MGOAdmin Posted September 8 Posted September 8 In 2026, if catch-up reclass is required for an ADP test failure, do we need to convert the catch-up to Roth for employees that are HCE due to compensation? What is a plan does not allow for Roth, does the reclassed catch-up get refunded instead?
WCC Posted September 8 Posted September 8 58 minutes ago, MGOAdmin said: In 2026, if catch-up reclass is required for an ADP test failure, do we need to convert the catch-up to Roth for employees that are HCE due to compensation? Yes 58 minutes ago, MGOAdmin said: What is a plan does not allow for Roth, does the reclassed catch-up get refunded instead? Yes David D 1
justanotheradmin Posted September 8 Posted September 8 Keep in mind that HCE does not equal HPI . The Roth as catch-up applies to highly paid individuals, not highly compensated. There will be some overlap, but not always. Belgarath and CuseFan 2 I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?
Peter Gulia Posted September 8 Posted September 8 Consider that a working partner (or member of a limited-liability company treated as a partnership) might be a self-employed individual who has no FICA wages and so is not § 414(v)(7)-affected. CuseFan 1 Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com
FishOn Posted September 9 Posted September 9 Would the plan adoption agreement need to have In Plan Roth Transfers selected in order to accommodate the recharacterizations of catchups for HCEs who are also HPIs?
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