Tinman

I'm newer to the MEP/PEP space, but I'm seeing this happening constantly - wondered how common it is and what people normally do. An adopter moves from one PEO MEP (MEP A) to another (MEP B), effective 4/1/26. They had changed their PEO provider in November 2025 so had to make the switch. Their new PEO provider continued employee deferral withholding during the interim move from MEP A to MEP B. With the effective date of the adoption with MEP B not being until 4/1, these deferrals were sent MEP A to be deposited into employee accounts. MEP A would not accept these contributions, so the PEO has just been holding on to these contributions for months. My thought is that they would need to return the deferrals withheld between November and the effective date of the adoption into MEP B - is there any other alternative?

Would love an opinion on an issue with a panicky plan sponsor: 😄 Recordkeeper paid advisory fees to a financial services company for the first three quarters of 2025. The financial services company paid the advisor fee to the advisor for the plan. Advisor left the service of the financial services company in Q4 of 2025 and moved to financial services company #2. Plan Sponsor and financial svcs company have a dispute and financial services company agrees to refund advisory fees for Q1-Q3 2025 ($6500) Here's the issue - financial service company made check out to the plan sponsor's company, not to the plan. Plan sponsor then deposited the check into their corporate bank account. Do we have a prohibited transaction situation? Or can the money just get pulled from the corp bank acct, put back into the plan (participant accounts) and document what occurred in the plan records and move on?

Can a sponsor "convert" their SEP from Form 5305 to a prototype document governed SEP?

I have a city that is considered a second-class city in Nebraska (doesn’t have a population of more than 5k). They currently have a City Employee plan, Police Officers plan and a Firefighters plan. In Nebraska second-class Cities are not required to have separate plans for these different types of employees. That being the case, they would like to combined these three plans into one plan, having all current and future employees in the City employee plan. For the Fire plan, there’s no longer full-time firefighters, it’s a voluntary department now so no new contributions in that one - only balance is for one retired firefighter. There are police officers employed but they are getting the same contributions and vesting as the City employee plan. I am newer to govenmental plans - are there any issues with merging these three plans I should be aware of? A provisional comparison shows very few differences and they have already determined they would go with all the most lenient of the differing provisions. What other issues should I be aware of, if any? Thanks!

Thank you both for your response - I am aware general testing applies, I guess I was wondering what else might need to be looked at, if anything.

Below is the allocation formula for a profit sharing only plan provided to us by a plan sponsor. The tiers are based on job classification. The Tiers range from Tier 1 = trainees to Tier 9 = those who report directly to the board of directors. What testing is required here - general testing?

2007

Detail: Traditional 401(k) plan that's been in effect since 2006. For the first year, the plan was filed using the correct EIN. The following year (and each year since) the plan was filed using an incorrect EIN (off by one number). They even received a delinquent filing notice from the IRS back in 2007 due to the incorrect EIN situation. What would be the correction here? Would the plan need to: 1) Amend all 5500s back to 2007? If yes, how would the 2017 filing be handled? Would they need to indicate a "change" in Q. 4 on the Form 5500, indicating a change in the name and/or EIN of the plan sponsor? (4 If the name and/or EIN of the plan sponsor or the plan name has changed since the last return/report filed for this plan, enter the plan sponsor’s name, EIN, the plan name and the plan number from the last return/report:) 2) Just indicate the "change" in Q. 4 and move forward, not amending any past filings? 3) Any reason to use DFVCP in this situation? Any other thoughts/suggestions would be greatly appreciated!!

I'm having difficulty finding any guidance on this - we have a 401(k) plan with an automatic enrollment provision (ACA) and the client did not provide the required notice for the past two years. They have been operating according to the provisions in the plan document, they just neglected to provide their employees with the notice. Is there a "correction" for this? Maybe anyone that was auto enrolled would need to be given the option to remove their funds?

Agreed! Great information provided - and appreciated!!!

Thanks, all!

We currently use our normal DC document and it is silent as to the specific rules regarding a one-person 401(k) plan. We have just discovered the owner's daughter works at the business on a part time basis but has never met the 1 year of service eligibility requirement. Does this throw the plan out of "solo-k" status, causing a 5500 filing, testing, etc.? Or because she is part-time/seasonal and never works more than 1000 hours during the plan year, is that solo-k status retained? Thanks!

There is not a separate trust document in this case.

Here's what the BPD states: 8.1 AMENDMENT (a) General rule on Employer amendment. The Employer shall have the right at any time to amend this Plan subject to the limitations of this Section. However, any amendment that affects the rights, duties or responsibilities of the Trustee (or Insurer) or Administrator may only be made with the Trustee's (or Insurer's) or Administrator's written consent. Any such amendment shall become effective as provided therein upon its execution. The Trustee (or Insurer) shall not be required to execute any such amendment unless the amendment affects the duties of the Trustee (or Insurer) hereunder. That leads me to believe that ALL trustees would need to sign (if the amendment is something that affects their duties) - would you say I'm interpreting that correctly?

Trying to find some concrete specifications on this - if a plan has three trustees and only one has signed the PPA document by April 30, 2016, is the plan considered executed? Or do all three have to sign before the document is considered compliant?