"If a plan provides that an employee will become a participant eligible to receive employer contributions 'immediately' upon meeting the eligibility requirements, and the eligibility requirement is 2 eligibility computation periods in which he completes 1,000 hours of service, does the employee enter the plan on the last day of the second eligibility computation period, or the day after?

"In this situation the eligibility computation period is the 12-month period beginning on date of hire and then switches to plan year. Date of hire is 1/1/2022 and plan year is calendar year. So eligibility computation periods are 1/1/22-12/31/22 and 1/1/23-12/31/23. Does the employee become a participant on 12/31/23 or 1/1/24? I have generally interpreted similar terms to mean that the day has to be completed for the eligibility period to be completed, meaning the ECP ends at 11:59 on 12/31/23 and then the employee becomes a participant immediately at 12:00 am on 1/1/24. But the TPA's interpretation is the employee became a participant on 12/31/23.

"This is a money purchase plan, if that's relevant, and the issue is whether the participant should have received a contribution based on his compensation for the day of 12/31/23."

"Client has a plan that excludes the following from eligibility: highly compensated non-key employees, key employees making less than $100K and non-shareholders making more than $28,000. Everyone else is eligible and gets a 4% match. Is this discriminatory on its face? Seems like anyone in the middle wouldn't get the match."

"About a higher-wage participant's age-based catch-up, what is an effective opportunity to elect against Roth contributions? For Internal Revenue Code provisions about a higher-wage participant who must make age-based catch-up deferrals as Roth contribution (or get no such catch-up), a proposed rule lets a plan provide a deemed election for Roth contributions. Among other conditions, the plan must provide a Section 414(v)(7)-affected participant an 'effective opportunity' to make a different election. About what is or isn't an effective opportunity, the proposed rule points to 26 C.F.R. Section 1.401(k)-1(e)(2)(ii): 'Whether an employee has an effective opportunity is determined based on all the relevant facts and circumstances, including the adequacy of notice of the availability of the election, the period of time during which an election may be made, and any other conditions on elections.' For the audience we seek to reach (age 49 or older, 2025 FICA wages > $150,000) and the choice the election asks, what facts do you think makes an effective opportunity?

"For a small plan with not many Section 414(v)(7)-affected participants, one might give this notice with lots of 'touch' and without needing a heavily programmed plan-administration regime. But imagine a plan with at least a thousand Section 414(v)(7)-affected participants, who specified all deferrals as non-Roth contributions, and didn't respond before 2026 to 2025's communications imploring them to make revised deferral elections. When would you send such a participant a notice of the employer/administrator's intent to treat a non-Roth election as a Roth election (absent an election for no catch-up deferral)? In setting a time for a notice, must it relate to when within the year the particular participant would be switched from non-Roth to Roth? Or is a notice given in December 2025 good enough? Recognize that for some a needed switch from non-Roth to Roth might be as late as summer, and for some it might be as soon as January. What makes sense?"

"The new Federal income tax deductions are effective for income earned starting January 1, 2025. This may have an impact on how payroll reports tips and overtime pay when providing 2025 census data. Note that payroll does not yet have full guidance about the new rules.

"The new law is much more complicated that one would think. It creates a Federal deduction for tips that can be taken on a personal income tax form. It does not exclude tips from all payroll taxes. The exclusion is solely for Federal income taxes. Tips are subject to Social Security and Medicare taxes, and any applicable State and Local taxes. There is a cap of $25,000 on the amount of tips that are deductible, and this phases out as income rises above $150,000 (for single filer) and phases out if income reaches $400,000 (for single filer).

"Not all occupations qualify for the tips deduction. The IRS is required to publish a list of occupations eligible for the tips deduction by October 2, 2025. If you earn tips in an occupation that does not appear on the list (when it is published), you get no tips deduction. While you are looking at income taxes, also keep in mind that there is a new deduction up to $12,500 (for single filer) available on overtime pay."

"The FT William pre-approved document allows us to select whether the Investment Fiduciary will be if not the Trustee. Has anyone ever seen this used to name someone other than the Trustee (my plan does not have a directed trustee)? It looks like the default investment fiduciary is the plan sponsor. That doesn't seem normal though because the norm is for the trustee to sign off on investment changes for example."