"I have 4 missing participants with the following balances: $95.76; $52.07; $14.90; $39.56. We use Penchecks to process our 1099-Rs and we also pull the distribution fee that we charge from the participant's distribution. After all distribution expenses are deducted each of these payouts will have a negative balance. Can I zero these accounts out with expenses? or do I need to open missing person IRAs and get the expenses somewhere else?"

[Sponsored]

ShowMe Pension Group is an independent TPA serving clients nationwide, with a focus on small to mid-size businesses. Our goal: foster an incredible work environment and provide exceptional customer service. We're looking for the right person to join us as a Pension Administrator.

"We have a participant who passed away in 2024. He has both Traditional and Roth balances in the 401(k) plan. In the past, he has been taking RMDs from the Roth source. For 2024, which balance would we use for RMD calculation (just the 12/31/2023 Traditional Balance or 12/31/2023 Total Balance -- that includes the Roth) and can the RMD for 2024 be distributed from the Roth source to the beneficiary? The reason I ask is because I know that for Roth IRAs, the RMDs are required after the person's death, but is that the case for deceased 401(k) participants with Roth balances? According to this link from the IRS, it seems like only the Roth IRAs have RMDs for deceased participants. In my opinion, only the participant's 12/31/2023 Traditional Balance would be considered for RMD calculations and the RMD must be taken from the Traditional source. Would you agree?"

"Our company was acquired earlier this year. New company has a 401k plan design that stops employees from contributing once they hit the $345,000 compensation limit (even if they are below the 23,000 contribution limit). While not common, I believe this is permissible. The new company defines Eligible Wages as 'base pay, annual bonus, sales bonuses, overtime and shift differentials and merit payments, as applicable.' Old company was acquired in March of this year and 401k deferrals continued through the close date in March. From March -- June, employees were paid on old payroll system and not eligible to contribute to either 401k plan. Starting in July, employees are being paid on new company payroll and are eligible for new company 401k. The problem -- several employees are not able to contribute to the new 401k because they are showing as hitting the $345,000 compensation limit? Not sure how or why earnings that occurred under the old 401k plan and earnings that weren't eligible for any 401k contribution at all, are being considered towards the compensation limit under the new 401k plan....I think this might be an error by the new company. The old 401k plan is being shut down (not merging or being acquired by the new company/plan), and will have its own independent testing and 5500. Under these circumstances, is it proper to have earnings from previous payroll be considered as compensation under the new 401k plan? Anyone experience something similar?"

"We currently offer SIMPLE IRA to employees. Offered to 5 employees in 2022, all [30] in 2023. However, only 3 took it -- most didn't even realize we have this plan. We are looking to terminate SIMPLE IRA and start safe harbor 401k with profit sharing. We will be offering to all employees. Would we be eligible to receive SECURE 2.0 Act tax credits? Can we say these plans are 'not substantially same' and hence claim tax credit?"

"Being new to the DC 401k industry, what educational material would you all recommend for me to read and or certifications? Any suggestions would be helpful. I'm going through the QKA material from ASPPA."

"Plan terminated 12/31/2023 with force out at $1,000 (i/o $5,000). No SECURE amendment was made to increase to $7,000. I was not an issue as the participant with 1.5k balance was eager to get the monies but now not returning the distribution paperwork. Can the plan be amended now to increase the force out to 5k so that this participant can get paid the lump sum?"

"I’ve been impressed with the guidance on this site, so I'm sharing my story. My wife signed a letter of intent for her job as a family medicine doctor a decade ago, which specifically stated the benefit of a retirement plan as part of her employment package. After ten years without receiving any retirement benefits, she was promised part ownership of her medical practice. We were ecstatic. We both signed agreements under the assurance that this was risk-free and would benefit us from the eventual sale of the practice. She was verbally promised frequent dividends to pay down her ownership loan. However, we later discovered that the medical practice was only profitable because it failed to repay federal COVID loans, and the company had actually been incurring debt. We have received no dividends. Now, my wife is part owner of a massive debt, nearly more than the equity of our home. If she leaves her job, we lose everything--our home, our two young children’s college funds. Staying has resulted in the realities of mismanagement: significant pay cuts, additional responsibilities, and denied earned paid time off to offset company debt. Her salary, along with another owner's, has been cut by 20%, while two new doctors, just out of residency, have been hired at double her salary. She is increasingly burdened with more tasks because she cannot resign under the threat of having to pay off the debt, while work conditions worsen. Between the empty promise of retirement benefits and the reduced salary, her ownership loan accrues interest without any of the promised dividends or reliable salary to pay it down. Our family is getting deeper and deeper in debt with absolutely nothing to show for it. It seems we have been conned into supporting something her boss owns, and possibly their lifestyle, from which we derive no tangible benefit. I cannot fathom that we owe $200K+ on something we cannot touch, experience, or benefit from. I was frugal in my early years, planning for our children’s college fund and early retirement as an engineer, but all of this fiscally responsible planning is being wiped out due to her current employer's mismanagement. What can we do? We fear bankruptcy and worse. Any guidance is greatly appreciated. Thank you! -Desperate in Denver"

"We are acquiring multiple companies. They each have their own H&W benefits. If the employees of the target companies don't join our health plan immediately (but stay on their own health plans), how long can that transition period last? How does that impact nondiscrimination testing? In other words, does the length of the transition period matter when it comes to how the testing is performed?"