Terry Power

Almost all "transfers" of a single employer 401k plan moving into a PEP are Plan Mergers, not Plan Terminations. I've never had one that was a "termination". No step-up in vesting, no "distributable event" for the prior plan. Adoption into a PEP will constitute a "restatement" of the prior plan, btw. No need to restate a plan as long as it is handled before the restatement deadline via the plan merger. On the final Form 5500 for the single employer plan, it should indicate the name of the successor plan, EIN of the PEP Plan Sponsor (PPP). Testing is aggregated for the full year. Annual 402(g) limits still apply (no "double dipping" in deferrals....). Lots of moving parts in a PEP. Proceed with caution if you haven't done any.

Happy to chat about this if you'd like, justanotheradmin.... Terry Power The Platinum 401k, Inc. tpower@theplatinum401k.com 813.774.3366

Good questions. The work that your client is asking you to perform is for the previously existing single employer plan for the 2022 short plan year. They (you) will need to file a "Final Form 5500" for that previous plan (with a final audit, if one is required) for 2022 and on that 5500 indicate that the plan was MERGED into the XYZ Pooled Employer Plan. It is almost certainly a plan MERGE, not a TERMINATION, btw. You may be able to reach out to the new TPA on the PEP for clarification. Happy to chat as well. Terry Power tpower@theplatinum401k.com 813.774.3366

The provisions of the Secure Act that were incorporated in the legislation signed last week changed the new plan credit for employers from $500 to a maximum of $5,000 ($250 x number of eligible employees). Would the credit also apply for an employer who currently has no plan but becomes an adopting employer of a 413(c) Multiple Employer Plan? Thanks!