"Background info:

• Medical practice with 401k, Trustee is the doctor. 73% of the Plan assets belong to the owner (Dr), his wife, and his daughter, and the other 27% belongs to 9 NHCE participants.
• 56% of assets are in a pooled account (Schwab) + 44% is in private stock (this valuation is part of my question though, so the 44% may not be accurate). All requirements are being met concerning the 5500/Sch I/audit requirement.
• This 401k Plan purchased the private stock for $2/share in 2019. The company prepared IRS Forms 5498(?) in 2022 stating its value as $17.57/share. There is going to be a valuation done this fall (b/c of a capital-raise) and most likely a sale of the company next year. So in this plan, the stock asset showed a large gain in 2022, to reflect the value of $17.57/share.
• The doctor is now very worried the value will drop to $0, and wants to report its value on 12/31/25 as being back at the purchase price of $2/sh.
• One of the 9 NHCE participants was paid out during 2024, and her vested balance was determined using the Schwab account + private stock at $17.57/share. She was paid out of the Schwab acct to avoid having to transfer shares of the private stock in-kind (would be very impractical).

"Questions: (1) Can we make future plan distributions by paying out their share of the Schwab account, but hold back their portion of the private stock to be paid once it liquidates? They'd get the 2nd payout as soon as that occurs. (2) Should we reflect the asset's value back down at the $2/share? Or is the more accurate value the $17.57/share as reported by the company to its other share-holders? There is no way to really know how much it's worth until it does actually sell."

"Have a safe harbor 401(k) Plan. Deferral and match only. The plan fails 410b. If we run 401a4 test by allocation rate, it fails. Can we run it using benefit accrual rates to get it to pass? and not have to meet any minimum gateway requirements?"

"We have some layoffs happening at the end of the month, which employees have already been made aware of. If benefits also end on the last day of the month, are we able to provide the COBRA notices early (now for example) and will they be able to elect COBRA prior to their termination date on 6/30? Or is there a law that states they cannot elect COBRA until the qualifying event occurs (6/30 term date)?"