TPApril

I can't recall if there is a timing restriction for switching a plan's ADP/ACP test method of using current or prior plan year. eg can the selection be made prior to the end of the plan year for the current plan year?

Plan Document for 401k Plan was created in the name of the now prior TPA. New TPA uses the same platform/vendor for said Plan Document. Can Plan Document be amended using existing Plan Document either of the following two conditions: New TPA has its documents under its name New TPA does not have its documents under its name Note: Plan Document is going to be amended in full under new TPA, but certain errors in original TPA document need to be corrected retroactively, and trying to determine best approach.

When a plan allows for in-service distributions, and the owner participant has already taken their RMD, the additional distribution is subject to the mandatory 20% federal tax withholding. Is there an exception that if you are over RMD age, the additional distribution is not subject to the 20% tax requirement?

Let's say a plan charges a distribution fee of $100. All terminee account balances under $100 are to be forfeited. I'm curious if there's a trend to actually use a higher forfeit de minimis amount, say for those balances that are just so minimal yet over $100. For instance, if the account balance is under $120, rather than create IRA's of $0 - $20?

Not the most important question - but sometimes plans come across my desk where the plan name seems to be exactly the company name, as confirmed not just on the 5500 but on the plan document. One I just saw has simply '401k' after the company name without 'plan'. I guess there's no requirement that the word 'plan' be in a plan name, but it does seem odd to me.

What I see as the payroll issue is not related to administration of loan payments, but rather administration of the match, wherein the match is calculated along with payroll, for periodic deposit along with the 401(k). My initial thought was that a participant can present the terms of their loan up front, say with a statement showing that loan payments are being currently made, including the loan payment amount and amortization period. I think what I'm getting is that the participant really has to present after the fact, ie after eoy, what the loan payments made were so that the appropriate match can be made at that time. It does lead me to another question - does it matter if a participant pays more principal than just what is amortized during the year?

with credit to Mercer at https://www.mercer.com/en-us/insights/law-and-policy/secure-2-0-student-loan-match-101/: maybe it can't be made on a payroll basis...

With this effective 1/1/24 and I think limited guidelines on how to enact this, I'm thinking that it can be administered as follows for a plan that deposits match on a payroll basis: Participant provides a recent statement of the loan showing payment amount, and amortization schedule, or length of payment plan Payroll then treats equivalent payment per payroll (loan pmt x 12 / (24 or 26) ) for standard payroll schedules. Payroll then sums up 401(k) + equivalent loan payment and applies match formula on payroll basis. Note these are just initial thoughts.

Okay - Not experienced yet enough with Cash Balance Plans. Just making sure - aside from using the Comp Limit, is there a limit on the amount of 'contribution' shown on a Cash Balance Participant Statement? I think not.

I really don't know. I was thinking 0. I don't have the data yet (not our plan). I do know there was no specific special entry date at plan inception. If there were actually less than 120 who were considered eligible based on eligibility requirements at 1/1, can we get away with combining first year audit with second year audit?

New Plan: Adopted 5/1/22 Effective 1/1/22 401(k) and Match only as of 7/1/22 No Employer Contributions which are allocated based on the 1/1/22 date Participants with Balance Count at 12/31/22: 150 I believe that they do not qualify for any of the exceptions to filing as a large plan with a set of audited financial statements, but curious of other thoughts. Short plan year exception - although the plan only had contributions moving forward during part of the plan year, the plan was declared effective as of 1/1, so no exception here Over 120 - There were more than 120 participants at eoy, so no exception

401k Safe Harbor Plan is effective 1/1/22. Plan deposits 2022 Safe Harbor in 2023. Plan pays fee for 2022 in 2023. Understanding that the 2022 contribution applies to 2022 taxes, I think the fee paid in 2023 applies to the 2023 taxes, but wasn't sure. I'm even more confused about which year the Contribution credit for the safe harbor would apply to - 2022 or 2023 taxes?

I'm just curious the trends for auto enrollment between ACA, EACA and QACA? Are there many participants that take permissible withdrawals?

New Plan Sponsor has joined Controlled Group which includes many 5500-EZ filings (legacy style perhaps). Although the new Plan Sponsor has assets under $250K, they must file due to the Characteristic Code 3H situation. The other 5500-EZ's are filed on an accrued basis. So here's the question - EOY had zero assets (cash basis). Contribution was made after EOY. Need to file for prior year, or just wait until the current year ends?

new plan in need of a cpa to prepare financial statements for past couple years as plan was not aware of this. seems that no local firms have capacity to take what I think is a pretty good revenue raising opportunity. curious if there are more national firms that might be a better fit? they understand they will not be filing 5500 for this last year on time.

the age old question - file an incomplete 5500 without a set of audited Financial Statements, with intent to file amended form later? plan in question - has never filed 5500, multiple years as a large plan. None will be ready by filing of currently due 5500. I'm thinking don't file, and file the sum total when ready and submit under dfvc.

I have a different understanding. A 5500-EZ eligible filer in a controlled group does not get an out if assets are under $250K and must still file the EZ For clarification, it is combined assets you are looking at. It is quite possible the individual filer must still file EZ even though that one plan has assets under $250K.

I'm curious, for plans that set up auto enrollment, is this generally set up with immediate entry, or a longer period, say 3 months? Do participants feel like they are getting a pay decrease when this happens?

Professional office with a 401k safe harbor cross tested plan is being sold to larger company, with sale date set for 9/1. All employees will become part of purchasing company with immediate participation in new owner's 401k plan. Both plans are calendar plans. The plan itself is not part of the sale and is intended to be terminated, rather than merged. Both plans also have 1000 hours and last day worked requirements. So there will be no employer ps contribution in seller's plan since no 12/31 eligibility, though they will be making their 3% safe harbor. The new company (I have not seen their plan doc) has informed their intent to provide a ps contribution based on 9/1-12/31 compensation, honoring hours worked all year, but not pay. How is this usually resolved that there seems to be no PS contribution for 1/1-8/31? I note that this info has been provided to my company, we have not been involved in any discussions until now.

I understand the missed deferral is treated as a QNEC. I'm unclear if that is just from the ER's perspective and it needs to be deposited into a source named QNEC, or can be put into the 401k source, since it will be 100% vested there etc. Also, the missed match, I think it can just be deposited into the match account, not a QNEC account. (Lost earnings included in above).

When a plan designates someone else such as the custodian of the assets as a directed Trustee, would that entity be the one signing plan documents as Trustee, even though the Plan Sponsor/Administrator theoretically still also has the additional role of Plan Trustee? Or am I just too confused here?

Participant hasn't terminated and remains on the books but only does minimal consulting some years. He hasn't earned over $1000 for over 5 years, so clearly hasn't worked at least 1000 hours in that long. But he does defer 401(k), even when he only works one day in the year. Would this participant continue to be considered active and therefor share in top heavy minimum for the years he does receive some income? (Plan has just become top heavy).

That's it - so no issue then for plan that offers other employer contributions than safe harbor.

My memory is failing me here. I recall that 401(k) and safe harbor plan eligibility are best kept with the same eligibility requirements. I can't remember the drawback to having them different.

Sending it all to PS to a nonvested terminated ee/participant is then essentially a contribution to the forfeiture account, though I know it must go through ee account.