"Can W-2 Compensation ever include Section 125 pre tax medical/cafeteria contributions? If I understand correctly, Sec125 Comp is exempt from Fed/FICA taxes so is not reported at all in Box 1, 3, [5] However, a plan doc I'm looking at says in the definition of Total Comp that Total Comp = W-2 Comp, which includes elective deferrals and Sec 125 pretax contributions."

"Can a Hard Frozen DB Plan, (that is owner only), take into account salaries that were taken during the current frozen years. Not to increase the benefits of course, as the plan is hard frozen. Rather, to increase the salary average. The owner is past retirement age and is receiving each year an actuarial increase on his A/B, since he is not taking benefits yet (although plan allows for in service distributions after NRA). However, the AB cannot be increased beyond 100% of average compensation. Therefore, if the salary average is allowed to be increased based on current salaries (even though plan is frozen), then the annual increase on the AB can keep going up until the new higher salary average."

"Client turned 73 in 2025, so RMD is due 4/1/2026. Already 100% vested. 

"Q Part 1 12/31/2025 AB is 1,000/month and AE at 4/1/2026 is 1,090/month (making up the numbers) Starting 4/1/2026, monthly would get 1,090/month till 12/31/2026 (9 payments). Now they want to take the full amount on 4/1/2026 i.e. 9,810 (9*1090) Any problem with this?

"Q Part 2 Come 1/1/2027, the RMD continues to be 1,090/month till 4/1/2027 but does not take any monthly as he wants to take a lump sum. Say 12/31/2026 AB is now 2,200/month and next payment cycle is 4/1/2027 and the AE at 4/1/2027 is 1,300/month. So starting 4/1/2027, RMD is 1,300/month+1,090/month Clients says I want to take out all in one lump sum on 4/1/2027 i.e. 1,090*12 + 1,300*9 And future years continue with the same cycle. What am I calculating/thinking wrong?"

"IRS issued Notice CP1348 assessing penalties regarding a profit sharing plan due to distributions being made to terminated participants without federal tax withholding payments being submitted nor the Form 945 being filed. The Notice was addressed to the plan and stated that the plan's TIN should be written on the penalty payment. The employer paid the penalties, which were over $10,000, from the plan -- AI says this is a prohibited transaction -- do you agree? The plan has a pooled arrangement, so if the penalties are a valid plan expense, each participant would be dinged an average of about $300, which could become as issue."

"Our firm pretty much exclusively has done small / micro plans (90% of our plans are <1M in assets and under 30 participants). As we grow, I know large plans are likely something we'll have to deal with eventually. We have one plan that's getting close enough to the threshold for requiring a large plan audit that we know we need to start thinking about that in the next few years. With our plan demographic, we've never once actually had a large plan audit. What kind of things should we expect? Does the auditing firm just ask us for a bunch of reports, and if so, what kind of information is generally requested? In the case that anything out of place is found, how much leeway is there in terms of them talking to us about correcting it vs reporting failures on an audit? I'd hate for a large plan audit to be the way we find out we're operating something wrong & cause problems for a client. Any guidance as we start to move into plans that may require audits?"