"Our company is being acquired and the acquiring company has informed us that they wish to terminate our existing 401k plan. Our plan is a Safe Harbor plan (100% match on first 3%. 50% on the next 2%) that incorporates a year end true-up. The acquiring company wants to move fast and wishes to terminate the plan ASAP. I have limited experience with 401k plan closures, so I have a few questions: [1] If for instance, the plan was set to terminate on March 15th and we have a pay date on March 15th, the regular 401k deferrals and matching contributions would not be deposited into the 401k plan until March 18/19, after the plan termination date. Does this present a problem? [2] Our plan also has a true-up provision, I'm not exactly sure how soon we would be able to calculate and deposit the 2024 true-up contribution, but it would be weeks, maybe months after the plan termination date ... is this OK? [3] IRS determination letters. I know this is optional, but curious to know if most plans seek the determination letter when closing a plan. For those that wait for the determination letter, how long does that typically take? Any other thoughts or things that I should be concerned about with the closing of the 401k plan?"

"Plan sponsor currently wants to have a service requirement for match of 250 hours in 12 months. If employee works more than 250 hours, but less than a 1,000 hours during the eligibility period, can we still disaggregate because they didn't complete 1,000 hours of service?"

"We were recently made aware of a late contribution issue with one of our clients when the company was purchased and the new owner started submitting their 401(k) deposits. Due to a payroll software issue, deferral and loan payments have been consistently submitted 2 weeks late since 2006. This is a small plan and the deposits have not met the 7-business day safe harbor. After interviewing the sponsor, we have determined it would be very difficult to make the argument that deposits were made as soon as administratively feasible. With a little extra work, the new owner is using the same payroll system and is now submitting deposits timely. No late contributions have been reported on the plan's 5500s, nor has the sponsor filed 5330s. The new owner wants to correct the late deposit issue and we are trying to provide some guidance/assistance. Obviously, this situation is a candidate for VFCP, but neither we nor the plan sponsor have data prior to 2014. The sponsor may be able to produce individual payroll data for the last couple of years, but we would need to propose some simplifying assumptions given individual payroll data is not available for more than a few years. This would seem reasonable given that deposits have consistently been 2 weeks late for the entire period. The IRS has been open to less than full corrections where data was unavailable in VCP filings we've done. We haven't had to do any VFCPs where a full correction was not possible. We are wondering if the DOL is open to less than full corrections and some simplifying assumptions with VFCP filings. Given these facts, we have a couple of questions for the group:

1. Has anyone used the VFCP when a full correction is not possible because the data no longer exist?
2. Since we don't have individual payroll information for all years, is the DOL open to using annual deposit information and assumed annual interest rates for calculating interest due on the late deposits?
3. Other insights?"

"Non-profit employer 'A' sponsors a 403(b) plan. Employer 'B' is a disregarded entity, but signed on as a participating employer to 'A's' plan, on the advice of counsel, just to make things clear. Now employer 'B' is breaking off from Employer 'A' and is going to change to a for-profit entity as of the separation date. 'B' is going to, probably, install a 401(k) plan, although probably not with us as the investment person is hyped on bundled arrangements.... It seems to me that this would be considered a termination of employment for these participants, and they would be eligible for distribution or rollover as they choose. Is my thinking on this flawed?"

"A Safe Harbor Match plan currently has no allocation conditions for Profit Sharing and the formula for Profit Sharing is defined as pro rata. Can the plan change the formula to New Comparability -- One Group per Participant mid-year? No profit sharing has been funded to the plan yet in 2024 and the plan document defines the period for determining the amount of an allocation of Non-Elective Contributions as End of Plan Year."