"In prior year, ADP ACP Non-discrimination test and coverage test is taken in disaggregate method. I have taken both coverage and ADP ACP test disaggregate method. However, my ADP ACP is passes in disaggregate but coverage is failed in disaggregate. But the coverage is passes in aggregate method. As per my understanding, it is not permissible to change the method of ADP ACP testing from disaggregate to aggregate because the plan follows prior year Testing Method. Is it permissible to take coverage test in aggregate method to make the test pass. Is there any provision in IRC regarding this scenario?"

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"Employer employs four employees, none of who are catch-up eligible. Employer currently has a SIMPLE with the 3% match approach. No salary deferrals have been made in 2025.

• It’s our understanding that the increased deferral limit of $17,600 in the SIMPLE is automatically in place for 2025. Is that right?

If they terminate the SIMPLE as of 6/30/2025, then start a new SH 401(k) plan effective 7/1/2025, (distributing all required notices timely and communicating the pro-rata deferral limits in each plan ($8,727.67 / $11,846.58) specific to each participant), for the initial plan year:

• Is Compensation from 1-1-2025 to 6-30-2025 for purposes of calculating the 3% match in the SIMPLE, if any salary deferrals are made?
• Is Compensation from 7-1-2025 to 12-31-2025 for purposes of calculating the Employer contributions (Safe Harbor, Profit Sharing, Discretionary Match) in the 401(k) plan, or could the 401(k) plan be written to use full-year (1-1-2025 to 12-31-2025) compensation for allocation purposes for the first plan year?
• Can the new Safe Harbor plan use the Match approach, or does it have to use the Non-Elective approach?
• Is the SIMPLE match (if any) completely disregarded in the 401(a)(4) test in the 401(k) plan?

They will be well under the 25% deduction limit between Employer contributions made to both plans. Thanks in advance for your input on this."

"We have a client who failed ACP test. The one HCE is entitled to the match but then must receive the correction. Issue is the match has not yet been funded and the correction is to be made by March 15. This is his first year int he plan so he has no other match source funds. I should know this but I'm thinking the ADP correction is due March 15 but an ACP correction is not dye until the end of the following plan year. We know about the vesting rule - refund the vested portion only and forfeit the unvested amount."

"If an HCE participates in plan A and plan B which are in a controlled group and has Compensation of $200,000 in each plan and a 2% employer contribution, how much gets allocated to each plan account? I realize that for 2025 the 401(a)(17) compensation cap is $350,000 so it appears the maximum contribution should be $7000 across the 2 plans? Does one plan allocate $4000 and the other $3000?"

"Is there a violation of minimum participation rules here, or is there additional testing required with the following plan design? An ERISA 401k calendar year plan has 1 year of service/1000 hours for eligibility (anniversary year then switch to plan year) and a tiered year of service match formula with tier 1 drafted as follows 1- 7 years 25% match (8-14 years 50% etc), and Year of Service for the match formula defined as 1000 hours in the Plan Year (in practice credited at year end), are there any minimum service/participation concerns under ERISA? Example employee completes eligibility on June 26, 2024, with an entry date of June 28, but is not credited with 1000 hours of service in 2024 until 12/31 and then 1/1/26 receives the first match. Seems a plan design flaw but trying to determine exactly what the issue is?"

"How should HSA pre-tax deductions be handled if an employee is on an unpaid Leave Of Absence across two different tax years? For example the employee starts the LOA in 2024 and comes back in 2025. "

"Litigation involving a number of adult children and stepchildren of the owner of a single IRA account, who died in 2023, are now resolving their dispute by a settlement allocating a share of the IRA to each of them. The IRA owner had been taking RMDs but died without having taken her 2023 RMD, which still has not been distributed. My understanding is that the 2023 RMD could have been taken by any one of the beneficiaries in the year of the IRA owner's death. Is there any way the missed 2023 RMD can now be distributed to only one of the beneficiaries so that just one Form 5329 needs to be filed or must the 2023 RMD be allocated among all of the beneficiaries in proportion to their respective shares of the IRA to be received under the settlement and a Form 5329 be filed by each of them for a corresponding share of the 2023 RMD?"

"The plan sponsor had a small name change from 'Inc' to 'LLC' as of 1/1/2024. The ERISA plan document was not updated to reflect this during 2024, but will be updated at some point during 2025. Should the 2024 Form 5500 filing for the plan year ending 12/31/24 follow the plan document or the legal company name?"