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If a 401k plan is terminating for example as of 5/31/25, all account balances are required to become 100% vested. But when do the remaining forfeitures have to be reallocated - is it as of 5/31 or can forfeitures remain after this date to pay expenses such as mailing fees, etc. It seems like they should go to participant accounts as of the termination date? Thank you!

Does anyone has experience with merging a non ERISA church 401k or 401a into a Non ERISA Church 403b plan? This is permitted under Code Section 414(z) as implemented by the PATH Act of 2015. I am interested in the mechanics of how to do this - lets say the 401k is the existing plan, but the Church wants to have non ERISA 403b plan. Would the client need a Board Resolution, along with a new 403b plan into which the current 401k can be merged? I believe there is a requirement that all accounts that are merged be nonforfeitable - i.e. fully vested. I realize there are no regulations on this issue to date. Any thoughts would be appreciated!

Thank you!

Is there any remedy if an employee states that they made a Roth election in 2024 by mistake and it should have been pre-tax? The enrollment system is online, so it is possible they mis-read the entry. I am aware of this regulation below that states Roth is irrevocable. But what if it was a matter of an online error? Can the plan sponsor direct the recordkeeper to move it to the pre tax source and then record the 2024 W2 correctly? The rules of IRS Reg. section 1.401(k)-1(f)(1) and (2) for designated Roth contributions under a 401(a) plan apply to designated Roth contributions under a section 403(b) plan. Thus, a designated Roth contribution under a section 403(b) plan is a section 403(b) elective deferral that is [IRS Reg. 1.403(b)-3(c)]: Designated irrevocably by the employee at the time of the cash or deferred election as a designated Roth contribution that is being made in lieu of all or a portion of the section 403(b) elective deferrals;

Yes thank you. I thought I heard that additional changes were made by SECURE 2.0?

Does anyone know if SECURE 2.0 made changes to EPCRS that can now apply to governmental and non-governmental 457b plans? Thanks!

That sounds good, thank you very much!

Hello - I understand that the IRS has a one-year rule where all assets in a terminating plan must be distributed within one year following termination. Is there flexibility here - for example, we have a plan that technically has made all distributions, but now we have received a few uncashed checks. We are getting close to the one year period - do uncashed checks count against this one-year rule and we could have a failed termination. It seems more administrative - now we have to search for the participants, and then decide what to do if the search fails. So again, we may go past one year. An attorney told me once that the IRS does not really take action against a plan if there is good faith efforts applied. Any thoughts?

What I want to know is if the IRA custodian reports that the taxable amount is not determined and it is up to the IRA owner to calculate the taxable amount using the pro-rata formula/rule - i.e. Total Basis divided by the balance in all Traditional IRA's/SEP/SIMPLE as of 12/31 of the distribution year = % x all IRA distributions = Tax Free amount and the balance is taxable and reported on the 1040. Or, does the IRA custodian do something else? Thanks!

We have a situation where force out amounts from qualified plans were rolled over to a non-Roth IRA and the rollover contained after-tax amounts and pre-tax amounts. When the IRA owner later takes a distribution, how does this get tax reported on the 1099? Thank you!

I am thinking it may be a Section 125 Cafeteria Plan issue - can an employee elect out of MERP coverage and elect for the employer contributions to go to his 401(a) account?

We have a governmental employer sponsoring a 401(a) plan that also has a MERP (tax advantaged plan under Code Section 105 (it may also be a VEBA). There are veterans (VA) employed who do not need health insurance from this employer. They would like to opt out of employer contributions to this MERP and have the employer contribute instead to their qualified 401(a) account as an "employer" contribution. What are the mechanics to do this, if possible? we can set up the 401(a) plan with separate employee allocations (and there is no IRS non-discrimination testing issues) but how do we go from MERP contribution to 401(a)? I have asked for the MERP document, but we do not have it yet. Any thoughts or experience from others would be helpful. Thanks!

Thank you for this!

That sounds reasonable thank you!

Can an ex spouse take a hardship withdrawal to buy out her ex husbands share of their primary residence home? thanks!

I am looking for the IRS requirement that the formula has to be stated in the plan document rather than just referenced? Here is an example below - Contributions under collective bargaining agreement, employment contract or equivalent arrangement. The Employer will make an Employer Contribution based on a collective bargaining agreement, employment agreement or equivalent arrangement as follows: [Note: Insert the appropriate contribution formula (and allocation formula, if applicable) from the collective bargaining agreement, employment agreement or equivalent arrangement. The formula must be definitely determinable. Alternatively, the Employer may attach an addendum incorporating the collective bargaining agreement, employment agreement or equivalent arrangement. ]

I am talking about writing the CBA formula, for example a 10% employer contribution, into the plan document, rather than just reference the CBA like you could in cycle 2 DC and cycle 1 403b. Is there any IRS guidance on this change?

Does anyone know if there is an IRS Revenue Procedure that requires cycle 3 DC plans and Cycle 2 403b plans to hard code the CBA language into the plan document? I know it is in the pre-approved document but trying to find a cite as to why it has to be. Appreciate any insight. Thanks!

Great information! Thank you both.

We have a plan with a plan year that ends 6/30. This year 6/30 is a Sunday. The contributions has a last day requirement. Would 6/28 Friday be the last day in this situation? This is the last pay date in June. Thanks for any help.

Let’s say company A is a related and participating employer in Plan X which is a safe harbor plan with the basic match formula. Company A is purchased mid 2024 in an asset sale so all employees will be terminated from Company A. They have a distributable event. If the buyer has their own 401k plan that is not safe harbor, are there any spin off options mid year for that portion of Company X plan that is attributable to employees of A? Do we have safe harbor concerns where we should suggest a spin off as of end of plan year in order to not violate 2024 safe harbor status. Thank you for any comments!

I have a question in the M&A context - company B will be purchased by company A on 5/1. Company B has a non-safe harbor 401k plan and company A has a safe harbor plan. What are the options mid-year - can the non-safe harbor plan be merged mid-year into the safe harbor plan? I would think best practice is to use the IRC 410(b)(6) transition period at least through end of the 2024 plan year and then merge at end of plan year? Or freeze plan B, allow employees to join plan A and merge at plan year end. Any thoughts?

That is a concern. As a practical matter, what are practitioners doing? It seems this would be coming up alot now with all the M&A activity.

Does anyone agree with my last comment - that it is ok to cease participation in a safe harbor plan mid year? Thank you!

The 401(k) regulations - 1.401(k)-1(d)(6) Example 2 - do allow a PE to cease participation in a 401k plan. But they are silent about a safe harbor plan.