"We have a nonqualified deferred compensation plan for our HCEs. I’m a bit confused as to how we determine eligibility as I feel that it somewhat conflicts with eligibility for our regular 401(k) plan that HCEs are not eligible for. Our qualified 401(k) plan excludes HCEs based on the IRS’ definition of an HCE (not a 5% owner and did not earn greater than 150k in 2023 (for the 2024 plan year)). Our adoption agreement clearly states that HCEs are excluded from the plan.

"My question: How does this work for new VPs or executives that we hire in 2024? Are they eligible for the regular 401(k) plan since they do not meet the HCE definition yet? Or are they eligible for the nonqualified plan? The eligibility for the nonqual plan is for ‘a select group of management or HCE as defined by the employer.’ Our 401(k) administrator is telling me that these new hire VPs and execs should be eligible for the regular 401(k) and should be given the opportunity to elect since they do not yet meet the definition of an HCE. I do agree with this statement since the only employees excluded from the regular 401(k) plan are HCEs in our plan document. We did not elect the top paid group election for our non discrimination testing either.

"So where I’m confused is that our administrator for the nonqualified plan on the other hand is telling me that new hires who come in and are in the top 20% of employees current compensation would be eligible for the nonqual plan. But he also says that eligibility is ultimately determined by the company. I understand that these VPs may be eligible in their first year, but may no longer be the following year if we are basing it off of their income in the previous year or ownership and they are determined to be an HCE.

"I don’t want to be out of compliance in regards to our regular 401(k) and want to make sure we are offering the plan to non-excluded team members even if they are VPs and above. So based on the info I provided, would they be eligible for the traditional 401(k) plan (until it is determined they are an HCE) or the non-qual plan? I’m getting two different responses, from both administrators."

"Guy works April to November every year. Turned 73 this year. Since he is not employed on 12/31 does he have to take an RMD? Do service spanning rules apply here?"

"In 2023 the DOL revised the methodology for counting participants for the small plan audit waiver so that only account balances must be counted. Does anyone know if there has been guidance as to whether that new 'small plan' definition would extend to the safe harbor for remitting elective deferrals?"

"I've got a pre-enactment MEP (established years ago). New Company G started up in 2024, wants to join the MEP effective 1/1/25. They have 15 employees. It seems like we get to use the 3-year grace period here for G and they don't have to start automatic enrollment until sometime in 2027 (or 1/1/28?). Am I interpreting this correctly? Or at least reasonably?"

"Has anyone here explored outsourcing 401(k) administration work or considered setting up a back-office team to handle the workload? I’d love to hear about your experiences, challenges, or any best practices you've come across. For those still exploring options or facing hurdles, I’d be happy to exchange ideas and discuss potential solutions."

"I've got a plan that is currently using the 3% safe harbor NEC, and they want to add a small match as well. This is a plan that historically gives bad data late, so I'm trying to think of ways to deal with the 3/15 ACP deadline. I was thinking that if I added it with prior year testing, then all I really need to do is get HCE data by Feb or so and then I can do the ACP test by 3/15 and deal with the rest of the census data as we get it. I don't do a lot of prior year testing, so I'm not sure if that would work. If it's added for 2025, what NHCE ACP rate do I use for the 2025 testing?"

"A 401k plan allows for voluntary employee contributions (i.e. after-tax) and the plan matches voluntary employee contributions. Are there any regulations that would stop an employee from making voluntary employee contributions, receiving the match, then taking a withdrawal of the voluntary employee contributions the next day? Essentially a strategy of obtaining the match then getting their contribution back immediately. I understand the document would have to allow it and ACP testing needs to be passed, but is there a regulation that say's this cannot be done?"