metsfan026

Thanks everyone! I'll file them, but I just wanted to be sure that the electronic filing of the 5558 is now acceptable for the '24 Plan Year as well?

I vaguely remember reading that you no longer needed to file a Form 5558 and that the extension was automatic. Am I mis-remembering something? Or is it that they can now be filed electronically for the 2024 Plan Year, as opposed to sending the paper filing? With the deadline on July 31, I wanted to make sure I wasn't just imagining something. Thanks in advance!

Thanks! So basically the Plan should make a contribution into the QNEC, but does the contribution also include the lost Safe Harbor Match they would've earned?

We have a client with a participant who wanted to start contributing Roth contributions at the beginning of the year, but there was a payroll error and they never started. Now the participant is asking how they can make up the missed contributions, since they are looking to make sure they get the Safe Harbor Match. The question is, how can the participant makeup any missed contributions? They are asking if they can fund them themselves and send a check. I didn't think this was possible, and that it should have to be done through payroll (even though it's Roth). I just wanted to make sure that I wasn't missing something. Thanks in advance!

Good morning everyone, thanks in advance for the help. We have a client that is looking to acquire another practice. As part of the agreement, the group being acquired wants them to provide a matching contribution for the first year. This is a non-Safe Harbor Plan, but does allow for a discretionary matching contribution. There are no Highly-Compensated Employees included in the group being acquired. No matching contribution is being made to the group as a whole. Since there is no match and no HCE, I don't see an issue from a testing standpoint as the HCE would be 0%. So would I be right to say that there is no issue with giving this small group a discretionary match as long as there remains no matching to the rest of the company as a whole?

Question on how to handle a minor issue. We have a client who inadvertently deposited a 2025 contribution on 12/30/24 so it's showing up on the 2024 Asset statement. When filing the Form 5500 would you: 1) Show it as a liability to remove it from the assets 2) Just remove it from the assets and act like it was deposited on January 1 It's not a significant amount, just curious how others have handled it in the past. Thanks in advance!

So if it says it's discretionary, they are allowed to give to the son and not the parents?

We have a client that made the Safe Harbor Match to all of the Non-Highly Compensated employees. When it comes to the HCE there are three, the owner, his wife and their son. Obviously there's no such thing as discrimination to a Highly Compensated Employee and they don't have to make the Safe Harbor Match to themselves. I assume there is no issue, then, if they want to provide the Safe Harbor Match to their son, but not themselves? I don't see an issue, I just want to make sure I'm not overlooking anything. Thanks!

I got a question from a client in regards to how they should be counting hours for a Plan Year. Is it the actual hours worked from 1/1 - 12/31 for that Plan Year? Or should it be based on the hours for the times that match the W2 (for instance, the first payroll on the W2 is all hours worked in the prior year but the pay date carries into January)? Hopefully that makes sense. Thanks in advance!

I've just never come across this. If a participant works over 1,000 hours during the Plan Year but is on FMLA at the end of the year, does that still qualify them as being employed as of the last day of the Plan Year and therefore eligible for a Profit Sharing Contribution? My gut is the answer is yes, I just wanted to confirm. Thanks!

Is there a company that everyone uses to help locate terminated participants who we can't locate? The company we used to use seems to no longer be operating, so we needed a new one. Thanks in advance!

I have a client that has not yet adopted the self-certification for Hardship Distributions. I have a situation where it doesn't distinctly fall under a Hardship per the IRS Safe Harbors, but it's obvious there is a financial need. The participant needs to move to a new rental with their parents, who are terminally ill. So it's not the purchase of a primary residence and it's not for the medical bills, but they are moving/renting in order to get treatment and care for them. Is this a situation where we can still approve the Hardship?

They are purchasing another employer and looking to give service credit for their prior time

We have it in there yes, but wouldn't doing it for a few and not everyone cause different testing issues? Maybe I'm overthinking it.

Sorry for all of the questions lately. We have a client who does a flat 4% Safe Harbor Match who is looking to bring in a new group of employees. For this new group they want to give them the same 4% match long-term, but for the first year they want to give them a 7% match. Is that something that we can even do, if it passes the necessary ACP testing? Or is it not even possible to do since the match is a Safe Harbor? I guess can we give only certain employees a 3% discretionary match but not everyone (assuming it passes the necessary testing)?

Thanks everyone, I really appreciate it. We've been talking to the prospective client about what they are currently doing and how we'd move forward. Basically, if they wanted to limit the exposure they can do the 3% Safe Harbor with a discretionary match (66% of the first 6% deferred) as a way to push extra money to the owner (since the ages/service make a Profit Sharing hard to structure).

So basically if it was a fixed match it's OK, but as a discretionary match it would fail the formula. It can be done, but up to a maximum of 4% of comp. And yes, the Plan does have a small eligibility with only the owner deferring. So if we did go with the Triple Stack Match, would there be an issue with only the owner deferring if it was documented that no one else opted to participate?

If a Plan is giving a 3% Safe Harbor to everyone, could they also augment that with an aggressive discretionary match? Something to the effect of: 425% of the first 6% of compensation deferred I've seen someone doing this and it just looks odd to me, so I wanted to confirm it was alright. Thank you!

That's what I thought. Are there any concerns if it is only the owner that contributed to the 401(k) that I'm overlooking (assuming all of the employees opted out in writing)? We are giving a 3% Safe Harbor to everyone regardless, then adding on a discretionary match for the year.

This is a discretionary match, not a Safe Harbor (they are doing a 3% Safe Harbor) Could they contribute 100% of all 401(k) contributions as a discretionary match (or more than 100%).

Good morning everyone, and sorry for all the questions. Been getting a lot of plans recently that have some interesting quirks/potential issues. We have a plan that's coming over that's current matching formula is: "133 1/3% of the first 3% of contributed eligible compensation, plus 100% of the next 3% of contributed eligible compensation" Question 1) I've never seen a matching formula in excess of 100% of compensation, so I wanted to confirm that this was acceptable. Question 2) They've asked about increasing the matching formula. Can they simply do 133 1/3% of 100% of contributed eligible compensation? Or is there a maximum of 100% of compensation? Thanks in advance everyone!

Just a question, because I honestly haven't dealt with too many frozen plans. If someone is having some cash flow issues and want to freeze their cash balance plan for only 1 year, is that an issue? I just wanted to make sure. It's a discussion that's being had, but not necessarily going to happen. It would be for 2025, since no one has worked 1,000 hours for the year.

I'm taking over a solo 401(k) Plan that has exceeded the $250k in assets and therefore need to file the Form 5500. It used an Adoption Agreement, but what I was provided was dated back in 2018. I'm just confirming, even these types of plans had to be restated prior to July 31, 2022 correct? With the need to provide the date/serial number for the restatement on the Form 5500, I wanted to make sure.

We have a new 1 person plan who failed to file a Form 5500 despite crossing the $250k threshold that requires it. I was looking at the DFVCP program, but one-person plans don't qualify for it. Is there a correction program for plans that file Form 5500-EZ? Trying to figure out how to get them back in compliance. Thanks in advance!

I know a Safe Harbor Match is a discretionary true-up, if it is done on a payroll-by-payroll basis. I just wanted to confirm that a document can allow a QACA match to be handled the same way? Thanks in advance!