Lou S.

I thought if your plan allowed catchups it was mandatory but if your plan doesn't allow any catchup it was not. Do I recall that wrong?

Did the amendment replace the current match with the safe harbor formula or did the amendment add a safe harbor match, on top of the existing formula? If it's the former as Towanda implies, then I would agree with their fix. If it's the later, I don't think you could removed the additional fixed match for 2024 without jeopardizing SH status since it would be a mid year reduction. If the communications to employees and company minutes all reflected the intention to switch from the current match to the new enhanced SH match, I think it's something that you could correct though VCP. Oh and I think you can clearly remove either match for 2024 prospectively, it's just that you will lose SH reliance for 2024 absent some IRS blessing which is where I think a VCP submission would work. Though the cost of VCP might be weighted against the cost of providing both matches for 2024 and amending out the fixed match for 2025. And losing SH status may or may not be a big deal for them in 2024 though since they just added SH, I'm guessing testing has been a issue in the past. Maybe others have different thoughts.

I fixed match required by the document can exceed 4% of compensation and still satisfy ACP if it meets the other requirements in the code. It's a discretionary match that can't exceed 4% of compensation and still satisfy ACP.

That would be a per payroll match, no?

Most but not all plans will allow for in-service distribution at NRA and in many cases earlier (such as 59 1/2). But not all plans do, so as ratherbereading says - RTD

Return the over payment to the participant.

Yes for startups, I agree - that you're probably looking at the same min max with that interest rate projection for 1st year on a CB plan.

Try IRS Notice 2024-2. IRS provided guidance for employer ROTH contributions and the reporting of such among other things in that Notice.

I don't think you are missing anything. With the cushion, I don't think min and max will always be the same but yes you will have situations where the max deductible is driven by the minimum required. I haven't read the preambles to the regs, but I'd be surprised if there was much thought given to this directional change in interest rates back when they were issued.

See the rules for testing age under 1.401(a)(4)-12.

I'm sure there are some experts here who have a much better understanding of this than I do, but my understanding is the same as yours. That is finalize the divorce, or get the spousal consent if you want to remove the spouse as beneficiary before the divorce is final. It might also be possible to remove him via QDRO but that's above my pay grade.

It sounds like you are TPA to the Doctor's plan, I would recommend the Doctor engage his own ERISA attorney to review the matter and see what needs to be done. Which may or may not involve a VCP filing for 2023 and or 2024 to get the IRS blessing on any fix that may be required.. I will say "I didn't read the document I signed and didn't understand what it does" is probably not going to be the best defense for Doctor A, but then I'm not attorney so don't construe this as legal advice.

Sounds like ERISA counsel should be involved. As to 3, you have an ASG so the Plans are going to need to pass testing as group and that may or may not be problematic for Plan A, the Larger Plan, or both.

If the plan allows for After Tax Voluntary Contributions, ROTH 401(k) and In plan conversions/rollover provisions to ROTH, then yes. After Tax Voluntary are subject to ACP testing so if the Plans has any NHCEs that are included in testing you will probably have a testing issue that will make this impractical but if these plans are HCEs only you should be good.

1 - the first time home buyer of $10,000 refers to the exemption to the 10% penalty on early distribution. However to my knowledge that exemption only applies to IRAs, not qualified retirement plans unless I missed a law change. As to the amount, it is the amount to meet a heavy and immediate financial need and is not limited to $10,000. 2 - The Bipartisan Budget Act of 2018 allowed for the expansion of safe harbors for hardship distributions to allow among other things, post 1989 earnings on 401(k), safe harbor funds, QNEC/QMAC as eligible for hardship. This was an elective provision and required an amendment to the Plan's definition of eligible hardship to include them. 3 - As far as I know unless the Plan document limits it or it is an unusual situation like money purchase or target benefit money.

In this particular case it sounds like there were multiple other factors contributing to pursing this charge in addition to others. I feel it is unlikely the IRS will challenge most self certification by the participant unless it is egregious if that is the only issue. Though as LANDO points out, if the IRS discovers it on a tax audit the IRS might strongly pursue the penalties and interest for under reporting if they feel the 10% penalty should also have applied. Since participants were given a 3 year window to repay CARES act withdrawals as a rollover, I wonder if the IRS position would be more or less severe if the withdrawal was repaid and the IRS determines that the initial distribution did not qualify? That is would they also try to disqualify the subsequent rollover repayment? Thinking back to 2020, I would hope the IRS would rely on the participant self certification absent clear and compelling evidence that the participant fraudulently self certified.

That's a pretty broad open ended statement that doesn't really let us know the extent of your assistance, involvement, or service contract. Some of the steps you may or may not have been involved with assisting them could included any of the following: Amendments and resolutions to terminate the Plan and bring it into compliance with current law. Preparing and/or distributing notices and withdrawal packages to participants. Search for lost/missing participants. Assisting with processing the payments to participants and disposition of assets for lost/non-responsive participants/closing of the trust. 1099-R processing and filing for participant distributions. IRS nondiscrimination testing for the final year. Preparation of final year Form 5500 Submission of the Plan to the IRS for Determination Upon Plan Termination. If it was a DB Plan there are host of other things you could have assisted them with ranging from selecting annuity provider to PBGC termination processing. And I'm sure I missed a few in this brief overview.

You can give them the guidelines on Plan permanency rules and let them make the decision if they want to implement a plan and what kind. Then you as a service provider need to decide if you are comfortable with providing administration for the decision they make or direct them to seek other service providers. While the IRS views any plan in existence for 10 years to be permanent, plans can (and do) terminate in shorter time frames but it would be a facts and circumstance determination whether the IRS would view the Plan as qualified or not based on the Plan permanency rules. Based on your facts, I agree with you that this seems to fit well with in the regs of a plan that is NOT intended to be permanent but I've certainly seen plans over the years, even ones that have gotten DLs on termination, (though not for many years) that fit your fact pattern and i have not yet seen the IRS come to disqualify one. Though that is purely anecdotal and I am not suggesting you propose audit roulette to the client, just an observation. Interestingly I don't think the Plan permanency rules apply to SEPs so that might be an alternative for them if demographics work if you and/or they are not comfortable with the risk of a qualified plan

I agree.

I think this would be question for the court to determine. I could see several interpretations and I'm not a lawyer.

I somewhat agree. I think for 2024 they would still have the quarterly deposit requirement on the match for 2024, but that this amendment would not be a cutting anyone's benefit as it's making sure everyone gets the annual safe harbor match so I think the amendment is allowable if they follow the deposit timing requirements of the per payroll match rules.

Sounds like question for an ERISA attorney since the then management regs were proposed in 1987 with no reliance and withdrawn in 1993 as though they had never been issued. I'm sure they'll get around to updating them "soon".

Did she have the 15 years of service? If so it sounds like she would qualify for the ER benefit and that it's a question of getting the Plan Sponsor who terminated the plan and transferred liabilities to the Insurance Company on the same page.

If it's eligible for rollover then mandatory 20% withholding applies. I'm assuming the participant has an in-service distributable event under the terms of the plan. If it's a hardship withdrawal, that's not eligible for rollover. I believe the presumption on those is 10% federal withholding but a participant can elect a different amount even 0% on form W4-R. As for timing and submission of withholding see ESOP's link. edited for Bill's correction.

The NEC does not have a limit other than those mentioned by belgarath. The safe harbor match has limits some of which are tied to not matching on deferrals above 6% of pay. But outside of 415 I 'm pretty sure a if you want a match something like of 400% of the first 6% that would still qualify as a safe harbor formula.