metsfan026

The document includes it, but the client says they didn't pay any. So the total salary is under the HCE so that what it is? I just want to make sure I'm understanding

This is a situation I've now encountered, so I wanted to check. - Participant has no ownership stake in the company. - In 2023 they made about $200k, therefore they were considered an HCE in 2024. - In 2024 the participant missed several months due to being on active military duty, thus earning about $75k So, my understanding is that for 2025 they would not be considered an HCE. Is that accurate? Thanks in advance!

We have a few Plans that were adopted in February or March of 2026, as of December 31, 2025 (as allowed under Secure 2.0). Should we be filing extensions and Form 5500 for these Plans? I know under Section 201 of Secure 2.0 it technically isn't required, or is that just for Plans adopted after the extension date? I don't want to miss anything, or file an extension if we aren't supposed to. Thanks in advance!

Good morning, we just took over a plan with a unique Safe Harbor formula and I just wanted to make sure it was acceptable. The formula is: 100% of the first 1% deferred + 50% of the next 5% deferred So, you basically get 3.5% if you defer at least 6% (instead of the typical 4% of comp if you defer at least 5%). Is this an acceptable formula? Just not one that I've seen before, so I wanted to double check. Thanks in advance!

We'd use everyone's salary for the 6% cap, correct? So technically everyone's salary is eligible, so it's 6% of all of the eligible compensation for the Safe Harbor + Profit Sharing limit? I just want to make sure I'm thinking it through correctly

Thanks. That plan was in place already, obviously the recommendation is to go to a 3% Safe Harbor but they may not want to take it away

I'm running into a problem and just looking for some insight. We have a Plan that has immediate eligibility for the 401(k)/Safe Harbor Match, but we are looking to do 21 & 1 year for the Profit Sharing & Cash Balance portions. I know the Safe Harbor Match (for everyone) gets factored into the 6% maximum deductible contribution for the employer contributions. That said, for the people who are eligible for the 401(k)/Safe Harbor, are they factored into the rest of the testing for the PS/CB? For instance, when we are doing the rate group testing are those people factored in? Or do we only test for the people who are eligible for the Cash Balance Benefit? I hope that makes sense. Just trying to make sure I have all of my bases covered

I'm 99% sure I know the answer, but I wanted to be 100% sure. If a participant is on maternity leave at the end of the year, are they still considered employed on the last day of the Plan Year in order to be eligible for a Profit Sharing contribution (the participant had worked over 1,000 hours prior to going out on leave)? Thanks in advance!

Right, but technically the participant isn't employed on the last day of the Plan Year so they shouldn't get the Top Heavy contribution. I'm problably overthinking this though

We have a client who has an employee who is only receiving severance payments and no other salary. I just wanted to confirm that all of that compensation is ignored, and therefore they wouldn't get any type of contribution (Profit Sharing, obviously not since they are under 1,000 hours, but a Top Heavy contribution was my only thinking). Thanks in advance.

Thanks! And, just so I'm clear, the Safe Harbor Match doesn't override the Top Heavy requirement in this case due to the presence of the Cash Balance Plan? (And, unlike the 3% Safe Habor, the Match doesn't apply to this Top Heavy requirement so participants who are getting the match will also get the full 5%?) Sorry, I just want to make sure I'm not overthinking this. Thank you!

Would we still test the plans combined?

We have a Plan that was once a dual Plan, but has since Frozen the Cash Balance Plan leaving the Profit Sharing Plan to operate as a stand alone Plan for now. It's a Safe Harbor Match (safe harbor formula). The Top Heavy Testing is right on the border, but since it is a Safe Harbor Match I believe they are exempt from the testing and are only required to make the Safe Harbor? I just wanted to make that was still the case, since there would be no Cash Balance Contributions and the Key Employees are only going to receive 401(k) and Safe Harbor Matching contributions. Thanks!

We have a participant who is asking if this situation falls under a Hardship: Due to a legal divorce, the participant has to move out of their house and needs a deposit for an apartment (first and last month's rent). It's not purchasing a primary residence, so I wasn't sure if this would apply. Thanks in advance for your input!

We have a Cash Balance Plan that froze it's benefits early in 2025 (before anyone incurred 1,000 hours). Generally they have been making the 7.5% Profit Sharing contribution, in conjunction with the Cash Balance Contribution. My question is, with the Cash Balance frozen are they still obligated to make the Profit Sharing? Or is that back to a discretionary contribution and they can make any level since there's no Cash Balance contribution being made (there is no requirement).? Thanks in advance!