C. B. Zeller

If you're seeing a ULT that starts at 70, it's outdated - the ULT is found in the regulations at sec. 1.401(a)(9)-9(c) and it starts at 72. The rule saying that a surviving spouse can use the ULT at their own age to determine the RMD is not actually in the final regulations yet, it's only contained in the proposed regulations from 2024. Consequently the expanded ULT is also only found in the proposed regulations at this point. You can find it here: https://www.federalregister.gov/d/2024-14543/p-115

Thanks! I should put "Pension Artist" in my signature 🤣

I re-read 1.411(b)(5)-1(e)(2) to be sure and I concur - there is nothing that would require you to use a different interest crediting period post-termination. If a full interest crediting period elapses after termination, then yes, you have to use the 5-year average of interest crediting rates as the interest crediting rate for that period. But if all distributions are completed before the end of the first interest crediting period post-termination, then no one would actually get that interest credit. Effen, I get where you're coming from. But remember, 411(d)(6) only says you can't reduce a participant's accrued benefit by an amendment. If it's part of the formula from the get-go then 411(d)(6) doesn't apply. And there is no reduction in the participant's normal retirement benefit. All you are doing is saying that if you take a distribution on day X, your lump sum will be $Y. Now Y could be less than the actuarial equivalent of the normal retirement benefit, and that's ok. In a cash balance plan, the lump sum doesn't have to be the actuarial equivalent of the normal retirement benefit, it's actually defined the other way around - the lump sum (or any alternative form of benefit) has to be not less than the actuarial equivalent of the hypothetical account balance. Since the hypothetical account balance only gets interest credits annually, then yes, it's possible that the actuarial equivalent of the hypothetical account balance will decrease throughout the year. That's expected and again it's ok. When it's not ok is if the participant is past normal retirement age, because then not applying the partial-year interest credit would result in an impermissible forfeiture of accrued benefits (unless the plan uses the suspension of benefits rule). So the accrued benefit does still have to be actuarially adjusted post-NRA to the date of benefit commencement. But for pre-retirement distributions, you're fine.

If the payment of the advisory fees may have resulted in fiduciary liability to the sponsor - perhaps because it was not reasonable for the plan to pay those expenses under the circumstances - then the plan sponsor may make a restorative payment to the plan. The restorative payment is not considered a contribution for purposes of 404, 415, etc. See Rev. Rul. 2002-45

Assuming that the divorce settlement stipulated a QDRO, then you've breached the agreement. However if there is no money left in any qualified plan then a QDRO won't be useful at this point. You agree that some money must change hands, but how much (taking into account earnings, taxes, etc) and by what vehicle (such as cash, IRA transfer, or something else) is up in the air. If you and your ex can agree on an amount that you owe her and by what means, then get it in writing and give her that amount. Done. If you can't, then you'll have to go back to your attorneys and/or mediation to come up with something. Good luck! And of course, I am not a lawyer and I am most certainly not YOUR lawyer. This is based on my best understanding of the law based on my personal experience. It is NOT legal advice by any means. Check with your lawyer before doing anything.

They can exclude him from both plans, by name or by job category, as long as it's not a service-based exclusion (including a disguised service-based exclusion). He would still be considered non-excludible so he would count against the coverage test (assuming he's a non-HCE). However - and read your documents carefully to be sure - his prior accrued benefits (if any) may well have to be restored. You said he got no money because he was 0% vested; this implies that he accrued a benefit in 2025 but received a "deemed zero-dollar cash-out" upon termination. Re-hired employees have a right to have their forfeitures restored by repaying the distributed amount, so just like he was deemed to have been distributed $0 he would also be deemed to have repaid $0, and would be entitled to a restoration of forfeited accrued benefits. If he is excluded from participation, he won't accrue any additional benefits, but he will continue to earn vesting service towards the benefits previously accrued.

Two things: 1. The definition of benefiting in the 401(a)(26) regs points to the definition in the 410(b) regs. The 410(b) regs say that you are still considered to be benefiting even if you don't accrue a benefit, if the reason you don't accrue a benefit is solely because you hit the maximum number of credited years of service under the plan. So in your case, somebody who has been at the 30% cap for a few years would still be considered benefiting under 401(a)(26) even though they didn't have an increase in their benefit. 2. Meaningful benefits can be demonstrated on an accrued-to-date basis. If you (or more importantly, your IRS examiner) accept that 0.5%/year is meaningful, then an employee would have to have over 60 years of service for 30% to be less than a meaningful benefit.

What? Why are they contributing a 3% QNEC and still choosing to be subject to the ADP test? To answer your question though, in order to count a QNEC towards the NHCE ADP, it has to be contributed for the same plan year as the NHCE deferrals being tested. Right now it’s 2026 and you’re doing the 2025 ADP test. With the prior year method, you’re using the 2024 NHCE ADRs in the test so you could only take into account 2024 QNECs (which could have been deposited as late as 12/31/2025). Hence why it’s generally not feasible to correct a prior year ADP test using QNECs. Now in your unusual situation, where they did actually contribute a QNEC during the prior year, you still have to take nondiscrimination into account. 401(a)(4) has to pass both with and without the QNECs that were applied to the ADP test taken into account. If you are including all of the NHCE QNECs in the ADP test then 401(a)(4) will fail since you’ll have contributions going only to HCEs after backing out the QNECs used towards ADP. If you calculate just the minimum amount of QNEC needed to pass ADP and leave some over to be included in 401(a)(4), then you can try to see if it would pass using cross-testing or another method. But if it fails, you now have a failure for 2024 that you would need to back and correct somehow. In short, if you’re using prior year testing, plan on correcting via refunds.

The mid-year/retroactive safe harbor non-elective is only good for the ADP safe harbor. If you need the ACP safe harbor for a discretionary match, then you will have to wait until the next plan year. Since you mentioned you have access to ERISApedia, chapter 14.12 has a great discussion on safe harbor plans. In particular there is a chart in 14.12.3.5 that I think will help you narrow it down. Remember that the notice has to be given before the beginning of the year, so if a notice is required then you can't make the change mid-year.

Safe harbor match can't be added mid-year. Safe harbor non-elective can be added up through November 30 (assuming calendar year plan) of the current year at 3%, or up through December 31 of the following year (i.e. 12/31/2027) at 4%.

I disagree with Marjorie Lucas (who I suspect might be an LLM, based on the responses posted above). The employee enters the plan immediately upon rehire. You can not disregard prior service merely because the plan was frozen at the time, or because there was no plan in effect at the time. Requiring him to work another 1000 hours before entering the plan would violate the maximum service requirement of IRC 410(a)/ERISA 202.

Google Workspace and Microsoft 365 are the big cloud-based products. Protonmail, based in Switzerland, has a security-first product, but they are not as full-featured as Microsoft or Google. If you are using your own domain name, it can be complicated to get your email up and running without professional help. Besides configuring your MX records for the new email host, you will also need to make sure SPF, DKIM and DMARC are configured correctly to ensure your outbound email gets delivered and not flagged as spam on the receiving end. Good luck!

It also says

Yes, they have to. Unless the assets are less than $250k, in which case, they don't have a filing requirement at all.

If the plan covers only a 100% owner and their spouse, then they should be filing a 5500-EZ, not SF.

Is it? I don't see anything in the text of that item or the items above or below it that would restrict it to the YOS match formula. There is the heading of course, but as it says in the basic document, headings are for reference and convenience only, and are not part of the plan document. It seems to me more likely that the coders at FTW put this item in the wrong place. You could always select "Special schedule" in D.8.f and describe it there. Something along the lines of, "a uniform percentage of Matched Employee Contributions not in excess of X% of Compensation"

Looks like it's at D.11.b in my adoption agreement. It's under the heading "Years of Service" which doesn't make much sense to me, but so be it.

Whoops. Missed that part. Then I agree with Bri, it's still a deferral election, it's merely late.

Not even late. For an owner with earned income, they have until their tax return is finalized to deposit their deferrals. For a sole prop that can be as late as 4/15, or even later on extension. I would have no problem saying that the establishment of an auto-$2k/month withdrawal constitues an election to defer $24k for the year. So just get the remaining money in by 4/15 and call it a day.

You only need to test them all together as one big group. Under 414(b), members of a controlled group are treated as a single employer for testing purposes. So if A, B, and C are all the same employer, and C, D, and E are all the same employer, then logically all of A, B, C, D and E must be the same employer.

Peter's info (as he is clear to remind us, not advice) is thorough and excellent as always. It sounds like the client is happy with the current tax situation, and ejohnke is just looking to correct the potential disqualifying defect of allowing a distribution that shouldn't have happened. Is that accurate? If the individual could have had a distributable event, but the plan didn't allow the distribution, could the plan be retroactively amended to permit it? For example, the participant is 60 years old, so amend the plan retroactively to 2025 to permit in-service distributions at age 59-1/2. Problem solved. If there really is no possible distributable event (don't forget that employer money sources can have much more liberal distribution restrictions than 401(k) deferrals), then you might still be able to get relief for the distribution (and leave the money in the Roth IRA) through VCP.

Stock sale or asset sale? If asset sale: A still exists as a shell company and the owner(s) of A can sign on behalf of A. The participants can take distributions right after the sale date since they are no longer employees of A. If stock sale: B is now the sponsor of The Company A 401(k) Plan and has the authority to sign. Participants can not take a distribution until the plan termination date. Termination triggers the successor plan rule and B may not be allowed to maintain a 401(k) plan for 1 year after the distribution date. This is why, with a stock sale, it is important to terminate the seller's plan before the sale date, or be prepared to merge the plans.

An IRA can not be part of a qualified plan. A Roth IRA can not be rolled over into a Roth account in a qualified plan. Just set up the new account. Do it right.

No, you can't self-correct the initial failure to adopt a written plan. See Rev. Proc. 2021-30 4.01(b) and Notice 2023-43 A-2(1).

Interest AND mortality. See Bri's response. There is no such thing as an annuity with 12 monthly payments made all at once. There is an annuity with annual installments, or an annuity with monthly installments.