"I am reviewing a profit sharing allocation and I have a question with regard to the four step SSI formula. This allocation is not enough to go beyond step [1] I feel it should just be pro-rata based on compensation, which is step 1 (3% of comp). But the person who performed the calculation gave the owner pro-rata x comp + excess comp. Ex: comp 345,000 x 2.48% = 8,548 (excess comp is 210,119 (168,600 x .80 = 134,880 next dollar, then 345,000-134,881 = 210,119), so 345,000 + 210,119 = 555,119 x 1.54% = 8,548) EEs: 27,000 x 1.54% = 415.80 etc I have an excerpt from the ERISA outline book but it only covers when you don't go past step 2 or 3, not [1] But the example they give with not going past step 3 is you do pro-rata based on the comp for that step (which is comp + excess comp). Step 1 is just comp."

"We have a retiree who worked for several years for us (a U.S. company) while living in the US. She is a Canadian citizen and was here on an H-1B visa. She has since returned to Canada and was receiving regular monthly installments from a 401(a) plan until her account was depleted in 2024. When we changed recordkeepers the new recordkeeper did not receive a W-8BEN from the prior recordkeeper so they withheld 20% in Federal taxes. Apparently this was an error and they should have withheld 15%. Now the participant is unhappy and wants the new recordkeeper to refund her the additional 5%. The new recordkeeper has declined to do so. We recommended that she get assistance from a Canadian tax advisor, but she reports that the fees would be higher than the amount she would recover. So we in HR are attempting to help her with the do-it-yourself route.

"She now has 1040-S forms for the open tax years (2021-2024). Is it as simple as filing a 1040-NR and requesting a refund? I assume the income is 'effectively connected with a US Trade or Business' because it was earned while she was a US resident employed by a US employer? Can it really be that simple?"

"Assume a plan calculates the employer match on a plan year basis, but the employer funds per-pay period with a year-end true-up. Could the plan be amended to provide that, if an employee hits the 401(a)(17) limit before the end of the year, the true-up amount for the employee will be funded at that time, rather than waiting until year-end? I'm wondering if the timing of the true-up is potentially a BRF issue, given that it would be virtually all HCEs who would get the contribution early (and get the opportunity for additional earnings)."

"We've never had a client enhance the basic safe harbor match beyond 100% of deferrals up to 4%. We now have a client who prefers to enhance the safe harbor match beyond that instead of adding a discretionary match. It seems that the rules say deferrals over 6% cannot be matched under any safe harbor match option (and get a pass on ACP). Is that right? I think they will want something like 100% up to 3% plus 50% on the next 3%. The maximum match likely could be 100% up to 6% as an option I believe. I understand the rules for enhanced are that it must be at least as generous as the basic safe harbor match and the rate cannot increase with an increase in deferrals if it's a tiered match."