"Most of the pre-approved documents I've seen contain a provision that 'Reclassified employees' are excluded for employer contributions (but not for deferrals unless it is a Church) UNLESS the employer elects, either in the AA or in an Appendix, to INCLUDE one or more categories of 'Reclassified employees.' My assumption is that such employees are excluded, but not EXCLUDABLE for coverage testing, etc. Agree/disagree? I have some vague memory that these provisions were instituted due to Microsoft or similar situations, where employees who were treated as independent contractors subsequently were determined to be common law employees."

"Has anyone heard of the IRS's new 'Retirement Plan Burden Survey' sent to randomly selected Plan Sponsors? "

"Company has to give people 'retro pay' going back to 2022. Do they need to take deferrals from those? Do they need to include that income for the 2022 and/or 2023 ER contributions? It's a 403(b) Plan, and the document excludes all post-severance compensation. But it this post severance pay? It should have been paid way back when. It's not like a trailing commission or a bonus that was genuinely paid post-severance."

"I have a client who offers an enhanced SH Match ($1 for $1 on the first 4%). They then stack a discretionary match on top of that ($1 for $1 on the next 2%). It almost works like a two-tiered match, but it's the same $1 for $1 formula. Ascensus is now telling them they can't do that. Ascensus is saying that the discretionary match must be made on the first 2% of deferrals, meaning if someone defers 1%, they get the 1% SH match and 1% discretionary match.

"Here's what we've been told: The 4 and the 2 are not added together. If an employee defers 4%, they get the full 4% Safe Harbor Match and the 2% Employer Match. If an employee defers 1%, they get 1% Safe Harbor Match and 1% Employer Match. If an employee contributes 6% they get the 4% Safe Harbor Match and the 2% Employer Match. If they defer 7% or above, they get the 4% Safe Harbor Match and the 2% Employer Match.

"Is that right? The plan sponsor is not allowed to choose to match percents 5 and 6 only on a discretionary basis?"

"Suppose you have no common law employees and 3 unequal partners, and the theoretical 'cost' for each of the partners is $50,000, $75,000, and $150,000. I'm not a DB person, but I seem to remember from a VERY distant past that the 'default' is that the total cost is allocated to each partner in proportion the her/his partnership interest, but that this can be modified if there is a special allocation formula in the partnership agreement that provides a different result. Is that still true (if indeed it was ever true)? And if true, can it be modified each year as necessary due to changing demographics?"

"Immediate Eligibility -- plan excludes seasonal employees In the 'good ole' days, employer only had to worry about enrolling these employees if they worked 1,000 hours now they have to contend with the 500 rule. The problem is seasonal employees leave and come back on a regular basis Hired 5/1/2023 [1] Need to look at hours worked from 5/1/2023 -- 4/30/2024. Participant worked a total of 650 hours. However he left and came back twice during this period [2] Plan switches to plan year -- The plan then measures hours from 1/1/2024 to 12/31/2024 -- assume during this period he works 650 hours. Participant would be eligible to enter 1/1/2025. Am I looking at this correctly? The fact the employee left and came back during the initial 12 month period, does his hours pre termination count towards the 500,or does the counting start all over? I thought I read LTPTE rules do not include the break-in service rules or concept."

"One year in practice ERISA attorney here, so please, go easy on me. FACTS In the financial services industry, three individuals, A, B and C each maintain their own entity in which the individual has 100% ownership.

• A's LLC - maintains no plans.
• B'S LLC - maintains a SIMPLE 401K in which only B participates
• C's Corp. - maintains a SEP in which C and spouse participate.

Each entity has a 33% interest in the Main LLC. A, B, and C, through their entities, provide financial advice to clients of the Main LLC. Main LLC then pays A, B and C's entities 1099 income. Main LLC has five employees, none of which are A, B or C or their spouses. The employees of Main LLC have never been given the opportunity to participate in either the SIMPLE or the SEP. CONCLUSIONS I've concluded that under the ASG rules, Main LLC is a FSO and A, B & C entity's are A-Orgs. Thus, Main LLC and A, B & C's entities are an affiliated service group. Client is the Main LLC, and its goal is to provide a retainment plan for the Main LLC and its employees. Potentially later adding in a health plan. My conclusion is that B LLC's SIMPLE 401(K) AND C Corp's SEP have both made significant errors and must make a VCP submission. However, how can they correct with the improperly excluded employees? ERRORS SIMPLE 401(k)

1. Maintained during the same year as another retirement plan. Contributions must stop immediately.
2. Main LLC employees improperly excluded. Make corrective contributions to employees.

SEP

1. Main LLC employees improperly excluded. Make corrective contributions.

How can both Plans be corrected? Do you undo the SIMPLE contributions/correct deferral deductions then terminate the Plan? "