Belgarath

No. They can terminate effective 12/31, and then have them participate in the 403(b) for 2026. Secure 2.0 allows for mid-year terminations, but only if the employer establishes a safe-harbor nonelective 401(k) to replace it. Won't help in your scenario.

Thank you both!! As it turns out, by a happy chance, the plan in question turns out to be a 403(b), so top heavy doesn't apply, and the eligibility is such that LTPT will never apply. Woohoo! It's about time we caught a break on something...although, preliminary info appears to indicate that coverage and nondiscrimination were NOT disaggregated. I don't think it is likely to make any difference in coverage, but might affect the ACP test.

We virtually never get a plan that has union employees, so I'm a bit rusty on this. I can look it all up, but thought perhaps someone who works with it would know in a snap right off the top of the head. As I recall, for a plan where there are both union and non-union employees, even if all have identical coverage or not, mandatory disaggregation of union employees for coverage and nondiscrimination testing, and the union employees' "plan" is deemed to pass both. Top heavy treatment does not disregard the union employees. And if there is more than one collective bargaining unit with employees participating in the plan, each unit is considered a different "plan." Is my recollection correct? Thanks!

While I typically try to avoid politics in retirement plan discussions - looking ahead, with the current Congress and administration, there might well be in the near future. However, I wouldn't dare to predict something like this - just take it as it comes, if it happens at all.

As with many services/providers, some are excellent, some couldn't be trusted to - well, never mind. I think there are certain payroll companies that generally handle things well, yet fall short on the qualified plan end of things...and to be fair, sometimes the clients make life difficult for the payroll companies, similar to what we sometimes have to deal with... We've never actually received a request for something like this. Is it a common request/procedure? Just curious.

Monday brain cramp (although the cramp is likely permanent...) A lot of angst here over a small amount of money, but the question has come up if the death benefit can be directly rolled over to a trust for the benefit of the minor, or can it be designated as a beneficiary IRA? I'm really not sure on this one, due to the fact that there was no "designated beneficiary" by the participant. I believe it has to be under the control of a guardian/Trustee until age of majority regardless of rollover status. Thoughts? Thanks! Update - after having done some additional research, this seems to get complicated even further. It seems like it will be ultimately governed by state law, since ERISA doesn't appear to specify specific handling. So we'll need to tell the Plan Administrator and client to consult legal counsel. Seems like the legal guardian (and there is one) can make it easy (on the advice of counsel) by either setting up a UGMA trust/custodial account, or direct a rollover to an inherited IRA set up for the minor beneficiary?

Congratulations! Enjoy!

BRILLIANT!!!!!!!

And the Nerds Cheer? Secant, tangent, cosine, sine. Three point one four one five nine!

This is actually hypothetical, although it is easy to see how it could apply in real life. Suppose you have employer A, who establishes a PS (no 401(k) aspect) plan. A couple of years later, A purchases part ownership in employer B. No CG/ASG, but B signs on as a participating employer in A's plan, creating a MEP under the Employer A's document. Employee X, who has previously satisfied the 1 YOS eligibility for Employer A, in a given year transfers to employer B. Both plans have a 1000 hr/last day allocation requirement. As per the terms of the document, all service with any and all participating employers is counted. Compensation is determined separately for each employer. 415 is calculated jointly. So, this employee X works 400 hours with A, (earning $8,000) then transfers to B and works 700 hours (earning $10,000) and is still employed on 12/31. Let's further "simplify" this by postulating that both employers make a 10% PS contribution for the year. Employee X should receive an allocation of $1,000 in B's plan, as compensation is calculated separately for each participating employer. Is employee X eligible for any allocation in A's plan? Since service for each employer is counted, there's no severance/separation from employment, it would seem that an allocation of $800 would be appropriate, but it "feels" strange. Any thoughts? This is for discussion only - not a real situation, so please don't spend a lot of time!

Ugh. Thanks Peter!

G8 - I'd just like to confirm that I'm understanding what you are saying, as I think we are saying the same thing but stating it a little differently. I'm saying that under the extended deadlines offered under 2024-2 guidance, there's no extension for the tax-exempt 457(b) plans - so they remain at the 12/31/25 deadline previously established. Agree/disagree? I just wanted to confirm that there has been no additional guidance that I missed. Thanks!

No, other than obvious things like gender, religion, etc...

Last I knew, under IRS Notice 2024-2, the amendment deadline for these was 12-31-25 - the IRS didn't give the non-governmental plans the extended deadline available for 401(a), 401(k), and 403(b) plans. Has there been any update of this deadline that I missed? Thanks.

Without having read the report, just on general principles I'd say: Stopping examinations is a bad idea. There has to be some level of enforcement threat to attempt to keep the bad players from running amok, with the rest of us picking up the tab. And, rulemaking/interpretive guidance is also a necessary (if sometimes unwelcome) function. Look at all the SECURE/2.0 etc. confusion that requires guidance, just as one example.

Yuck. How I pity you!

Well, if you are willing to have the policy owned by the Plan, the PLAN may purchase the policy from the participant, (you) under PTE 92-5. The plan will then own the policy and pay the premiums, within incidental limits, etc., etc. The Plan will be the owner and beneficiary of the policy, and the death benefits will be paid to the plan participant's (you) named beneficiary(ies) under the plan. I'm not commenting on the advisability (good or bad) of doing this, (well, I guess I am - my bias is that this is generally a bad idea, but that's an issue for you and your tax counsel). I haven't had anything to do with life insurance in a plan (thankfully) for so many years that my thoughts may be out of date.

Thanks Ilene.

It'll be interesting to see if anyone who knows anything is still employed in governmental positions. Entirely possible that there will be great confusion and upheaval for some time to come.

Had an interesting question this morning. Client with an ACA (not an EACA nor a QACA, and no auto-increase) wants to limit the auto-enrollment to full-time people only. Only applicable guidance I can find is 1.414(w)-1(b)(1) and (e)(3). Under Treasury Regulation 1.414(w)-1(b)(1), and 1.414(w)-1(e)(3), the ACA need not cover all employees in the plan, and a covered employee for these purposes is as defined under the terms of the plan. Assuming the document provides an “other” election, so this should be allowable. Not sure this was an intended consequence in the regulation, but seems to allow what client wants to do. Not a BRF issue either. Anyone ever run into this request?

Simply stunning.

FWIW - The Relius Volume Submitter documents with an AA format provide an "index" which is a 2-3 page summary listing the specific elections made in that AA, and showing the page # of that specific election. Very helpful. We generally don't get much in the way of complaints about the restatement fee - maybe we need to charge more! But we DO provide a binder with a hard copy of everything (plus electronic copies if requested) as some justification for the fee - many people, if they just get an electronic copy, really don't fully comprehend the amount of work involved.

We received ours a month ago. But, getting systems up and running, and web seminars on the new documents are another story. I'm not expecting to be able to fire up the restatements until early April at best.

Since this has already been the subject of the pre-nup, hasn't the subject been broached already? Perhaps he might want to wait to bring it up again until after Valentine's Day... 😁

Thanks to you both!