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Thank you BG5150. If I could also ask - the sponsor would rather not have to redo the 2025 W-2s and is asking whether the particpant could just list the refund as income elsewhere on their personal tax return. Do you know if it can be done that way?

An employee was permitted to defer in 2024 prior to her actual date of participation. The trustee did not want to retroactively amend the plan to allow her to be a valid participant when her early deferrals were made, instead the early deferrals were refunded to her in 2026. The document does not address the remedy for this situation. I'm guessing the refunded deferrals would be included in her 2026 W-2 - would a 2026 1099-R need to issued to her for this refund? All help is appreciated.

My first concern would be whether this is even allowed on a retro basis at all since it's a matching contribution, the reasoning being that maybe more participants would've deferred, or perhaps the ones that did would've deferred more had they known of the higher match.

I've been finding contradictory info about whether or not such a notice is needed in my situation. An employee's date of entry was 1/1/26, but he was not informed that he could start deferring at that time. The employee has yet to complain to the employer about this - it was the employer who caught this error. The employee will be permitted to begin deferring with the first payroll period ending after 4/1/26. This should suffice for reducing the QNEC for the MDO to 0%. The plan does not have any autoenrollment features. Some sources say an MDO notice is still needed, some say it is not. I'm leaning more to the 'not needed' side, especially since the employee has not brought up the discrepancy - is this the way to go? Any help is appreciated.

A plan has a 100% match on the first 6% of comp. If I recall correctly, a formula can be considered safe harbor if you contribute a match only based on the first 6% of comp, but only if that amount is less than 100% of the first 4% of comp. That would make this match on the first 4% of comp safe harbor, and the match on the next 2% a fixed non-SH match. Since there's a portion that's non-SH, the plan would be subject to ADP and ACP testing - do I have all of this correct? Would the ACP testing be done using the entire match or only the non-SH portion, i.e., the amount based on the 4% - 6% of comp? Thanks in advance for any assistance.

IMO it would not qualify as a casualty loss.

Yes, I would imagine the participant would get an SH match. However, would the match be based on the amount that would have been deferred had deferrals occurred when they were supposed to, or would it be based on the the QNEC amount? If matches are made every payroll, for example, it would make sense to base the match on the QNEC amount to account for lost ROI, but if the employer normally contributes the whole match for the plan after the close of the year, then it may suffice to base it on what the participant's originally intended deferral would have been. Just thinking out loud and would be curious what the prevailing opinion (or regulation) would be.

Yup, I got it confused with the autoenrollment rules - thank you both.

A PSP that was set up many years ago is now being amended into a 401(k) plan. Once this occurs, does it have to include LTPT employees or is it excluded from this requirement by virtue of the fact that the plan has existed for a long time?

A plan sponsor wants to change their traditional 401k plan to a safe harbor plan but are concerned about their contribution obligations should they suffer a down year or two in the future, so they are leaning towards a matching SH design. I've heard that a safe harbor 'maybe' notice can only be used when the 3% SH nonelective contribution is being provided, whether the plan is a QACA or not. One of their advisors, however, is insisting that you can use a 'maybe' notice for a SH QACA that provides matching contributions only, but this didn't sound right. As I'm thinking it would be hard for participants to decide how much (or if) to defer if the employer can just rescind their offer for a match at any time during the year, I have to ask - am I correct to believe that the only type of SH plan (QACA or not) that can issue a 'maybe' notice is one that provides the 3% SHNEC? Thanks in advance for any assistance.

Belgarath I have the same experience as you - even when we were required to just send them out once every three years, we did it annually. It was done a little out of habit and a little out of realizing how if we were participating we would like to receive at least an annual update of our benefits. And it probably prevented quite a few participants from asking "Why haven't I gotten a statement in years? What? Once every 3 years? That doesn't sound right - show me where it says that."

Does the QRP still have a suspense account balance? If it does I believe you would have to reallocate it at least ratably over a total of 7 yrs, which would count towards the annual addition limit.

Two cannibals are eating a clown. One says to the other: "Does this taste funny to you?"

I would much rather prefer the doc define NRA as at least age 62, even if the current NRAs for the partners is at least 62 using the definition the doc has at this time.

Form was filed a few months late but no correspondence has been received yet from the IRS. Although it's my understanding that penalty relief can be applied for even after the IRS has sent a letter assessing penalties, there always exists the possibility that the DOL may instead send such correspondence, at which time the option to obtain penalty relief disappears. As such, it would appear that the best approach would be to file an amended return at this time (i.e., before the feds contact the client) via the IRS penalty relief program for EZ forms - agreed? Thanks in advance for all assistance.