"BACKGROUND: 403(b)(9) non-electing church plan offers an in-plan annuity. In the absence of a Form W-4P, the default withholding for annuities initiated prior to 2022 has been 'married with 3 allowances'. It is my understanding that the Plan must notify annuitants annually of their right to elect withholding that differs from this default rate. QUESTION: For these pre-2022 initiated annuities, is the Plan able to continue withholding at the old default rate of 'married with 3 allowances' indefinitely, for annuitants that never submit Form W-4P in future years?"

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"The wrong compensation was used in the allocation of the 2020 profit sharing allocation. The Plan Sponsor left off a bonus for 3 employees when they reported the compensation to the TPA. We have determined an additional $5,000 + investment earnings must be deposited to the Plan. For 2021, the earnings percentage was 11%. For 2022, the earnings percentage was -18%. Do you use the negative earnings for 2022?"

"What advanced notice, if any, is required to be given to plan participants when there is a significant change in health plan benefits due to a stock purchase transaction? Here's the situation -- Company A is about to be bought by Company B in a stock purchase transaction. Company A currently participates in Parent Company's fairly rich health plan as part of a controlled group. Company A's participation in Parent Company's health plan will cease at the time of the transaction and Company A will sponsor a new MEC plan going forward. Parent Company (the Seller) doesn't want to give any notice whatsoever prior to the transaction. Purchaser is concerned about potential liability related to claims not covered by the MEC plan, that would have been covered by the Parent Company's richer plan, if employees are given zero notice. Does the 60 day advance notice requirement for changes during a plan year apply? I would think not, as the new MEC plan's plan year will not begin until the day following closing so it's not really a mid-year change. But it seems illogical that no notice is required in this situation. Any thoughts appreciated!"

"Is there a way in the plan doc to cut off the need to look back to the beginning of the company to determine eligibility. For hours of service can we say you have to complete X hours of service within the last 5 years to be deemed eligible? I know there is the option for specified months -- hours of service, but this still does not seem to take away from the fact that we would have to look back to the start of the company to determine if anyone ever met these requirements in case they are hired again. We are trying to find a way to not have to look back to the beginning of the company in cases where people may be rehired to determine if they completed the eligibility requirements before."

"For 2022 a participant (age 50 spouse of owner) has W-2 salary of $27,500 with 401(k) deferrals of $27,000 and $1,100 in SH Match that has been deposited over the year. Is this possible?"

"SECURE Act 2.0 permits sole proprietors (and LLC taxed as a sole proprietor) to adopt a 401k plan including salary deferral contributions effective retroactive to the first day of the prior tax year up to the due date for filing the sole proprietor's individual tax return for the prior year. Why didn't this section of the act include partnerships? Can a partnership adopt a 401k plan retroactive to the prior year and allow partners to make retroactive salary deferral contributions?"

"This is hypothetical: Owner wants to add a facts & circumstances hardship provision to plan in order to take a large distribution. As plan administrator, he will be the arbiter of 'heavy and immediate' need. What if the plan gets audited by the IRS and they determine the need really was neither heavy nor immediate? Like, maybe he used it to purchase a stake in a thoroughbred race horse or a down payment on an office building. What is the redress? pay it back? Disqualification?"

"An employer (not agricultural) is apparently hiring some foreign workers under some program (name/number of program as yet unknown, other than it is not H-2A). Wants to exclude them as a class, subject to coverage testing. Although this is a labor lawyer question, any thoughts as to whether it is generally allowable to exclude, as a class, foreign workers under various work/Visa programs, again, subject to coverage testing? P.S. -- it appears that all of these workers will be from Mexico. It seems to me that an exclusion that has the effect of excluding only employees of one nationality would be a violation of some discrimination regulations."

"I'm looking for some guidance on how to unravel a mess we've created with adding both an FSA and HSA for 2023. My wife started a new job with her own healthcare coverage and added an FSA with $250 for 2023. I have a HSA maxed at $3850 and partly paid by my employer. She didn't realize this would create a problem with having both FSA and HSA in the same year and it's too late now to change the plans. I found an older post here from 2009 and wanted to confirm that the advice was still current. The post says to suspend contributions to the HSA and to spend down the FSA asap. Once the FSA is empty, restart the HSA contributions and I can then contribute up to the annual amount. I'm also seeing conflicting posts that say FSA coverage applies to the whole year regardless of whether it's spent down so disqualifies HSA contributions for the whole year. It also doesn't say if there are penalties or what to do with any money contributed to the HSA. What happens to this money? Does it need to be removed from the HSA and/or taxed at the end of the year? Can I continue with contributions to the HSA and just pay the tax? I also found a post about the possibility that her FSA may include a clause where 'the spouse can elect that the money in the FSA can only be used by family members not covered by the HSA' so checking that out. I'm looking for any help on what to do next. Any suggestions would be appreciated."