"Looking for some guidance....In 2023, the IRS added Part VIII 'IRS Compliance Questions' to Form 5500-SF. We are filing a late 2021 Form 5500-SF using the DFVC program. Since we have to file this on the 2024 Form 5500-SF, do we need to complete these questions that didn't apply to the Form 5500-SF in 2021?"

[Sponsored]

Reduced-PII technology enables secure decedent verification while minimizing risk. The Berwyn Group’s CertiDeath Paragon revolutionizes death audits by reducing the transfer of sensitive PII, like SSNs. Register now for the webinar to learn more!

"A participant's safe harbor match for 2024 should be $3,000. Payroll company deposited $4,800. The account had positive earnings for 2024 [1] I assume we calculate attributable earnings on the excess deposit and move $1800 plus earnings to the cash account. Is this correct? [2] What are the options to use the $1,800? Can it be used to fund 2025 safe harbor match deposits? Should it be allocated as a discretionary match for 2024? Could it be used to pay our fees? [3] I feel like the attributable earnings shouldn't be used to fund a contribution. Can it be used to pay our fees?"

"In 2025, the 415 limits are $70,000. Here is the scenario: The employee has a profit-sharing plan because of an agreement that can not produce refunds. The employee also has a 401k plan with employee deferrals only. Weekly payroll on the deferrals where the monies go in within 3-5 days after the pay date, is consistent and timely. 

"The 2025 year ends and we realize that some 401k participants are over their 415 limits. Let's also assume that over the age of 50 and between 60-63 the catch-up and super catch-up contributions were backed off to the 415 limits. We now have a scenario where refunds have to occur. 

"In the first scenario, a total of $9,000 has to be refunded. This $9,000 came in over 9 weeks ($1,000 per week) and applied to payroll periods in November and December. The $9,000 has to be refunded (This is a given) 

"Now, the $9 million question: What about earnings on the $9,000 over 9 weeks, plus lead time to perform the calculations and set up the refunds? It is nearly impossible to capture 10 investments in different asset classes from the day the monies were invested, plus earnings to the day it was refunded. 

"How does a TPA or Plan Administrator/Trustee calculate the earnings on the refunds? One can use this calculator and refund the monies by March 1st of the following year as the pooled investments are held in individual accounts from a major recordkeeper, etc. 

"Do we use the online VFCP calculator to determine refunds on earnings? I see no guidance if we had market losses, like in 2022 (unless you were all in guaranteed investment contracts). 

"I doubt a TPA has sophisticated earnings software, and they probably perform this manually. Again, only for 415 limits here. The ADP test is a separate issue that one can monitor and know upfront based on the census of this plan."

"There is an agreement subject to 409A that provides that a bonus is earned upon a sale of the company. However, it does not provide when or how that bonus is to be paid, is there anyway to correct under 409A? There is going to be a sale of the company, but the plan provisions don't state when payment is to be made (i.e. lump sum, installments....)."

"Plan excludes commissions from the definition of compensation for all sources -- deferral, safe harbor match (deposited per payroll with no true up in the AA), and profit sharing. For the first several years of the plan, the owner and child have had 50%+ of their total compensation paid as commissions, so 414s would always pass as most NHCEs have commissions of 10%-20% of total comp. 

"Until now; in 2024, child is not paid at all, and owner restructured so that all his compensation was regular wages. Sure, I can point to the caveat in my letter each year that this is a terrible idea and only is valid due to the large percentage of commissions that owner & child take, and let us know if that changes.... but now that it fails, what actually happens? 

"There's no PS for 2024, so that's fine. There's no ADP test, so is there no effect on the deferrals? Plan sponsor insists that all participants understand that there will be no deferrals on commissions. 

"For the SHM, I presume that I have to calculate it on an annual basis including all compensation. But here's the thing: that might end up lowering the deferral percentage and therefore the match (example: deferring $2,500 on $50,000 elig comp yields 5% and you get the maximum match; now if we compare $2,500 to $83,000 total comp, that's 3% and you get a lower SHM). What's the right way to proceed with this?"

"President Trump's order Designating English as the Official Language of The United States revokes President Clinton's order Improving Access to Services for Persons With Limited English Proficiency. Here's the revoked order. Although the order is directed to Federal government agency heads, might this affect anything an employee-benefit plan's administrator must do (or not do)?"