Belgarath

A lot of 403(b) plans are governmental. Previously, they could have a discretionary match with almost no restrictions on who, when, how much, etc., since there isn't any nondiscrimination testing. Now that it is more restrictive, for a governmental plan, is there anything wrong with using the nonelective contribution, with everyone in their own group, and "coincidentally" the only people who get a nonelective are those who deferred? Smells funny, but would be easy to do...

Thanks all. No, I would never even consider giving a client an opinion on something like this. We make sure we get the answer IN WRITING. I expect they are going to take the approach (rightly or wrongly) that there is no CG, but we'll see. I just wanted to have some notion of the issues at hand.

I don't really understand the intricacies of "private equity platforms." Let's use the following description as an example. Acme Capital Partners manages a middle-market private equity platform. The team has invested capital in a broad spectrum of industries for over two decades. So, if Acme buys a company or companies, wouldn't this constitute a parent-subsidiary controlled group? Or, do they not actually OWN one or more companies, but just provide capital? Or maybe both?

Elon Musk.

Why couldn't he contribute as normal pre-tax, then immediately do an in-plan Roth rollover? Maybe easier than messing with the employer contribution as Roth?

Filing Authorization For the 2024 Form 5500 Name of Plan: EIN / PN: Plan Year Ending: December 31, 2024 PART I Authorization of Practitioner to Electronically Sign and File I hereby authorize XXXXXX to electronically sign and file the above-named return/report through EFAST2. I understand that in granting this authority: • I must manually sign and date page 1 of the Form 5500 and provide a scanned copy of that signature page to XXXXXXX before the electronic filing can be initiated; • XXXXXXX will retain a copy of this written authorization in its records; • XXXXXXX will notify the individual(s) signing below as plan administrator/employer about any inquiries and information it receives from EFAST2, DOL, IRS, or PBGC regarding this annual return/report; and • A copy of my signature, as it appears on page 1 of the Form 5500, will be included with the return/report posted by the Department of Labor on the Internet for public disclosure. • XXXXXXX shall not be deemed an administrator or other fiduciary with respect to any Plan solely on account of the services performed under this authorization. This authorization is applicable only to the filing for the above-named Plan and applies only for Plan year end stated above. Plan Administrator: ___________________________ Date: ____________ PART II Acknowledgement of Receipt of Authorization On behalf of XXXXXXXX I hereby certify that the firm will use the authority granted only for the express purposes described above; that the firm will not disclose confidential information to any parties other than the DOL, as required for EFAST filing; and that the firm will take reasonable steps to assure that confidential information provided by the Plan Administrator or Plan Sponsor is protected from unauthorized disclosure. For XXXXXXXXXX: ________________­________Date: ____________ The designated service provider must retain this authorization.

SECURE 2.0, Section 317, specifies that it is the time for filing the return of such individual for the taxable year..."(determined without regard to any extensions)"... Caveat - I did not check to see if any subsequent guidance modifies this. I see Paul already replied. My response was with regard to deferrals only.

Thanks.

Suppose you have a governmental 501(c)(3) 403(b) plan. They (the employer) does not participate in Social Security. So, are their W-2 wages considered "FICA" wages? I've never really thought about this type of situation, but was having a discussion with an old college friend where this came up. There's no actual plan involved - this is purely for sake of discussion. I'm feeling particularly geeky this morning, as this actually seems interesting to me, which is a little scary. I need to get out more... If they don't participate in Social Security, I don't see how they could be FICA wages...

And all the wonderful memories...

What's the difference between true love and retirement plan paperwork? Retirement plan paperwork is forever...

Is a plan amendment required prior to 1/1/2026, or does this just fall under the general SECURE/2.0 amendment deadlines - in other words, it can be handled operationally as long as amended by the deadline? Recognizing, of course, that notification will need to be given to the HPI's as well as participants who will now have a Roth option if they didn't have it before, etc... Bleah.

Thanks all for the comments.

Self-check due to severe brain cramp - so, suppose a plan has eligibility requirements of 3 consecutive months with at least 250 hours. Let's make it easier and say age 21. The plan also excludes part-time employees. Part-time employees are DEFINED as per diem employees - they are not defined by hours. All the "part time" employees work <1,000 hours in a year. So, since the LTPT rules do not permit an exclusion category as a "proxy" for avoiding the LTPT rules based on an age or service condition, it would seem that this exclusion class is not valid for avoiding LTPT deferral eligibility if such an employee satisfies the 2 consecutive year/500 -999 hour/age 21 requirements, although it should be ok for employer contributions, subject to testing. Or, if someone satisfies the "normal" eligibility of 3 months/250 hours, even though they are excluded, do they NEVER become LTPT, because they have satisfied the less stringent normal eligibility requirements?

Depends on the plan document. All of them that I've seen (or remember) do have a spot for this. Usually either early on in the Adoption Agreement, or in an Appendix. In our documents, for example - the 401(k) doc it is on page one of Appendix A, whereas for the new Cycle 2 403(b), it is on page three of the Adoption Agreement. I'm sure you'll find it if you look through the AA and/or Appendices.

Any chance the document was SIGNED prior to 12/29/22? Assuming not, then assuming plan and fiscal year are calendar, I agree with your effective date - that is, applies the first plan year that begins at least 12 months after the close of the first taxable year with respect to which employer normally employs more than 10 employees. If any of these employees are part time, then you get into a pro-rated calculation depending upon hours worked - for example, an employee who works 6 hours counts as 3/4 of an employee, 2 hours counts as 1/4 employee. As I recall, IRS came up with this calculation methodology from the COBRA regs. Great fun.

I believe this was for "regular" DC plans, not 403(b) plans. Have I got that wrong? Sorry if I didn't make it clear my inquiry was on a 403(b) plan.

Is this even possible? I didn't think the IRS did any Advisory letters for "pre-approved" plans that early. Have NOT seen the actual document or IRS letter to confirm what the audit firm is saying...

I'm sure the rest of you have similar problems, but I find that the majority of situations are only communicated to us AFTER the fact, (sometimes LONG after the fact) which contributes greatly to the potential difficulties. Fun, fun, fun!

Yeah, I understand how you feel! ASG situations give me a dull pain behind the eyes. Of course, we tell them to consult their legal counsel - in more years than I care to count, I think I've seen them do it only a few times.

If I remember correctly, without looking it up, probably not. Assuming there is only one class of stock, and no option attribution, etc., then there is no attribution between Father and Son - the key point being that neither owns MORE than 50%. Now, you might well have an Affiliated Service Group (ASG) depending upon type of businesses and facts and circumstances.

I believe FIS is tentatively planning to have a SECURE/2.0 amendment available late 3rd quarter of this year. The amendment for tax-exempt 457(b) plans is slated to be available sooner. Of course, it ain't over 'till it's over. As we saw in the massive choke by Duke...

Interesting question. When referring to a 401(k), the word "establishes" is used, whereas that word is not used in the context of a 403(b). The truly conservative route would be to wait until the 2-year period has passed. This has another potentially larger advantage - if you interpret the statute as allowing the rollover within the 2-year period without penalty, then those rollover funds remain subject to normal distribution restrictions, whereas if you wait until after the 2-year period has passed, then roll the funds over, most 401(k) and 403(b) plans allow a withdrawal of rollover funds at any time. This flexibility may be attractive to employees - they tend to get cranky if they are told they can't currently withdraw rollover funds.

I am not a lawyer, I'm a TPA. From my perspective, you need a lawyer. If the amount of money is substantial, then you REALLY need a lawyer. Don't mess around. Now, others here may have a more informed opinion.

*Hi Paul - one question - I believe that this permissive aggregation is solely for top heavy purposes, correct? In other words, permissive aggregation isn't allowed for normal coverage/nondiscrimination testing? *Never mind - not eligible for permissive aggregation. Thanks.