Jakyasar

I am not sure removing a possible benefit (assuming that I am making sense here) is something I want to tinker with even if the interim amendment deadline is EOY in 2026. Not clear how it would affect 411d6. I am playing this a bit on the cautious side, may be too paranoid.

SECURE is not in place for 2025 so no otherwise excludable exemption for 2025. As for the language (thanks for making me re-read the section with my lips moving), here is the language. I do not have BPD though. "Top-heavy duplications when a defined benefit plan is maintained (Plan Section 4.3(i)). When a Non-Key Employee is a Participant in this Plan for a Plan Year and also accrues a benefit for the same Plan Year in a defined benefit plan maintained by the Employer that is subject to the top-heavy rules, indicate which method will be utilized to avoid duplication of top-heavy minimum benefits: (select one of a. - d. AND complete e. or select f.) a. [ ] The full top-heavy minimum will be provided in each plan (if selected, Plan Section 4.3(i) will not apply). b. [X] 5% defined contribution minimum" Looks like 3% it is as excluded from the CB plan i.e. not benefitting, did I get this right? If I did then the 4% SH covers it. Question, what if the SH match was only 1%? Would the PS be 2% or 3% as SH match (unlike non-elective SH) does not cover part of top heavy.

401k/SH match/PS combo with CB plans. Top heavy is provided by DC plan. PS allocation is everyone in their own group. Plans are top heavy. DC plan eligibility for all sources is age 18 and 6 months with entry 1st of month following completion of 6 months service. CB plan is 21/1 with dual entry. Gateway is required at 7.5%. During 2025, the TPA handling the DC plan changed the provisions unbeknownst to me: Removed last day and hour requirement for PS contribution Made top heavy requirement 5% defined contribution minimum as written in the document for combo plans. For top heavy, must be employed on last day. No SECURE 2.0 amendment for "no top heavy for otherwise excludable employees". A few different questions as I confused myself (do not work with SH match in combo plans in general): For an HCE but non-key who is excluded from CB plan categorically: HCE made a deferral and received 4% SH match, but they do not want to allocate any profit sharing. What is the top-heavy requirement? Do I need to provide additional 5% PS allocation? For non-HCE employees who became eligible during 2025 due to 6 months eligibility: Employee enters the plan during the year after 6 months of service Terminated before EOY Made deferral and received 4% match Not in CB due to 1 year wait Do I need to provide 5% top-heavy PS allocation? How about for the same employee who was employes at EOY? I so confused myself here as I have not seen a document written this way. Thank you

I am not sure if the following is discriminatory, so checking out to be sure. Company started 2 plans in 2025, both with vesting starting with inception of the plans (both calendar). Joe terminated later 2025 (he quit) and gets no monies because terminated with 0% vesting in both plans. He was eligible as of 1/1/2025 (DOH goes back a few years) The company wants to rehire him in 2026 so no break in service but want to exclude him from benefitting under both plans. He would have a unique job category. So, if they sign an amendment now and then rehire him a few months later (all during 2026), is this a discriminatory approach? Another approach is to have the amendment signed in 2026 but rehire him in 2027 but that is not what they want to do. Thank you

A theoretical (but coming up) question as I never had to deal with it before. Client has a straight PS plan, no other provisions. Initial set up was pooled account. A few years later, they wanted to have a participant directed account (because they heard it was better thru the grapevine). Thay asked my opinion and knowing this client, I told them it will complicate their lives but I cannot provide any recommendations on switching. Lo behold, they switched 2 years ago and now they may want to switch to pooled account because too complicated for them to deal with. Hmmm (not saying I told you so). They want to close up the participant directions and transfer all to pooled account. One way to do is leave the participant directed account as is and put in all future contributions into a pooled account but they will prefer dealing with a pooled account only. What issues are they facing, if any? Any BRF issues? Anything else? Thanks

Why would we want to bend over for a client when we know that something is wrong even if we will not be accountable? Let them walk away. Ethics, professionalism as well as E&O comes to mind (you know very well the client will come after you no matter what), not worth it.

I have seen this and IRS was not happy upon an audit. As you stated, it could be BRF issues as well as 414(s) issues.

Thank you all for your input, this was a great dsicussion.

Absolutely correct

Of course I care on the quality of the data I get and question every aspect of it. I agree not to play data police but up to a certain point. At the end of the day, any hiccup will be something I would be dealing with, whether I like it or not. I am not making the client's error/mistake my problem especially after I check and question it. Once I get the CPA involved, I will see what and if I will move forward. I have mentioned the plan document provisions and that needs to be done for compensation recognition.

I am definitely not making a decision and may even walk away

Unfortunately was not provided any info about the flavor. Client is being difficult to provide the information. Waiting to hear from the CPA, if ever. All I got was, they were compensated as 1099 since they are in college.

A client paid their children 1099 i/o w-2 at the suggestion of their CPA, this is for 2025. The children received W-2 for 2024 and at least one them were eligible to participate in the pension plans. I am told to accept 1099 as w-2 (which is the compensation definition in the plan document). How can I accept this, makes no sense? Here is the definition from basic plan document. Checked all the code etc and no reference to any 1099 equivalency. "W-2 Compensation" means wages, within the meaning of Code section 3401(a), and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code sections 6041(d), 6051(a)(3), and 6052. W-2 Compensation shall be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2))." Anything I am missing?

Thank you both

With my limited knowledge (or lack of it), was he not supposed to roll into a regular IRA first and then convert?