Jakyasar

9/15 is the deadline. It is Roth deferral Thank you for your input

Owner only 401k plan. Owner deducted 23k for 2025 on the w-2 but deposited just now. What kind of correction is needed, if any? If need to adjust, I am assuming DoL calculator cannot be used, correct? What other means can be used? Let's say the correction is $100, is this a deductible expense? If yes, would be for 2026, correct? Thank you

Any takers? This post was merged with another posted the same day.

Have been reading and researching on this and getting very confused and losing my mind. Hopefully some has an insight. Never did this before and need to (CB plan - PBGC covered, top heavy and NOT underfunded). My system does not to prior benefit structure testing so need to do all manually (confirmed with the vendor). Plan effective 1/1/2021 and combined with a DC plan. Plan is hard frozen early 2025 with no one accruing a benefit (except one owner getting AE increase as past NRA). I do not see any relief under SECURE 2.0 for this. I did the prior benefit structure testing and failed by 1 so need to 11-g. The confusion (or not understanding) I am having is that the 11-g is for a current year increase so how do I include this person into a testing that is performed at beginning of year? This person will have 1 additional year of accrual/participation versus others. I am sure I am not making sense here or totally missing something. Thank you for your time and any insight you can provide.

Hi all Does anyone have a good write up on how to perform 401a26 prior benefit structure testing and how to perform it especially with some examples? Doing some research getting some conflicting information. Basically, have a hard frozen plan in 2025 (early in 2025 so no accrual) but the plan is overfunded so subject to 401a26 - this is confirmed. Also, terminated the same plan in mid-2026 and again need to test it for 401a26. From what I understand, I can pick the termination date of 7/31/2026 as spot check date for 401a26, correct? This is the first time I have to deal with it. Thank you

Not at all conflated. Dealing with keys only. No HCE and no key are benefitting under the DB plan and only getting non elective safe harbor in the DC plan. In my case they are one and the same.

I want to add twist as I have never seen this situation before. If the 401a26 prior benefit structure fails, can I do the following, assuming it is an acceptable method according to law: 1. Provide a few participants enough benefits to bring them up to 0.5% when testing for prior benefit? If ok to do so, do I need to bring the annual accrual to 0.5% level as well or could be lower to bring the prior benefit structure just to 0.5%. 2. Now that I am providing some slight accrual to these few participants, do I need to provide them the extra 2% PS allocation for top heavy purposes. As a reminder, no key is getting any benefit under the db plan. I hope I am making some sense. Thank you

David, thank you for your input.

On a separate note (and hopefully on topic) for the plan documents and related services provided by RKs, I have seen enough of clients who were provided blank documents for their restatements where the RK's simply told the client to fill out the documents by a certain date. Many of these clients did not do them simply by either ignoring them or not understanding them. When they contacted RKs for help, no one was there to help them out. I have seen and heard this by more clients than I care to count and they were all late for their restatements or not done. Surprisingly, they all got help for the initial set either by RK or the broker who set them up and then totally disappeared. If the client is informed about the ramifications of not being in compliance and also offered a good deal by the TPA, why not have them come over (assuming everything else is in good order). Both Paul and Bill had very good points and observations and yes, they mostly come with compliance errors that need to be fixed, I certainly have seen quite a few myself. as a reminder, nothing is free and good service does not come dirt cheap. if a client wants good service and free/dirt cheap, I certainly let them go somewhere else. My 2 cents FWIW

Hi Having a brain freeze for a change. DC/CB combo. Both plans are top heavy, separately and combined as well. CB is hard frozen i.e. no one gets an accrual. There are quite a few participants excluded from the CB plan categorically. DC document says, top heavy is satisfied by DC plan but no % is provided. In addition to the 3% NESH already being provided under the DC plan, do I need it to provide another 2% PS allocation at all, especially for the participants who are excluded from participating in the CB? The only allocation to the key employees is the 3% NESH. There is no gateway requirement. Thank you

A follow up situation, in theory. If 26 active participants were achieved during 2025 but 3 of them terminated during 2025 (entered 7/1/2025 but terminated 8/1/2025) with no vested balance (or vested balance), would this plan still be covered as 26 actives were achieved during 2025 and once the plan hit 26 actives, no going back?

Thank you, really sucks that the rules are so stringent and have no flexibility.

Thank you for sharing your information. When you say "no", do you mean it must be covered? I just cannot find any way out of it by law.

Hi Law firm. CB plan, effective 2024. For 2024 had 15 active participants with 0% vesting - vesting effective with inception of the plan. During 2025 exceeded 25 active participants (26 in total), again all with 0% vested balances. During 2026 dropped to 20 active participants. No partial termination issues. It will never exceed 20 again. So, during 2025, plan is covered by PBGC and will be so for 2026 and all future years, at least according to PBGC rules that I am aware of. Any way out of this, is there anything I can do? Am I missing an option here? Really sucks that for 1 year only they are paying the price for it. Thanks

Thank you for your input, yes I would be testing OEX separately. Everyone in the main test is getting whatever they need to. Forgot about the no t/h requirement for OEX but I was mostly concerned about the ADP test.