"If a company matches employee contribution with company stock, do they have to register these stocks? I understand that company stock offered for sale in the plan needs to be registered, if I'm not mistaken, but I'm not sure if the matching contributions in company stock belong to this category. Also, are the rules different for public and private companies?"

"We have 401(k) plans that cover 4 businesses using participation agreements between the plans, using one of the plan documents as the master plan. There is common ownership among the companies, making it a controlled group. Plan provisions allow a discretionary profit sharing contribution. One of the companies has had a very profitable year, while the other 3 only so- so. Can the successful company make a profit sharing payment, while the other 3 do not? Also, Successful company's owner (100%) does not take any salary, so would not benefit from the profit sharing payment."

"We've been taking the conservative position (rightly or wrongly) that the jump to $7,000 only applies if the plan ALREADY has a $5,000 limit. A plan that has a $1,000 limit, we've been amending to $5,000, then operationally switching to $7,000. The FIS plan termination amendment, which of course isn't IRS approved language, does provide an option to jump directly from $1,000 to $7,000. But, this is a termination amendment, not an amendment for an ongoing plan. I believe in one of the webcasts quite a while ago, there was some musing that operationally jumping directly from $1,000 to $7,000 operationally, and catching up with the formal SECURE/2.0 amendments, would be acceptable, but that was REALLY unofficial -- just some general discussion. Anyone have any new thoughts on this subject?"

"I have a plan where the partners are saying they are not going to fund their own safe harbor but put in the 3% for all other employees. Is there something that allows them to NOT put the safe harbor in for themselves?"

"I have looked at pension plan payments to nonresident aliens before in the context of a survivor annuity payable under a joint and survivor annuity to a (surviving spouse) nonresident alien individual residing in the Cayman Islands. The deceased participant was a U.S. citizen who participated in a U.S. pension plan. My basic conclusions then were:

1. A foreign person nonresident alien is subject to U.S. income tax on U.S. source income.
2. The survivor annuity is U.S. source income (it was derived from a pension attributable to contributions made to and held in a U.S. trust for services performed by the participant in the U.S).
3. The survivor annuity is subject to Chapter 3 withholding at a 30% rate (no tax treaty, nonresident alien individual did not engage in a trade or business in the U.S., payments not exempt under 871(f) because survivor annuity is derived from a pension earned by a U.S. individual).
4. The pension plan is required to report the payments to the IRS and the nonresident alien individual on Form 1042-S and to file a tax return with the IRS on Form 1042.

The same basic facts apply in this instance, except that the (surviving spouse) nonresident alien individual is a resident of Kenya (no tax treaty). Thus, I think my prior basic conclusions would apply to monthly QPSA payments made to the nonresident alien individual. The wrinkle here is that the pension plan allows a surviving spouse eligible for a QPSA to elect a lump sum payment in lieu of monthly payments. This raises issues for which there are no apparent answers:

1. Is the lump sum payment an eligible rollover distribution for which the pension plan must offer the nonresident alien individual a direct rollover/direct payment election. The clearest guidance for a yes answer may be the 402(f) notice providing that "If you are a nonresident alien and you do not do a direct rollover to a U.S. IRA or U.S. employer plan, ... the plan is generally required to withhold 30% of the taxable amount...." No need for this statement if a nonresident alien individual is not required to be provided with a direct rollover/direct payment election.
2. If the nonresident alien individual elects a direct rollover to a traditional IRA, questions include (i) is the direct rollover subject to any withholding, (ii) is the direct rollover reported on Form 1099-R, and (iii) if reported on Form 1099-R, is the direct rollover also required to be reported Form 1042-S. Form 1042-S provides only for reporting of "gross income." It is not clear if 'gross income" is "taxable income." A concern here is what tax rules would apply to the IRA if the amount of the direct rollover is reported on Form 1042 as subject to 30% withholding. A factor here may be that the direct rollover is not taxable income (at least for U.S. residents) and the dollars remain in the U.S. in a U.S. IRA and presumably would be subject to withholding when paid by the IRA custodian to the nonresident alien individual.
3. If the nonresident alien individual elects a direct rollover to a Roth IRA, same type of questions. However, the direct rollover would generate taxable income. This argues for the application of 30% withholding and reporting on Form 1042-S.

I would appreciate any input you may have."

"Someone wants to change their SEP to a Simple IRA. Are there any issues with doing this and can they still contribute to the Simple IRA?"

"Has the IRS issued final guidance on putting in matching contributions as Roth as of yet? If it's a Safe Harbor Match, does that impact the ability to do it as a Roth?"

"Preapproved plan, you have to give the Opinion letter Serial #. Ours has the format Qxxxxxx with a small 'a' after the 6 digits. The 5500 instructions do not appear to require inclusion of the 'a' -- has anyone heard otherwise? I always assumed the 'a' meant 'approved' so maybe it is meaningless in the context of filing 5500's at this point?"

"I am doing some modelling trying to forecast the segment rates for 2024 EOY valuation. I am getting 4.75/4.96/5.59 for 430 and 5.03/5.27/5.23 for 404. Leaving the technicalities apart, thus my conclusion is that for 2024 the min and max are the same and are driven by 430 rates. This is totally insane, what am I missing?"

"I have a safe harbor 401k plan using the safe harbor basic match formula. This plan has a few related employers (subsidiaries) that are participating via Participation Agreements. It appears that a couple of these employers will be sold mid-year, via a stock sale/change in ownership rather than an asset sale. My understanding is that this will create safe harbor problems and the only way to maintain safe harbor status for the plan is for each entity to spin out into its own mirror safe harbor plan. If correct and assuming we do not want to create new plans, would an option be to terminate/suspend the safe harbor mid year and convert to ADP/ACP testing -- the plan is to continue the same match as a non-safe harbor match. The reasoning is that is will be easier to remove the participating employers. Based on our projected testing, the plan will pass ADP and ACP anyways. Any thoughts?"