metsfan026

Thanks Paul. If someone has 2 years of service though, we have to maintain them as 20% vested correct? We can't take that away from them since they earned it under what the document said?

Normal Retirement should be 65 (it was setup as 62) Vesting is going from 6-Year Graded to a 3-Year Cliff I'm not sure the NRA has a big impact on anything. I guess we need to give everyone who earned vesting during that time that vesting, but make them 100% after 3-years?

We are taking over a client whose TPA messed up the original plan setup and didn't put in the correct provisions for certain things (particularly Normal Retirement Age & Vesting Schedule). The question is, how far back can we go to correct these things (the plan is roughly 2 years old, the client just didn't notice the error until now)? Or can we not do them retroactively and just have to do it moving forward. I'll be honest, this is one I've never encountered so I wanted to be sure we did it correctly.

Thank you! I thought we didn't have to include it, but then I started second guessing myself. Very much appreciated

I tried to find this, but couldn't seem to. If an owner is RMD eligible, actively working and receiving a Profit Sharing contribution for his 12/31 balance do you use: 1) The Investment Balance 2) The Investment Balance + any Receivable contributions made after the close of the year I just wanted to be 100% sure, as I'm started to confuse myself. Thanks everyone!

Is there a limit to the amount of rollovers a participant can take, using the 60-day window to repay the distribution/roll it into an IRA? I believe it's limited to one per year, but I just wanted to confirm. Thank you!

What is the required time necessary to amend a matching contribution? Currently it is a mandatory match, but they want to switch it to discretionary (it is not a Safe Harbor Match). Do they need to give more than 30 days notice? In other words do they still have time to make the change for 2026?

How much notification does a 403(b) need to give participants if they are amending the Plan to go from a mandatory matching contribution to a discretionary? Is it 60 days? Thanks!

I'm not arguing, it just seems odd to me that if a Highly Compensated Employee opts not to get a contribution in the Profit Sharing Plan his/her salary is excluded from the calculation since they are still benefitting/participating in the Plan. They just aren't getting a share of the Profit Sharing monies.

Got it, thanks. So if we give her Profit Sharing, we can then reclassify the 401(k) as a catchup contribution? So technically she'd receive contributions greater than 100% of compensation? I just always was told it was eligible compensation, so if an HCE opts not to receive a Profit Sharing contribution their compensation is still included in calculating the 25% deductible limit. I guess that's not actually accurate?

I'm not necessarily trying to get a Profit Sharing contribution for her. I'm more looking to use her salary to get him a bigger Profit Sharing contribution (if that makes sense).

So if we re-classify some as of her 401(k) as a Catchup (say it's $15,500 as her 401(k) and $7,500 as catchup), she can then get 25% of the $7,500? I also thought it was 25% of eligible compensation & deferrals: "25%1 of all participants' compensation,2 plus amount of elective deferrals made." So my thought was the total compensation is $123,000, therefore he could get 25% of that or $30,750 (instead of just 25% of his $100,000). Is her salary solely not included because she deferred it all? $30,

I just want to make sure I'm accurate in this. A Plan has two participants, a husband & wife, both of which are deferring th maximum 401(k) contribution for the year: Husband - $100,000 salary Wife - $23,000 salary Wouldn't the maximum deductible contribution be 25% of the total between them ($123,000 x 25%)? I know the wife's full salary is being deducted as a 401(k) contribution, but couldn't we still use her salary and give the husband the total 25% of their combined salaries as a profit sharing contribution since her salary is still technically eligible income? Thanks in advance!

For two it was under $1,000. One person the checks went to the participant, as requested, they just never deposited it. Yes, there is going to be a 2025 requirement, since this money is still there. How do we show this money coming back into the Plan? Or if this was the only money left at the end of '24 is there still a filing requirement? So if the Plan was officially terminated in '23, for '24 there's no minimum funding requirement and therefore there is no 2024 Schedule SB required? I just wanted to be sure. So this question would be no (I just want to make sure):

We have a Cash Balance Plan that terminated in 2023. The bulk of the distributions were completed by 12/31/23, with a few finalized in 2024. All of the 2023 distributions were reported on the 2023 Form 5500, but it turns out 3 checks get returned as undeposited and the money was back in the account as of 12/31/24 (it is the only money that is sitting there, totaling under $3k). So how do we handle that in terms of the Form 5500: Do we have to show it on the Form 5500? The participants were sent 1099-R for the distributions in 2024 (for 2023) and it was already reported as distributed on the Form 5500? If we do have to report it on the Form 5500, how is it shown as coming back into the Plan? It's not really a contribution... If a Form 5500 is required, is a Schedule SB also required? Or is it just the SF at this point? Thanks everyone. This isn't a situation I've run into before. The Plan is to have the money rolled into an IRA on the participant's behalf by 12/31/25, but trying to handle the '24 Form 5500 first.

Great, thank you!

Great, thank you! What if it is a 1-person plan where the SB isn't required. Is it still just that the first Form 5500 is filed for year 2 since the plan was retroactively adopted?

We have a plan that was adopted after the extension deadline (as per Secure Act), so there was no extension filed. How do we mark that on the Form 5500. I'm getting an error when I click off: "If this is a retroactively adopted plan permitted by SECURE Act section 201, check here" Is that the right way to indicate it on the Form 5500?

Sorry, SEP is not something we normally work with but someone is asking me so I'm trying to help them out. They are just setting up a SEP Plan for a group, 5 employees during the year: Can you have a last day requirement to get a contribution? Can you have an eligibility period? If so, can it be setup similarly to a 401(k) Plan? Are there specific rules? Thanks in advance!

We have a plan that terminated as of 12/31/24, but we just found out that there was a residual that came in during 2025 and then immediately paid out. How do people handle this type of situation? Do we just file the 12/31/24 as the final? Or do we have to do an additional 5500 showing the money in and out in '25 (which is a small amount)?

If someone has an outstanding loan but has now incurred a hardship (notice of eviction), can they take the Hardship Distribution? I'm probably overthinking this, I just wanted to be sure. Thanks!

Yes, I had already said that to them. It's the owner of the company who is taking the loan, so I'm guessing they are going to loan the money to the company, but I'll make that point clear to them.

I think I know the answer, but the client is asking if they can take a loan and/or in-service distribution (as allowed by the Plan Document) out of the 401(k) Plan and use that money to fund the Cash Balance Contribution (and for the in-service, potentially pay it back under the 60-day provision). Is this something that would be allowed? (Again, I think I know the answer but I want to be sure)

What are the penalties if someone can't fund their minimum contribution? It's been awhile since I've been in this situation, so I wanted to be sure what we were looking at. Thanks in advance

Agreed 100%. Would there be an issue to do this retroactively to 2024? Just curious, because I know they are struggling now to come up with the money, so freeze their contribution for '24, '25 & probably '26 before revisiting starting contributions back up?