Lou S.

assuming it is a DC plan and the participant died before RBD since the spouse is the beneficiary, the spouse should be able to roll to her IRA at treat it as her own and not an inherited IRA.

If you elect the 4% SF nonelective up to the last day of the following plan year, you are a SF for the year. So if that is the only employer contribution you are deemed not top-heavy. Though you would need to make it to all eligible (though I believe you can exclude HCEs still), not just the deferring because you can't add a retroactive SF match.

Yes. Just test it for BRF to make sure it does not favor HCEs and you should be fine if the amendment is drafted correctly.

If they are a controlled group, and it sounds like they probably are, one Plan would be the simple straight forward approach. You can do a 2nd plan but you'll need to test the whole group as one employer if they are a controlled group for both Non-discrimination and BRF.

I would disagree as failure to allocate the SF match is a failure to follow the terms of the Plan document is both plan qualification issue and calls into question whether you even satisfy the safe harbor rules for the year. While correction of 415 excess is address in the EPCRS procedures.

https://www.irs.gov/pub/irs-pdf/i1099r.pdf Look at the "Failed ADP Test After Total Distribution" on page 8 of the instructions. I would follow a similar approach for the failed 415 test in this situation mirroring IRS instructions. Though I think that would only apply if part of the prior distribution is recharaterized as not eligible for rollover. I think if the prior rollover did not include any amounts that were over the 415 limit and the excess is ONLY due to the additional safe harbor match, they I could do 100% of the 415 refund out of the new safe harbor match deposits. Those would be refunded to the participant as taxable, not eligible for rollover and with I believe Code E on Form 1099-R. It seems the cleanest and easiest. Though again I'm not sure if that is 100% technically correct, especially if conflicts with the Plan's operational ordering rules on which funds to refund first to satisfy 415.

I would fund the SHM, I don't see how you don't. I'm not sure if this correct solution but I would not have a problem refunding 100% this as an excess annual addition. Now if you are still over the 415 limit and there is no money left, looks the instructions to Form 1099-R under "Refund After Total Distribution", depending on when the withdrawal occurred you may have to do amended 1099-Rs and you will need to notify the participant that some will need to be withdrawn as an excess IRA contribution.

Read the Plan document to see if has ordering rules. Though if they already took all their money out and this will satisfy the refund I don't see why you couldn't use it? But I'd probably document as "administrative procedures" in case this comes up again you can do do the same documented fix.

Yes it needs to pass ACP on after tax that's why it doesn't typically work in the situation you are describing. The QNEC to the employees would be fully vested and be pre-tax employer contributions to the NHCE employees unless the plan has a ROTH employer contribution feature and the employees elect to be taxed on it and receive as ROTH. But if he's looking for ROTH contribution, why not just tell him about the option make the employer contribution as ROTH under Secure 2.0 and go with the original design and have him elect to take his employer portion as ROTH instead of pre-tax and the Plan sends him a 1099-R for the income? What you are describing would likely need something on the order of an 8% of pay fully vested QNEC to the NHCEs to pass ACP assuming his after tax is $35K on $350+K salary where he's the only HCE and no NHCE makes after tax contributions.

I don't see any problem with what you are saying. The SB will report the name of actuary and company signing the SB, which software you use to file the form doesn't matter.

I'd be more worried about the participants being made whole than where the funds come from. That seems like a tax deduction matter the accountant can handle. Is business A a corporation, partnership, sole-proprietor or other?

If they want to process it have the Trustee certify he's dead and release you from any liability for processing as a death benefit payment or provide a death certificate.

Do one VCP to cover both.

What does the DC plan say? Does DC plan give 5% or does it give leeway to do 3% if DB is frozen and no accruals?

Yeah that's how it works. You fresh start it and use the 133 1/3 accrual rule going forward.

You can do it, just know the plan (and that probably means you) will need to do the 1009-Rs for all those who elect.

It seems like you might have leeway for the Plan Administrator to make a reasonable judgment on conflicting plan provisions and treating the Loan as an offset would be the most reasonable in my opinion.

Typically it is done with a fresh start.

And if they want to reverse it because they found out it is a taxable conversion, they are out of luck because you are no longer allowed to unwind them. They are now irrevocable.

If it was done in 2025 you'll have a 1099-R at year end. If you are reconciling 2024 and they are just telling you about this now, they need late 2024, 1099-Rs and possible amended tax returns if they already filed. Gotta love clients that rely of Google for their plan advice instead of making a phone call to the consultant who probably knows the correct answer, even if it's not the one they want to hear.

It seems like a poor design between the loan program and distribution conditions. Can the plan be amended to allow loans to be offset immediately on termination if not repaid in full? That would seem to solve a lot of potential issues as well allowing the participant Qualified Plan Loan Offset treatment for the loan instead of the less favorable Loan Default rules and the plan is going to going to have to issue a 1099-R one way or the other anyway.

I agree, seems like it should just pass on accrued to date, at least for 401(a)(26). Have you asked Datair why they don't think they are benefiting for 401(a)(26)?

I have used penchecks and Employee Locator https://employeelocator.com/ Both were inexpensive, easy to use, and provided quick results. I found the information provided by Employee Locator more through and complete as they provided possible phone numbers and e-mail addresses as well as past address of the participant in addition to a current address. But it's still sometimes hit or miss if the addresses either place provide finds the actual participant. The last participant we searched for wasn't at the address that either company provided. I get no referral fee from either, just giving you my feedback.

Not to my knowledge. I believe in the old days, once you reached the old $100,000 threshold you were required to continue even if assets dipped below $100,000 in a future year. But I don't think filing a form that was not required locks you into having to file in the future. I believe that was changed when they raised the threshold to $250,000. The exception being the final year return which is required regardless of assets. If the client gets a letter from the IRS requesting the form, they should simply respond Form not required assets under $250,000.

Does he receive a W-2 or K-1 from the firm as a partner? If no, it sounds like he is no longer an employee and would require an RMD by the recently past 4/1/25 deadline.