RatherBeGolfing

Thanks @QDROphile! The employer is a 501c3, so I believe they are eligible if the plan meets certain requirements like deferrals only, limited employer involvement, etc. My first thought was that it was one plan but two "accounts" at the vendor, but the Form 5500 for plan 001 only reports deferrals up to the 4% that's matched, so that's the main reason I'm leaning towards two plans.

403b Guru's of benefitslink, please help me out with this one. Client is a 501c3 and Im looking at what I was told was a pretty simple 403b (plan 001). Nothing exceptional stands out in the plan document, participants get a 3% non-elective on top of a 50% match up to 4% of comp. The plan files a Form 5500 every year. After speaking to the accountant, what happens in practice is throwing me off a bit. Elective deferrals in excess of 4% of comp are actually deposited to a second 403b plan (lets call it plan 002). I havent seen a plan document for this plan, and no 5500s have been filed. It sounds like its a deferral only non-ERISA 403b. Both plans are with the same provider Plan 001 does not mention anything about deferrals in excess of 4% of comp being funded to a different plan This doesn't seem right to me, I would expect that plan 001 would have to spell out that it will only accept elective deferrals up to 4%. Am I missing something? What is the point of splitting elective deferrals into two plans? any insight would be greatly appreciated.

Was writing something similar to @Paul I but he said it much better!

Yes.

Sounds like a plan merger to me. (Im assuming they are not leaving a MEP or PEP with you which would add some complexity) Yes, because you have to let the IRS/DOL know to not expect another 5500-SF for this EIN+PN. Yes. Depends on service agreement with the client. Our default is that prior provider will file the final 5500 since they have the data, but we will do it for them if the client/provider relationship has soured to the point where the prior provider says "not my problem" or if the client asks us to do it.

Makes sense. IRS had to release the 2024 comp limit for 2025 because that's what the law requires. The IRS delay doesn't change that legal requirement, and as I recall, people questioned whether the IRS even had the authority to delay implementation until 2026.

The 2025 comp limit for 2026 would have to be released in Oct/Nov of 2025 when we know what 2025 inflation looks right? So they cant tell you today what the limit will be at the end of 2025.

or start at 10% and no escalation

Yea I agree. If the Participant magically discovers a reason that does qualify for hardship, it would be a good idea to document that.

Comp limit for employees excluded from the calculation of startup cost credit increased to $105,000

And all participants without an affirmative election need to be auto-enrolled. Cant use participants who enter on or after xx/xx/xxxx if you want the extended testing window.

I think a reasonable interpretation is that any level of assistance in a major disaster area will qualify (absent further guidance). I'm comfortable defending that interpretation should they come out with further guidance that limits it.

Lots of answers in this thread.

Absent specific guidance that says "LTPTEs are not subject to auto enrollment", I don't see an argument for why it wouldn't apply. I'll also throw in that at least two sessions at ASPPA Annual made this point I believe one was Kelsey Mayo in a general session but don't quote me on it.

Most auditors I have worked with will make this determination based on facts and circumstances (as they should). I have seen some auditors start with a default position like every company should be able to separate employee contributions from employer assets in 2 business days, and only deviate to longer if it can be substantiated that it is not possible to it in 2 days. Nope, because it is by definition not a valid reason. Anything beyond the 15th of the month following has to be corrected. The regs are very clear on this.

Are these material defects or more like a technicality that still should have caused the designation to be rejected? Did someone forget to dot an "i" or did they turn in a designation without signing it or getting it notarized?

+1 100% leave it alone.

In my opinion, you can't reverse/undo a plan term. You created a right to 100% vesting and a distributable event. What you can do is start another plan. This solves the distributable event issue because there is an alternative DC plan to transfer assets to, and you add new sources for new contributions that will be subject to vesting.

If you are required to file and file late, you either pay the penalty or the DFVCP user fee. The penalty for a small plan is $10 per day capped at $750, for a large plan its $10 per day capped at $2,000. Participants don't matter for the $10 per day, just the cap. For purposes of the calculator, I think you have to "trick" it by entering 1 participant instead of 0. It needs the count to decide if the cap is $750 or $2,000.

Attach the information to the filing, if you still get a love letter from the IRS, follow up with a written response.

I think so. The IRS will identify the sponsor by EIN anyway...

As a Florida based practitioner, I have been through this many times. While then IRS is supposed make the determination based on zipcode, they still sent proposed penalties to many in the disaster area. It has been hit or miss for years. Sometimes the IRS love letters show up before the extended due date, some times they show up after you file. You can send the IRS a flash drive with a list of clients affected by the disaster, but I have found that this doesn't help much. Things that work more often than not: Put the FEMA disaster declaration in the "Special Extension" description. This will be disaster and state specific. For example, DR-2848-FL is the Florida disaster declaration for Helene. Add an "other attachment" to your filing and attach he IRS disaster notice to your return. You won't find this in the instructions or any of the communications, but I have been told by both IRS and DOL staff that this will reduce the chances of an agency follow up. If you are using YOUR location as a reason for the extension, use an "other attachment" to add the explanation that while the client was not in the disaster area, the practioner was, and that is why this client is entitled to the extension. I hope this helps.

Pretty much. Its basically part of overhead.

If they are employees, they count.

I agree.