"DC Plan - employee terminated last month. To prevent her from suing the company (no details on that) they will be giving her $8,000 severance pay that will show on her W2. I don't think they give her the guaranteed 3% safe harbor on that amount because it was not given for services rendered and she would not have gotten it had she stayed with the company. True or not? The document discusses post-severance pay (bonus, commission, etc.) but not this. TYIA."

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"We have a client who opened a new plan in August 2022. The plan effective date is 1/1/2022. Deferrals did not begin until Oct 1, 2022. It is a basic safe harbor match plan allocated on a plan year basis. The match will be calculated after the end of the year. My question is must the match be based on compensation only from Oct 1 through Dec 31 or the entire year? Example: Employee has $10,000 in wages each of 4 quarters. Oct - Dec defers $2,000. Would this person get a $400 Match (4% just on 4th qtr wages), or a $1600 match (4% on full year wages)? Nothing in the plan limits the compensation or match period. Appreciate your comments."

"We have a new plan where the trustee wants to take an in-service distribution of $300k. He is 43 years old. He wants to pay all the taxes on the distribution. I have never administered where it was allowed for anything other than 59.5 or early retirement. Can a plan allow in-service prior to 59.5 or early retirement?"

"Hi An interesting situation that I never encountered. Calendar plan with 3 provisions 401k deferrals 3% non-elective SH PS with integrated allocation. 1000 hours+last day rule. Owner is younger than the employees so worked out great. 5 participants, 2 HCE and 3 non-HCE. 2 additional HCE's are excluded categorically All 3 non-HCEs terminated during 2022 before the last day, 2 with under 1000 hours and 1 with over 1000 hours. Plan passes both ratio and ABPT. Since all non-HCEs are getting no PS allocation but only 3% SH, I do not think the plan can rely on PS allocation to be safe harbor anymore and needs to be tested for 401a4, do you agree? Anything else I am thinking of? As a bonus question, all 3 employees left - 2 got new jobs and 1 for difficult maternity and applied for some kind of disability. Would that constitute partial termination? They hired additional employees during 2022 of which only one remains employed. Any comments are appreciated."

"I was just wondering, since I never seem to find formulas like that in any documents I review. Seems like it would be a great idea for a sole proprietor, where income could fluctuate widely, and that way they don't really have to accrue a more-than-significant benefit until after the net earnings clear some amount the person would need for living expenses. Like, a contribution credit of "5% of compensation plus 75% of compensation above $100,000" where that could eliminate the need to worry about a big obligation in a "bad year". (Okay, maybe throw in a 401a26 failsafe, too.) Plus it's been a decade-plus since I even saw a super-integrated DC plan, and always liked the term."

"Owners of an ALE purchase a non-ALE 10/1/2022, making the non-ALE a member of an Aggregated ALE group as of what date? Applying the normal 2022 look back monthly-average-FTEs to the prior non-ALE falls below 50 (even after including the ALE employee numbers for Oct-Dec). Does the non-ALE become a member of the Aggregated ALE group on 1/1/2023 or not until 1/1/2024? Thanks"

"I have a solo 401(k) that has already been fully funded for the 2022 plan year ($61,000) and they recently decided they want to open a cash balance plan for greater tax benefits. If they open a cash balance plan, their solo 401(k) will be over funded $22,500 in employer contributions. They would like to remove the overfunding from the 401(k) plan to open and maximize their cash balance plan for 2022. What type of correction would this be (excess annual additions, mistake of fact)? What is the best way to go about correcting this?"