CuseFan

https://pbinfo.com/locate-missing-participants/ This is one that we use.

We use PBI and I guess are fairly happy as we've been using for a while. https://pbinfo.com/locate-missing-participants/

Must resist temptation to post snarky political comment, already snuck one in yesterday.

At first I tend to agree with that position but it is not crystal clear in the Code and I looked at some articles that agree with you. See IRC Section 1563(f)(2)(B) and 1563(e)(5) and (6). This prohibits double attribution on constructive ownership. Originally I thought by applying (e)(5) to either spouse you are then also attributing again under (e)(6)(B). The $64,000 dollar question (I guess $72,000 question now) is whether the 50%+ is based on attribution but not actually considered attributed for the double counting prohibition. I changed my mind which you'll see at the bottom. (B)Members of family Stock constructively owned by an individual by reason of the application of paragraph (5) or (6) of subsection (e) shall not be treated as owned by him for purposes of again applying such paragraphs in order to make another the constructive owner of such stock. ** (5)SpouseAn individual shall be considered as owning stock in a corporation owned, directly or indirectly, by or for his spouse (other than a spouse who is legally separated from the individual under a decree of divorce whether interlocutory or final, or a decree of separate maintenance), except in the case of a corporation with respect to which each of the following conditions is satisfied for its taxable year— (A) The individual does not, at any time during such taxable year, own directly any stock in such corporation; (B) The individual is not a director or employee and does not participate in the management of such corporation at any time during such taxable year; (C) Not more than 50 percent of such corporation’s gross income for such taxable year was derived from royalties, rents, dividends, interest, and annuities; and (D) Such stock in such corporation is not, at any time during such taxable year, subject to conditions which substantially restrict or limit the spouse’s right to dispose of such stock and which run in favor of the individual or his children who have not attained the age of 21 years. (6)Children, grandchildren, parents, and grandparents (A)Minor children An individual shall be considered as owning stock owned, directly or indirectly, by or for his children who have not attained the age of 21 years, and, if the individual has not attained the age of 21 years, the stock owned, directly or indirectly, by or for his parents. (B)Adult children and grandchildren An individual who owns (within the meaning of subsection (d)(2), but without regard to this subparagraph) more than 50 percent of the total combined voting power of all classes of stock entitled to vote or more than 50 percent of the total value of shares of all classes of stock in a corporation shall be considered as owning the stock in such corporation owned, directly or indirectly, by or for his parents, grandparents, grandchildren, and children who have attained the age of 21 years. (C)Adopted child For purposes of this section, a legally adopted child of an individual shall be treated as a child of such individual by blood. *** I agree spouses aggregated and over 50% within meaning of (d)(2). The question is what "subparagraph" are we disregarding? It must be either (e)(6) or (e)(6)(B). If it was all of (e) my original thought that this was prohibited double attribution would be true, but given (d)(2) specifically references (e) for ownership interpreting that way makes no sense. One thing I am sure of is that I used the words attribute and attribution in this post more than should be allowed, sorry. I attribute that to being tired and hungry this afternoon as I did not eat lunch.

@Peter Gulia thank you for getting those! Especially Better Off Dead, because I think the Lethal Weapon one was easy. As I get older and our staff gets younger, such references are meaningless and unappreciated!

Was thinking about that but didn't dig into - you may have something there.

Personally, I am of the opinion that those records should be kept electronically and in perpetuity, if not by the TPA/RK/Trustee/Custodian then certainly by the plan sponsor with the assistance from one of the aforementioned entities. Doesn't need to be extensive, just needs to sufficiently prove someone has been paid out. Why? SSA sends me a letter saying my employer's plan from 35 years ago MAY owe me a benefit. Not remembering they paid me back then and instead of rolling it over I went to the casino and lost it, I have no record, so I make a claim on that plan. I don't accept their answer of we don't have you in our records any more so you must have been paid out, so I go screaming "I want my two dollars!" (bonus points for the movie reference) and threaten to talk to my lawyer, the DOL, the IRS because I've seen everything worthwhile on Netflix and have nothing better to do now. This sends the Plan Administrator scrambling, calling around to past and present service advisors, muttering "I don't have time for this" and "I'm getting too old for this sh1t" (yes, another movie reference) before caving like a Democratic senator and concluding it's easier to pay me my $2. The moral here is (1) someone should retain these records in perpetuity, logically the plan sponsor, and (2) responsible party(ies) need to be diligent in reporting deletions on Form 8955-SSA. Then the too often occurring scenario from above gets avoided.

I think you are OK to put a limit on plan compensation for HCEs that is below the 401(a)(17) limit, but not until the next year. You could not do a discretionary match just for the HCEs.

At this point, I agree, why not do individual PS groups and just give a 3% PS to the HCEs they want. If vesting is wanted, make the PS 100%. This would even give some flexibility to do 0-9% for any HCE provided you can pass cross-testing.

If just an "ordinary" match you can amend to stop for any match that has not yet been earned under the terms of the plan. Therefore, if changing for 2026, just need to amend prior to 1/1. There is no advance notice as far as I know.

Agree with ESOP Guy. Also becomes problematic if distribution requested and ultimately paid after the employee is rehired/recalled.

The statutory exclusion from coverage testing is for a participant who (1) terminated and worked 500 or fewer hours AND (2) did not benefit for such year by reason of such. If benefited - must include regardless. If no allocation conditions - must include regardless. 1.410(b)(6)(f) - these are "and" conditions meaning all must apply to exclude an employee from coverage testing. (f) Certain terminating employees—(1) In general. An employee may be treated as an excludable employee for a plan year with respect to a particular plan if— (i) The employee does not benefit under the plan for the plan year, (ii) The employee is eligible to participate in the plan, (iii) The plan has a minimum period of service requirement or a requirement that an employee be employed on the last day of the plan year (last-day requirement) in order for an employee to accrue a benefit or receive an allocation for the plan year, (iv) The employee fails to accrue a benefit or receive an allocation under the plan solely because of the failure to satisfy the minimum period of service or last-day requirement, (v) The employee terminates employment during the plan year with no more than 500 hours of service, and the employee is not an employee as of the last day of the plan year (for purposes of this paragraph (f)(1)(v), a plan that uses the elapsed time method of determining years of service may use either 91 consecutive calendar days or 3 consecutive calendar months instead of 500 hours of service, provided it uses the same convention for all employees during a plan year), and (vi) If this paragraph (f) is applied with respect to any employee with respect to a plan for a plan year, it is applied with respect to all employees with respect to the plan for the plan year.

Yes, just restate as PSP, but if no 401(k) deferrals why ask about auto enrollment?

Thanks for the clarification and I agree those listed items are red flags for audits.

Unless the plan document does not allow or such request for reimbursement is not timely (asking in 2025 to be repaid for expense paid in 2024), I see no problem. Could be the RK just doesn't want the assets leaving the plan.

I don't have any input because I haven't done 5500s in years, but found this interesting given something I read earlier in the week. https://www.napa-net.org/news/2025/10/talking-points-things-that-make-me-mad-as-hell--part-2/?utm_source=MagnetMail&utm_medium=email&utm_term=kprell%40bpas.com&utm_content=COM_NAPA_eNews_10.21.2025_Daily_Tues&utm_campaign=Hopes%2C Fears for Middle Class Retirement Prospects Scroll down to this header. One of Nevin's pet peeves is people using 5500 data to manufacture compliance scares. Data “analysis” that takes real stuff, combines it with fake stuff, makes up a new scary-sounding name for it, and then claiming that vast majorities of all the retirement plans in existence are in “violation.” Certainly there are compliance issues and some clear red flags that can pop up on a 5500 filing, but someone could take many questions and say a certain answer might mean there is some obscure issue, not to mention those questions that require a yes or no answer when NA should be the logical answer and for which any answer could be deemed suspect, i.e., "have you stopped beating your wife?" Statistics/data analysis can be skewed to serve the presenters agenda. Peter, I'm not questioning your intent, just saying our forum should exercise caution and not create a lot of smoke where there is no fire.

In terms of a protected benefit, consider that such cannot be cut back or eliminated with respect to benefits already accrued. That context really does not translate to automatic enrollment (which is a statutory design requirement) except that someone who is automatically enrolled must remain so unless they make an election. If the small plan of the buyer was merged into the larger plan of the acquired with that plan being the survivor, then that plan goes away for prospective benefits. I do not see anything as needing to be protected except possibly one's default enrollment. I would also consider a campaign to get affirmative elections (including zeros) from all employees previously in the buyer's plan so there are no residual default enrollments to worry about protecting if required. Another consideration, institute auto enrollment for the merged plan as an enhancement.

Google AI overview provides this: Calculation for a short limitation year The formula for the prorated dollar limit is: Annual dollar limit times fraction of months in short limitation year/12. Number of months: Any fractional part of a month is counted as a full month for this calculation. But the IRS website provides this specific example, so not sure where AI got its purported intelligence on this. Maybe the AI machines interpreted "... and any fractional months" as meaning they count as a whole month, and maybe (hopefully) these machines aren't quite ready to take over the world. Example 2 - Termination Plan B is a profit-sharing plan with a calendar limitation year. The plan is terminated effective September 15, 2018. The plan termination is treated as if an amendment has been adopted to change the limitation year to a year beginning September 16, 2018. A short limitation year is created from January 1 to September 15, 2018 (8.5 months). Because the plan terminated in 2018, the prorated short year limitation is calculated based on the 2018 limit of $55,000 under IRC Section 415(c). The prorated short year IRC Section 415(c) limit is: $55,000 x (8.5/12) = $38,958.

Unfortunately, with all the deportations (whether legitimate or not) this is likely to be not such a rare occurrence in our world.

Also, consider terminating the MP and allowing (not forcing) R/O into the new plan. That way you deal with the QJSA notices and elections now at one time rather than having to deal with them on pieces of accounts at varying times in the future. Also, the larger those MP balances get in the future, the more apt someone is to see an annuity as attractive and elect - at least IMHO. Given a very easy direct R/O option to new plan, I would expect a majority to do so.

The decision as to whether someone gets a PS contribution should be made by the EMPLOYER not the specific HCE unless it is an owner-only plan. If the EMPLOYER was smart, they would give a particular HCE a nominal amount so such HCE's compensation may be used in the deduction determination.

100% agree - the deduction limits apply to the eligible compensation of employees who benefit under the plan.

Agreed, but if the first plan was in place less than 10 years then IRS could challenge its "permanency" - so they may want to get their ducks in a row regarding business reason for the termination.

Buyer is still sponsor. Buyer's plan issues, if any, do not automatically and instantaneously go away either, so perhaps the buyer should do the proper thing and address/correct compliance issues and then merge the plans. If issues were due to buyer's deficiencies, controls and procedures should be put in place so same doesn't happen with merged plan. If issues were due to buyer's plan provider/recordkeeper, then maybe target's plan provider should service the merged plan or at least until an RFP can be run for new provider.

Pooled funds I assume? Surrender in and of itself is not a violation, but could a disgruntled participant sue the fiduciary and claim a breach or even multiple breaches - the decision to get in and then the decision to get out? Possible, yes - probable? I think this has come up here before where it was asked whether employer or service provider (new funds or advisor) could make up the surrender charges to the plan to make participants whole, which may have its own ERISA concerns. Employer probably OK, service provider not so sure. I expect others on this forum have dealt with this in the past. Owner likely has largest balance so employer making whole might be palatable.