BG5150

The contributions are funded by the employer, the r/k doesn't front any money.  The R/K pulls the funds via ACH they day they receive the contribution file.  Sometimes that is before the participants get paid.

I thought deferrals to the trust had to be from current, not future income.

Found a r/k who posts deferral transactions before the check date.  Basically, they process the contribution file when it comes in.

For example, they processed the 5/9/25 payroll on 5/8.

I didn't think they could/should do that, but they said it was ok.

Do you agree?

If so, is there a stock report I can run?  Do I ahve to get my backend team ro create a crystal report for this?

More questions:

I think maybe I'm asking if there is a rate of return report that can be run with ad hoc dates?

Could it be run on a plan-wide level but with participant detail?

The accounts are daily-valued in the Relius ecosystem.

I guess in a narrow view, nobody HAD to explain it to the ER.  It's up to them to understand the plan document they are signing, and they are the ones (usually) tasked with operating the plan.

However, I'm guessing someone approached the ER about setting up the plan and steering them to a SH arrangement.  Whoever did that should have at least explained it to the ER the mandatory contribs and the conditions under which they would be made.

It's certainly possible that the ER just tuned out and/or only heard the PS part of the funding.  Or maybe thought the SH and PS were the same...

I guess they can remove the SH for '26 and just do ADP testing.  And tehy doen' even have to give refunds!  They can do a QNEC.  And guess what?  Those don't even have to go to those employed on the last day of the year either!

Did no one explain this to the client during plan setup?

Is there something in EPCRS that addresses the issue of an Employer mistakenly deducting (from a paycheck) and depositing Roth funds for a participant when the ppt's election was pre-tax?

In other words I would correct this int he same manner as in my example above, regardless of its relevance to catch-ups.

If they don't want to change their address, change it to mine.  I'll gladly accept the check...

In that book, in the bio, it mentions some all stars (Mike Preston, Larry Starr, et al).  And also the PIX message board.

Good times, indeed!

I was straightening some things up around my house this weekend.  Part of it involved moving some books from one bookshelf to another.

I came across Who's the Employer:  A Guide to Employee and Aggregation Issues Affecting Qualified Plans by S. Derrin Watson.

I hadn't picked it up in a long while and I was wondering just how old that book is.

Turns out, it's a second printing from 1998.  My boss gave it to me in like 2000.  She had another copy.  Maybe the second ed.?

I'm wondering how much has changed from 1998 to the current 8th Edition...

Is there a way to get the job listing posts out of my stream?  I find they are clogging up my feed.

If it's owner only, why not just add it anyway?

Then how/why were they reclassified as catch-up?

My understanding is they would have to go over:

Regular 402(g) limit.  Nope.

ADP limit.  Nope.

Plan imposed limit.  Nope.

Then why would they be 're-classified' as catch-up?

These are my understanding of catch-up rules.

21 hours ago, TH 401k said:

For the 2024 plan year, the owners contributed $7,500 as deferrals, which were later reclassified as catch-up contributions.

How did you do this?  Was there some limit they exceeded?

These days, for the most part, new plans must have an auto-enrollment feature.

But can the ER stop the auto enroll after a few years?  Or must it be in there forever?

Does Secure address that?

First of all it they terminate the 410(k) plan, the company cannot implement a new 401(k) plan until at least 12 months after the last assets were distributed.  So, there's a detriment right there.

What they could do is stop investment into the funds that have surrender charges and contract with another record keeper to offer a daily-valued, participant-directed platform (like Voya or John Hancock or Empower--just examples, not necessarily recommendations).  They liquidate and transfer the funds from the annuities to the new custodian as the surrender charges expire.

Don't confuse where the assets are held as being 'the plan'.  Assets can be moved from provider to provider, even the types of investments offered, without changing the underlying plan.  

Or, in other words, don't confuse a service termination with an asset custodian with a plan termination.

What is your role in this?  Are you in the retirement plan industry or are you just a friend asking on his behalf?

On 11/11/2025 at 12:10 PM, TH 401k said:

There is no profit sharing contribution. 

Does this mean there is no PS for the year, or there is no PS allowed in the doc?  I can probably count on one hand the number of 401(k) plans that didn't allow a discretionary contribution whether or not they used it.

I find it odd they have this question, but there is no question about Safe Harbor contributions yet.

Is the participant under/over age 59 1/2?

Refunds are not subject to the 10% penalty tax.  So if they are under age 59 1/2 it would be advisable to issue 2 1099-Rs:  one with code '1' and another with code '8'.

2 hours ago, Calavera said:

I would disagree with this. Callie completed one year of service at 1st second of 1/2/2023 and therefore cannot enter on 1/1/2023

I disagree back.  They complete the 1 YOS on the last second of 1/1/2023.

With the new rules, must plans allow all participants the ability to make Roth deferrals?  Or can a plan just have the Roth only for when it's required for catch-up?

And I'm not sure if there any disaster-related extensions, too.

How are fees losses?  They have nothing to do the amount the investments are worth.  

In Relius, if everything is entered correctly:  contribs, distribs, divs, fees, transfers, loans, the G/L for refunds treat fees as withdrawals.

What are the rules for the SMM?  I thought they only went to the affected participants.

For example, if you were adding a loan provision, you do not need to send it to terminated employees. 

Plan allows for 59 1/2 withdrawal but only:

 • the portion of your account being withdrawn has accumulated in the Plan for at least two (2) years

 What does that mean?  Up to the account balance two years ago?  Or everything now minus any contributions in the past 24 months?

For example, my account is worth $10,000 now but I added $1,500 in contribs in the past 2 years.  Two years ago, the account was worth $7,900.  how much can I take?  $8,500 or $7,900?

There's a question on the 5500-SF: Has the plan failed to provide any benefit when due under the plan?

If a plan did not process the mandatory cashout, do we answer yes?  

The 5500-SF instructions only reference RMDs.

But does it include other distributions?  Like the cashouts?  Or when someone requests a distribution but it languishes for some reason.