"A CPA that I work with asked me this question.... He picked up a personal tax client who is a participant in government 457b plan. The person is an attorney who also owns 50% of a law practice. He is maxing his 457b deferrals ($30,500 in 2025). The law practice has a 25% Keogh (I didn't realize anyone still had a plan called a 'Keogh plan'). Is there any interplay between the contributions that has to be considered? From what I can see, no; in fact, he could get a max employer allocation under the 457b plan (if allowable by the plan document), and then get his 25% under the Keogh. Can I get a confirmation or a correction?"

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"What is the ERISA penalty on a failure to furnish requested documents? Still $110 a day? Or inflation-adjusted again?"

"By now, many retirement-services people have learned that an applicability date of an executive agency's rule that interprets Congress's statute does not control when the statute applies. About the recently published catch-up rule, many articles explain that one follows the final rule by 2027, and for 2026 may defend a good-faith interpretation of the statute. Considering the opportunities and flexibilities the final rule allows, why not follow it for 2026 too? To do something beyond what the final rule allows, the employer and the plan administrator would need to think about what that something is and be ready to defend how one formed a prudent finding that it is a reasoned interpretation of the statute. Even if an interpretation need not be formed with an ERISA fiduciary's prudence, a good-faith interpretation must be formed with at least the ordinary prudence that would be used by a business-prudent employer that is conscientiously seeking to follow tax law. Such an effort might be more expensive than simply following the final rule. And for a TPA, recordkeeper, or other service provider to maintain a pretense that it did not provide tax or other legal advice, might it be simpler to follow the final rule? Yet: BenefitsLink neighbors, if time, effort, and money were no constraint, is there anything you'd want to allow in 2026 that the 2027-applicable interpretation doesn't allow?"

"One of the requirements for using the net unrealized appreciation (NUA) strategy is that the plan participant take a lump sum distribution. If a participant takes an LSD and does NUA at age 59 1/2 without separating from service, it's never been clear to me whether they can continue in the plan for years after the year the LSD is paid. Any thoughts? If the answer is no, any references where the IRS or a court has said this?"

"I am working with a company that has defined compensation as W-2 wages with "sign on bonuses" as the only exclusion in their plan documents. In practice, the company has W-2 earnings from several sources that are not being considered for 401k deferrals & match:

• GTL imputed income (all employee have this)
• domestic partner imputed income
• moving reimbursements (reported on W-2)
• equity related W-2 income
• imputed income from taxable fringe benefits
• vehicle allowances

Looks like whoever set-up the 401k failed to list several items that should be excluded. The plan has been small enough in headcount historically to not require an audit, however, for 2025 this will be considered a large plan and will require an audit for the first time. Curious to know if anyone has experienced this before and what's the best method for correction. The obvious first step is to update the plan design to exclude the items above, but wondering if the company is going to have to calculate missed earnings for each employee on each paycheck (along with other items) to make a voluntary correction. I am envisioning a long painful process just to determine what was supposed to be deferred for every employee. FYI, the 401k is with Fidelity. Any advice is appreciated."