"Fiscal plan, plan year 7/1/2022 to 6/30/2023, owner and spouse only. Limitation year is plan year=fiscal year. 415c limit is based on 2023. They take salary once a year and as of 6/30/2023. The 401k deferral portion, is it based on 2022 or 2023 limits? Do not worry about the multiple deferrals within plan year as all deferrals are always done as of 6/30."

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"Notice 2023-43 Question 2 states: Before Rev. Proc. 2021-30 is updated pursuant to section 305(g) of the SECURE 2.0 Act, are there any Eligible Inadvertent Failures that a plan sponsor may not self-correct? The answer says: A-2. Yes. Before Rev. Proc. 2021-30 is updated pursuant to section 305(g) of the SECURE 2.0 Act, a plan sponsor may not self-correct the following Eligible Inadvertent Failures: [5] A demographic failure that is corrected using a method other than a method set forth in Treas. Reg. Section 1.401(a)(4)-11(g) ... The notice also says Eligible Inadvertent Failures may be corrected within 18 months of identifying the failure more or less. Treas. Reg. Section 1.401(a)(4)-11(g)(3)(i) says that a corrective amendment is not taken into account prior to its adoption under this paragraph (g) unless it satisfies each of the requirements of paragraph (g)(3)(ii) through (vii) of this section, whichever are applicable. Treas. Reg. Section 1.401(a)(4)-11(g)(3)(iv) says any corrective amendment intended to apply to the preceding plan year must be adopted and implemented on or before the 15th day of the 10th month after the close of the plan year in order to be taken into account for the preceding plan year. ---My question is this. Assume there is a legitimate demographic failure that was not corrected by October 15th and no plan provisions prevent this from being anything but a demographic failure. Would the employer still be able to self-correct under Notice 2023-43 within 18 months of discovery (without a VCP filing) even though the notice says one must correct using an 11(g) method which itself states such amendments must be made by Oct 15th in the year following the failure. Would the 'whichever are applicable' language allow for the Notice 2023-43 reasonableness language to prevail?"

"We have a sole prop client who contributed $20,500 into the plan throughout 2022. At the end of 2022, she was advised to elect S Corp status for 2022. I was told by her CPA firm that she will have no Sch C as the entire 2022 year is being reported under a tax filing for the S corp. (The conversion to S was solely to reduce her Sch C Medicare comp from $1,000,000+ to $200,000 in wages.) There was no 401(k) deferral deduction on her W-2. It seems to me we have no choice but to count her deferral in testing for 2022 -- the money is in the plan. But since she has no Sch C I'm not sure she can take a tax deduction on her 1040. But that is not my problem I suppose. I wonder it the IRS would take the position the deferrals are all excess because she did not have deferrals on her W-2 and had no sole prop compensation to support the deferrals. Comments?"

"We have a benefit plan out in New Jersey where the manager on the plan reached out to Nationwide for an asset certification so that an ERISA Section 103(a)(3)(C) audit could be completed for 2022; they have always received a certification from Nationwide in the past, but one was not included in the package they received this year. They received a response from Nationwide that 'after consultation with our auditors, we are no longer issuing certifications on assets held with Nationwide'. I have a Nationwide client that I have already received the certification letter from for 2022. Has anybody heard anything about Nationwide not certifying their reports anymore? All of a sudden there could be folks out there that need a non-ERISA Section 103(a)(3)(C) audit….."

"We offer plans the ability to have our participant loan fees (both initial set up and annual maintenance) paid directly from the accounts on the recordkeeping platform, or some plan sponsors offer to pay the fees themselves (usually when there are few loans, or it's a tight-knit group). And then sometimes this kind of thing happens, where the plan sponsor was paying the fees.... and then at some point they decided that was stupid and started having the participants reimburse the employer for those loan fees on an annual basis once they got our invoice (it's itemized enough to show the fees for the loan charges, so it's not hard to figure out who the loan charges are for, especially for a small plan). Of course, they don't tell us they are doing this until it is mentioned accidentally in a conversation and my distribution team person has her eyes pop out of her head. She offers to change the plan so that the fees come from the accounts, and is told that, it's OK, this works for us. So.... does it, really? The loan policy DOES include our loan fee in the amount that is being charged to participants (both at setup and annually), so maybe it does.... though it does say that fees are deducted from the accounts from which the loan is taken, which is not correct, so we'd have to modify that. But it's not on their 404a5 fee disclosure from the recordkeeper -- only the recordkeeper's loan fees are shown. And I don't think they'll let us add our fees there unless we are charging them from the plan accounts. So my overall gut feeling is that this is danger zone territory. Or, does the fact that this is handled 'outside the plan' make this a moot point? That feels wrong just typing that, but I think that's their rationale."