"Taking over a plan where some participants have insurance policies. I asked about PS 58 costs and the sponsor told me they were not necessary because the employee pre-tax deferrals were covering the premiums (being sent directly to the insurance company instead of to the recordkeeper). I've never heard of that, but I know very little about insurance other than I don't want to deal with it. Anyone want to confirm or debunk this?"

"About a month ago our building was struck by lightning and we lost most of our computers. I had a very old machine still set up just to run Relius Proposal. Naturally that old lady is one that got killed. I really preferred the simplicity of set up for new plan proposals. I am aware it is no longer updated or supported but the tables were manually updated so it still worked for a limited purpose. I am just wondering if anybody has had any luck getting it to run on a newer machine. Or is it time to start hitting up yard sales for old parts?"

"We are running a projection for a plan with permitted disparity and trying to max out the owners. Is it possible to max out two owners if one maxes out before the other? One's deferrals are less than the other, so they can receive a larger profit sharing. HCE #1 $350,000 comp $23,500 Roth $21,000 6% SH Match -- if we give $25,500 PS -- this is 7.29% HCE #2 $350,000 comp $18,500 Roth $18,500 6% SH Match -- if we give $33,000 PS -- this is 9.43%

"I ran this through chat(k) and the response was below: By sizing profit-sharing so that HCE #1 reaches $70,000, you establish a uniform 7.2857% profit-sharing rate. Participant #2 therefore also receives $25,500 of profit-sharing, bringing his total contributions to $62,500. He cannot reach the $70,000 cap under the same allocation formula. Under a four-step permitted-disparity profit-sharing formula, both owners' allocations derive from one uniform banded schedule.

"Once we max out #1 at 7.29%, is that what HCE #2 must receive? There are also two NHCEs -- so this also affects what they get -- if we can give #2 up to $70,000, then I assume their% is based off the higher number."

"Entity B is 51% owned by Entity C and 49% by Entity A. Entity B exists only on paper at this point. It has no business operations or employees. It sponsors an underfunded DB plan, but entity A operates the plan and employees from A serve as the plan's fiduciary. Entity A and Entity C also have their own DB plans. Entity A and Entity C cannot/will not arrive at a deal for either of them to take 80%+ ownership of Entity B and enable them to merge the B plan into their own DB plan. Are there any mechanisms that would allow A or C to merge the B plan into its own plan without taking 80% ownership of the B entity? Could this be negotiated between A and C?"

"For a 7/1/24 -- 6/30/25 plan year, would participants that are age 60-63 at 12/31/25 be able to make the additional catch-up (if the plan wanted to allow)? Or is it effective for plan years starting after 12/31/24? If a plan fails 6/30/25 PYE ADP testing and someone age 61 has all C/U available, would 11,250 or 7,500 be reclassed for this PY? 402(g) limit is tied to the individual and calendar year. Everything I'm seeing about special catch-up references taxable year. But perhaps 401(a)(30) / plan's responsibility to monitor the limit changes effective date of this?"

"If tips are no longer subject to payroll taxes, should they go into a plan as Roth?"

"We might take over a 1 participant DB plan. The plan is in its ninth year. The plan has adequate assets to pay all benefit liabilities. Looks like it always has. The problem is that no AFTAP was ever done. So benefit accruals are frozen for years 6,7 and [8] If we get the current AFTAP timely signed, it is at 122%. If this is done, are all prior benefit accruals (from years 6,7 and 8 automatically restored?"

"Here's my not-entirely hypothetical: A partnership is the plan sponsor and only participating employer of an individual-account Section 401(a)-(k) retirement plan. The plan year is the calendar year. The partnership's tax year is the calendar year. Every partner is on the calendar year for one's tax year. The partnership has no mandatory retirement age, nor even a presumed ordinary retirement age. A working partner will reach age 73 during 2027 (and expects to continue working into her 80s).

" 'For purposes of section 401(a)(9), a 5-percent owner is an employee [including a deemed employee] who is a 5-percent owner (as defined in section 416) with respect to the plan year ending in the calendar year in which the employee attains the applicable age.' 26 C.F.R. Section 1.401(a)(9)-2(b)(3)(ii) (emphasis added).

"Does this mean the measurement date is December 31, 2026? Under the partnership agreement, a partner's capital interest can change any day. For example, a partner might get distributions from capital, or even might withdraw capital. A partner's profits interest, if measured as a percentage of the partnership's profit, can change because the partner's interest is measured by several factors, including (for a relevant year or other period) the partner's revenue generation to her practice, expenses specifically allocated to her practice, origination credits for having introduced a client to another partner's practice, and a proportionate share of the partnership's general overhead allocated to all practices.

"The plan's administrator wants to get the measurement date right so it neither fails to meet Section 401(a)(9) nor unnecessarily (and improperly) directs an involuntary distribution the plan does not provide. BenefitsLink neighbors, how's my guess?"