TPApril

Plan transferred its assets into a MEP by 6/30 of a calendar yr plan and is being merged into that plan. For that reason, the plan as it was is filing a Final 5500. Just wondering if the final 5500 would file as of 6/30 like a plan term that liquidates its assets, or 12/31 since it's not exactly a plan term.

Okay. Anyone else experiencing plan sponsors who didn't pay attention to guidance re their HPI's for 2026 contributions? Two situations: 1. Active HPI employee maxed their 401(k) already: Assuming their catchup amount will be converted as an in plan Roth rollover and 1099-R will be issued. 2. Terminated HPI employee maxed their 401(k) already and still has their balance in the plan: We can also do an in plan Roth rollover, but it seems that we can distribute it as a Roth distribution. Intent if distributed is to do so by end of year. I'm wondering if the plan can authorize this distribution as a fix, even when the terminee has not requested a distribution?

I've talked them out of it.

Company starts business 8/1/26. Two employees: Father and son On 9/1/26 they hire 4 unrelated employees. They want to start a new plan effective 1/1/27 and I'm thinking we can set Immediate Eligibility for anyone employed on 8/1/26 thereby excluding the other employees until 1/1/28 on semi-annual entry dates. This works?

Yes - we are doing DFVC. We are going to be conservative and report them as it would have been. Austin - My understanding on that is that once you have filed your late 5500's and filed the DFVC, you have 30 days to file the related 8955-SSA's by paper(!) and they qualify under the DFVC.

Plan has one HCE who is not an owner. ADP test failed and HCE received $15,000 in excess contributions. ADP test was rerun and determined that too much in excess contributions were distributed earlier this year (ie no 1099-R issued yet) and refund should have only been $10,000. HCE is happy to return the $5,000 to the plan in order to reduce tax liability. Earnings that were added on to the refund will be prorated and returned as well. Ultimately the 1099-R will reflect the lower amount.. I believe this is an acceptable correction, but not sure if we need to calculate earnings on that amount since it was refunded to include with the repayment..

Company never filed Forms 5500 and 8955-SSA since plan inception 5 years ago. Normally with 8955-SSA, a terminated participant from the prior plan year does not need to be reported if they took their full distribution before the 8955-SSA is filed (Ex, DOT=7/31/24; Distribution on 7/31/26; 2025 Form 8955-SSA filed on 9/10/26 w/out them). When filling out these prior 8955-SSA's, do we list terms as it would have been filed at correct time, or for anyone who has taken a distribution, can we leave them off entirely, rather than reporting them both as an A and then a D in a later year?

Last minute request to set up a retroactive plan. Upon requesting the Trust EIN, the site wouldn't process online so it will be done old school and they will mail out the EIN. Assuming the EIN does not arrive prior to contribution deposit deadline (10/15), if the actual trust account cannot be formally set up, can the deposit still be formally made?

But this is not necessarily the Plan's responsibility as they have no control over rolled over money. I believe the Plan needs to send a letter to the participant explaining that they must request such a distribution (in addition to explaining the situation and pending 1099-R's etc).

Upon review, an ADP test from a few years back (> 2) was determined to have failed. (Prior TPA never ran the ADP test). Both of the two HCE's have since taken full distributions as Rollovers, and both would have had excess contributions distributed. Earnings have been calculated on those excess contributions through actual distribution date. The sum of excess contributions plus earnings would not have been eligible for Rollover. So we are thinking there would be 2 sets of 1099-R's issued for that prior year: Amended 1099-R to reflect the lower amount that was eligible for Rollover New 1099-R to reflect the excess con + earnings that would have been taxable Just thought I'd see if there were any thoughts on this.

Ok, so, trying to do this the right way. Money with earnings has finally been restored to the plan. As a reminder this was a prohibited rollover distribution to an ira by an active key participant who was not eligible to take a distribution. 1. Transaction is reported on Schedule I 2. Schedule I has to check off yes to 4d for nonexempt transaction to a party in interest 3. issue a (first) 1099-R for prior year showing this as a taxable transaction, even though it was formally rolled over to an IRA 4. Prepare a VCP Here's the sad part, it seems this is taxable for prior year, I can't figure out how to get out of that since the employee is key. The amount taken out was over $1 million.

If I understand correctly, an existing plan established prior to SECURE 2.0 that moves to a PEP, and in the process terminates its original plan, still gets to grandfather in not requiring auto enrollment, assuming the PEP allows some plans to carry forward this grandfathered arrangement. On the same topic of auto enrollment and PEPs, a new small plan that would normally get a waiver from auto enrollment can still get that waiver in the PEP, again assuming the PEP allows for such flexibility.

One-person plan, employees are in a separate MEP. Owner withholds the max 401(k) once a year on his 12/31 paycheck which is cut every year on 1/5. The pay is included in wages for year ending 12/31. Turns out owner forgot to deposit the 401k for 6 months. Lost earnings was calculated and deposited Perhaps this is a longshot but if the 401k is not going to be deposited until the next calendar year no matter what, for Form 5330 purposes can it be considered late for the next year, or more likely since it is included in taxes for prior year filing, does it have to be in that year's 5330?

So things are different and you no longer file Form 5558 to file extension on Form 5330. Unclear to me that if you don't yet know the amount of lost earnings, how do you enter an amount to pay with Form 8868? Seems it does not accept zero.

We always file Form 5558 if extending a plan's 5500. However, sometimes, for a variety of reasons, a 5558 is missed, but it is confirmed that they meet the requirements for filing late under an Automatic Extension. I was curious if there is a trend to not file a 5558 if it is know the Plan Sponsor has filed an Automatic Extension and their fiscal year matches the plan year?