Lou S.

It doesn't sound like the plan needs to do anything. There are no other participants who may have gotten the wrong allocation percentage and you state the allocations are under the 415 limit so there is no 415 limit violation to correct. Probably want documentation in your files that the income supports the 415 limits. Assuming everything was reported correctly on the 5500-EZ what is there to correct? If they contributed more than 25% deductible limit in any years that's an issue for the accountant to address with the tax returns they are fixing and any 5330s that might be due for non-deductible contributions. If they wind up with a non-deductible carry forward, they should probably let you know so you can advise them properly going forward.

I don't see any problem especially if it was the employer who was in error on starting the payments.

What does your document say? I believe you can do a refund of 415 excess from the deferral for HCE# so they receive the full employer contribution or allocate the excess to all other participants in the plan who have not reached the 415 limit but it could depend on what the document says what options you have.

The recharterization on the 6/30/2025 test uses calendar 2025 catch-up is my understanding so if the plan allows enhanced catch-up I believe you can recharterize that as part of the correction if the participant is enhanced CU eligible for 2025.

You should check the Plan Document, but I believe when this has come up in the past the answer was almost always the Estate of the Primary Beneficiary who should receive the payment. But if you are paying it to an estate, don't you need the estate's TIN to issue a 1099-R? If there is a only $1,000 and there aren't a lot of other assets, it's possible that no estate was opened.

Multiple Employer Plan - a type of plan that covers 2 or more unrelated employers Types or MEP? are you asking the diffrence between a PEP and MEP? not sure what you are asking here. CG and ASG - see IRC §414(b), (c) and (m) CG is related employers, MEP is generally unrelated but may have members of a CG adopt. Unrelated and related generally defined by common ownership or not, though ASG can create related without ownership interests in some cases. Getting into all the testing is beyond the scope of answering. Yes there are lots of documents starting with the Internal Revenue Code and Regulations. If you are in an employer capacity I'd suggest seeking of a TPA who works with MEPs and CGs that help you, if you are in the field I suggest taking to you employer about resources to learn.

I see all the usual things you are going to want to check, 410(b) coverage, 401(a)(4) coverage, missed deferral opportunity, top-heavy minimums. And you are going to have aggregate those solo-ks with the employee plan for much of it. I think you might only be able to do 3% safe-harbor for 2025 and I don't think you'll be able to terminate and roll the solo-ks to IRAs due to successor plan rules. There may be other options but the cleanest might be to start a new safe harbor 401(k) retro active to 1/1/25 for the whole ASG - merge the existing solo-ks into the new plan either now or 1/1/26 - test all plans together - and give NHCE an additional QNEC for the missed deferral opportunity from 1/1/25 - whenever you can start deferrals under the new plan.

I'm not a CPA but form the company tax standpoint whatever will go on the W-2 will be what is deducted either as wages or contributions on the corporate tax return. Assuming you are now doing refunds instead of a QNEC to pass, the participants will receive 1099-Rs from the Plan for their refunds and that will have no impact on the corporate tax returns.

Stated another way - if you want catch-ups you have to allow ROTH; if you don't want ROTH you can't allow catch-ups.

https://www.irs.gov/retirement-plans/fixing-common-plan-mistakes-plan-loan-failures-and-deemed-distributions You could talk to the record keeper about paying for the cost associated with a VCP filing. It's possible in this case that IRS might even allow the loans to stand as is if most are to NHCEs and do not exceed the 5 year repayment period, the errors is shown to be the fault of the recordkeeper's system, and that future loans are limited to 50% of vested balance.

I agree that if it joined after Secure 2.0, then it does not meet all conditions and is not grandfathered.

When in doubt, I'd take the conservative route and file. Filing is easy even if technically not required, not filing is very expensive if you later find out it was required and you didn't.

If you meet the conditions of the part that starts "However...plan." than you can continue to be treated as a pre-enactment CODA, if you don't meet the conditions you need to follow automatic enrollment. Make sure you save all the documentation from the prior plan to substantiate you meed the conditions should a future IRS audit arise and they want to know why you aren't doing auto enrollment.

Check the proposed regs issued in January this year and Notice 2024-2 for additional details, but I think your answer is here.

What about getting the husband's written consent on the withdrawal? That would seem to be the easiest if the husband really is OK with the partial withdrawal. Otherwise, let the ERISA Plan Administrator make the call and they can consult with their counsel on the matter.

Check the plan document usually but not always there is language that addresses short plan years and what happens with accruals, if you have an adoption agreement/master text its probably in the master text somewhere. If if is individually designed I'm not sure where it would be. If you are deviating from existing plan terms, address it in the amendment but I don't see why it couldn't be addressed in either a single amendment or a series of amendments. If you are not giving at least a pro-rated accrual credit for the short plan year I'd assume you would want a 204(h) notice addressing the short year and I'd assume you'd have to pass 401(a)(26) on an accrued to date basis.

My understanding is the IRS position has been that this is a discretionary amendment that must be adopted before the end of the plan year to be effective for the current plan year. But maybe that IRS position has changed since SECURE or SECURE 2.0; if it has I would love to know that, as it could be a useful tool one day.

401(k) Plans, existing, new or converted have to comply with the LTPT rules.

If the Plan allows for expenses to be paid from trust, then I don't see where this sort of fee would be prohibited. I believe under PPA funding rules you would add the expenses into the TNC for the year but if you're over funded it shouldn't have too much impact on the MRC for the year.

It is Age AND Service, so September 15, 2025 is when they first meet both the Age AND Service conditions. The they will enter the first entry date after September 15, 2025. If it is calendar year plan with first day of plan year and first day of 7th month that would be January 1, 2026. edited to take into account David Rigby comment.

There are a couple of options - 1 The Plan pays the expenses, assuming the Plan allows for this and participant disclosures about fees are properly distributed. Have the Plan Trustee authorize this option in writing. 2 You request payment in advance from the Plan Sponsor (or directly by the business owners if a small business) before completing any work. 3. You hope you get paid by the bankruptcy trustee. 4. You resign as a service provider. I generally try 1 and 2 first and if that doesn't work, skip to 4. There may be more options but these seem like the 4 most likely and what decision you come to as a service provider is up to you depending on your level of comfort.

They would be participants unless the amendment also froze eligibility to new participants. But unless something odd happened like they got a reallocation of forfeitures they would have a $0.00 balance and as such would not count towards the 100 under the new 5500 audit guidelines.

1. Employer contributions don't increase or reduce W-2 wages but may be reported on the W-2 in the "other" box but are not required to be reported. 2 If their gross wages for the plan year were over the compensation limit last year, they are HCEs this year - similar logic for next year. Doesn't matter whether or not those wages are regular, overtime, bonus, prevailing wage, etc. and it doesn't matter if those wages are used for allocation purposes. You could see if the TPG election improves your testing results and makes some of them NHCEs even if they are over the comp limit.

RMDs from ROTH are no longer required so they do not satisfy the RMD requirements.

I think making a 401(k) Plan that over laps the 12 month successor plan rule is problematic. I think having 2 plans the 401(k) for the short plan year and PSP for the full year are fine, then merge the 401(k) Plan into the PSP would work. I have no legal support for this, just a conservative approach that I think might work so asking ERISA counsel might be prudent.