language is. I suppose I can't even confirm if there actually is a waiver, but I have to assume that the FA is reading that correctly. I'm assuming it's not a safe harbor plan since it was designed as a one-person plan. I had the same thought - the previous consultant realized they had to put in the waiver to allow the owner to defer in 2025, wanted the YOS/1000 to keep everyone else out... and didn't make the connection that those two contradict each other. The FA says the waiver doesn't get that specific, but, again, I haven't seen it for myself yet. The other employees were given the opportunity to defer in July 2026 - I have no idea what made them suddenly do this, but at least it's not getting worse (presuming they offered the deferral to all the correct people). So this makes me think this wasn't a class exclusion, but rather a "you clearly don't meet the 1,000 hour requirement so you don't meet the plan's eligibility criteria". 410b... shoot, I hadn't even gotten that far yet. Hoping to meet with the client this week and get more information.

Got a call from a financial advisor who thinks he's got a plan with a problem. Plan was started in December 2025; the owner deferred, but because all employees work <1,000 hours per year, they were told that the employees are all ineligible. But upon review of the adoption agreement, it was selected that all employees on the effective date are eligible. And of course they weren't given the opportunity to defer. Note: the business only started in 2025, so at least they can be exempt from mandatory automatic enrollment for now. So kudos to the advisor for finding this and looking for help. We discuss missed deferral opportunity and QNECs and he agreed to send me data. Here's my problem: what is the base QNEC? There is no average deferral rate of the NHCEs because they were all improperly kept out. EPCRS talks about the rate to use for plans with a safe harbor (Appendix A.05), but I don't see an option for a plan with no safe harbor (because why would you put in a safe harbor with no eligible NHCEs? *sigh*). Any guidance? Thanks.

I found that, too. I am not an attorney, so I'm not going to opine on if Wife is meeting all the requirements. I'm hoping (ha!) that if she is working for my client, they have vetted all this already. Presuming this is all kosher, I don't see anything anywhere that says she can't participate in a plan.

First time hearing this one: Husband is in the US on a H1-B visa, and has brought over Wife on an H-4. Wife is employed by my client. Presuming she is legal to work in the US (which appears to require documentation and "milestones"), I don't see any reason she shouldn't be treated like any other employee, right? I presume that the H-4 status gives her some kind of nine-digit identification number so she can be set up with the plan recordkeeper. Thanks.

Shoot - I did do that. It's a stock sale. I'll edit the OP so there's less confusion. Thanks for catching that!

We're reviewing our procedures for a closed MEP (for a PEO), and we're looking to see what the adopting employers are REQUIRED to get versus what it would be USEFUL for them to get. Not in terms of legal notices, but all the admin work. Examples: Top heavy test results - send. Full 401a4 detail... not sent to the individual adopters. No real good reason. So, yeah, like that. Is it just more sensible to treat this is X number of standalone plans and send them all the testing, etc. applicable to their population/'silo' portion of the plan? What are others doing? Thanks.

Plan L is adopted by two employers, Company L and Company A, in a controlled group (due to common ownership). Company L is being purchased in a stock sale effective 8/31/26) but Company A is not being purchased. We're amending Plan L so that Company A is the 'lead sponsor' and will change the plan name to reflect Company A. Purchaser's intent is to allow Company L to continue to operate as is for a few months and then dissolve Company L and transfer the employees to Purchaser's company on 10/31/26. Purchaser has no desire to merge the plans (which they can't fully because Company A still exists). What are the options? Do they change depending on if we're talking in September vs. December? My initial thought was that since it's a stock < this is an edit - I had originally mistakenly said it was an asset sale here! > sale with Company L continuing that Company L's participants will all get transferred over to Purchaser's Plan in September... but what if we wait it out through December and they are no longer employed by Company L? This is where I started seeing too many possibilities and get turned around. Thanks.

I've got a client who asked if they could use the xt allocation in the plan to not allocate "profit sharing" (I know, I know) to anyone who doesn't already have an account in the plan. They have several thousand employees and a lot of turnover (but they are required by donors to have a very generous eligibility provision), so trying to get accounts set up for small employer allocations that are then immediately withdrawn is a hassle - they'd rather direct the contribution to more stable employees. Acknowledging that there is still a lot of work to do to firmly establish the parameters here... how off-kilter is this idea? The AA does allow for classes of individual participants. And they don't necessarily want a match. They are OK with the allocation going to participants who terminated during the year who have previously opened an account (i.e., deferred). Let's say that I can pass 410b somehow - maybe by not giving the HCEs any allocation (which would be best for gateway and the rest of 401a4 testing). Is there anything else that would prevent this kind of skullduggery? Thanks.

A participant passed away, and the most recent beneficiary form shows his mother as primary beneficiary and sister as contingent beneficiary. We have confirmed that there are no spouses, children, or anyone else in the picture. Mother is in an elder-care facility with dementia, and Sister has a POA "for all financial matters" - we've asked for a copy of the POA to confirm. What's the right direction here? Let's assume that the POA does say what we're told it says. I assume we can then take direction directly from Sister and distribute however she completes the forms? Is there any particular language that I should be looking for on the POA? I understand that this might be attorney-time, but if I can facilitate this somehow, I'd like to help. Thanks.

Am I reading this right? SECURE says that if I implement a PS-only plan today for a 2025 plan year, then there's no 5500 for 2025 because it's retroactive and I just check that box on the 2026 5500. But if I was paranoid and had the document executed on December 31, 2025, then a 2025 Form 5500 would be required?

I agree with @justanotheradmin - for any 2025 allocations, you should only be using forfeitures in the account as of 12/31/25 (presuming that's the end of the plan year). That being said... especially in plans with forfeitures happening all the time, good luck telling your plan sponsor to only use $X when the recordkeepers make it so easy to use whatever is sitting there. And I've had auditors who let that go on the theory that as long as it's being used, that's OK. So in general I wouldn't stress over it. But in this case, since this is the only non-key, I'd really want to play it 'by the book'. Dear plan sponsor, you have to deposit some money but the good news is that (a) some of it will be forfeited and (b) you'll get to use all that sweet, sweet forfeiture in about seven months.

Very bold to assume I'm only married to one person... ! 😁

@Paul I I'm not sure I can distinguish exactly who is the problem... does it matter? I sent them a report that says in part, "dear Partner 1 and Partner 2, make sure to deposit your pre-tax 401k deferrals per your elections". Partner 1 responded "will do". "The partnership" made the deposit of all the employer contributions (including for the partners), didn't send any funds for the partners' deferrals, and then filed their tax returns (taking deductions for the deferrals that were not deposited). I don't see where any additional impact on the partners would be, other than lost earnings paid by the partnership.

Sound points as always, @Peter Gulia. There are other participants - in fact, this is in a MEP. One of the participating employers messed it up (this PE does have other non-partner participants as well). So the MEP sponsor is keen to do this as 'by the book' as possible.

To clarify, they took the deduction on their return. So treating it like a late deferral deposit (instead of a missed deferral) sounds reasonable.

@Bri, that sounds more like correcting it as a late deferral deposit.

I know I've seen this discussed before, but I'm not finding it... 401k plan with SHNEC and profit sharing. The partners have their valid deferral elections in place by 12/31/25 to both do the max. We sent a contribution report telling them to deposit the SHNEC and PS and also the deferrals for the partners before the due date of the tax return... and they forgot to do the deferral part. 2025 taxes are filed. What recourse is there for the partners at this point? I thought I remembered that it was treated like a missed deferral opportunity for them? Appreciate anyone pointing me to where this is covered. Thanks!

D, the 100% owner of an S-corp, passed away in 2018. Ownership of the business passed to D's two sons who worked there (and were already participants) 50/50, and they also happened to be his 50/50 beneficiaries. D was in RMD payment status, so we've been continuing to calculate his RMD each year and splitting it between the two sons. Since D passed away pre-SECURE, are there any timing issues I need to worry about for the distribution of D's entire balance? The post-PPA plan document says that the beneficiaries "may" elect the 5-year rule. Thanks.

I would hold to see the W-2. I figure that since I already have evidence that it was NOT on W-2, I can't take it unless I now see that something has changed. I wouldn't immediately resign; I'd complete the work based on what I could support. If they want to fire me over that, so be it. If they ignore my calculations and do something different, then I'd probably have to resign. I'm pretty sure that I would apply this consistently regardless of the client... but you know what they say about good plans surviving first contact.

If it was my plan from the jump, totally. But this is showing up at my door with this problem. I had intended on amending this provision out (and I still probably will), but this employee is kinda adamant.

Had three clients get these this week. All on plans fully on recordkeeping products that have never filed a 945 for plan purposes. Which makes me wonder if those plan sponsors have previously filed a 945 for some other non-plan related reason... It's always been our experience that whomever is doing the 1099-R should be doing the 945 as well. When we did 1099-Rs for non-product plans (remembering those days un-fondly), we prepared the 945s.

To answer some of the above questions... Yes, the plan allows for a one-time irrevocable election to opt out of the plan entirely. I'm referring here to "opting out" of the safe harbor nonelective and profit sharing allocations. "Opting out" of deferrals is trivial. I always forget this. I'll have to see if this works. Thanks!

Taking over a plan with an owner and two NHCEs. As NHCE#2 is becoming eligible, she says she wants to opt out of the plan entirely. But... then it fails 410b, and the correction is to give her allocations. I've explained this to the financial advisor, the plan sponsor, and the participant. She is adamant she wants nothing to do with the plan "and I've checked with the DOL and I am aware of my options." Sigh. I've had similar situations where someone wants to opt out entirely due to religious reasons... but fortunately, it's never caused a 410b failure. And she is not answering if her objection is along those lines - not that I'm sure that helps. What can we do? Thanks.

Some selected sections of the basic plan document... I bolded the part that I think makes this work.

I'm waiting for the day that casinos convince the government that allowing participants to "invest" in a spin on the roulette wheel is a prudent investment.