Converting SIMPLE IRA to 401k - Notice REquirement

A literal reading of IRS Notice 2024-02 seems to suggest that each person needs to be told their own personal precise amount of 401(k) remaining for 2025 based on their own YTD SIMPLE IRA Contributions:

"Yes. Under § 1.401(k)-3(d)(2)(ii)(D), a notice must accurately describe the type and amount of compensation that may be deferred under the plan for the notice to satisfy the requirements of section 401(k)(12)(D), (13)(E), or (16)(B)(iii) of the Code."

1) the notice is due 30 days before the switch so this is not possible.

2) Nothing in this seems to really suggest that an individualized notice is required for every participant.  We are hearing some say that not only do you have to provide them an estimate of what remains for the year 30 days in advance of the switch, but that you also have to follow up after the switch to provide the exact amount available for the year.

While I can see the interpretation of the text, to me the spirit of the communication is to disclose the total limit available for the entire year between the SIMPLE and the 401(k).  If the above is in fact the requirement, it becomes almost prohibitive in terms of making a transition like this.  Small employers cant always get nice Excel exports, and fewer have the ability to do all of the mail merges needed.

Please tell me what you guys think!

30 minutes ago, austin3515 said:

A literal reading of IRS Notice 2024-02 seems to suggest that each person needs to be told their own personal precise amount of 401(k) remaining for 2025 based on their own YTD SIMPLE IRA Contributions:

I disagree.  The question to your quoted answer is must the notice describe the limit on contributions.  You have to describe the limit, which is a combined limit based on the length of time each plan existed. The answer must be read in the context of the question.

We describe the limit combined limit for those who are not catch-up eligible, those who are catch-up eligible, and those who are super catch-up eligible.  We also include the statement that contributions made to the SIMPLE count towards the combined limit and reduce what can be contributed in the SH plan.

Completely agree.  " notice must accurately describe the type and amount of compensation that may be deferred"

Key word is "describe".