"Partner who is Active and not eligible to take an in-service went ahead and rolled over his account to an IRA without informing Plan Administrator. No 1099-R ever issued. (Reason was to get more control over his assets.) Looks like under Self Correction it needs to be returned to the plan with earnings. Questions: Does a 1099-R need to be issued at all for either transaction? The first one was in prior year. Can a 'Rollover IRA' that holds only this account be re-stated as a Plan account?"

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"Anyone know of a brokerage account solution, no advisor attached, for these types of plans? I need a solution where we can have it registered to the trustee of a rabbi trust. In my experience advisors do not like working on these because the opportunity for accumulation is pretty low. So I'm looking for a Fidelity/Charles Schwab type retail account where we can just fill out an application and open the account, no advisor comp. Anyone know of a solution?"

"Working with a 401k plan that had mistakenly defined 401k compensation as W-2 wages with no exclusions. This of course, resulted in several defects -- not enough was withheld from employee earnings because of the improper definition of compensation. (Payroll team was only withholding from regular wages, OT and bonuses). The plan was amended effective 12/1/25 to exclude several earnings types, including equity income, from compensation. Additionally, the payroll team would not regularly record W-2 stock transactions as they happened throughout the year. Many were held until the last payroll and reported in December, even though the transaction occurred in July/August. As I am going through the process of self-correction, I am left with a couple of questions on how to handle some transactions:

1. If an active employee exercised stock in July of 2025, but it was not reported in payroll until December of 2025 (when the plan was amended to exclude stock comp), would that stock transaction be considered compensation for the 401k plan? The option was exercised when it would have been considered compensation, but not reported in payroll until later when the transaction would be excluded?
2. For a terminated employee, similar question. I believe if payment is made within 2.5 months of termination or by end of year (whichever is later), then the payment is to be considered compensation. However, do I use the exercise date or the date in which the payment was made in payroll?"

"When is the following rehired employee eligible? John was hired in 2019 and worked very part time generally speaking, never working 1000 hours.... until he did. The Plan at that time was a Profit Sharing Plan and it was frozen. John's service history is:

• 2019 370 hours
• 2020 111 hours
• 2021 393 hours
• 2022 1000 hours (age > 21)
• 2023 516 hours and Terminated 7/2023. Because the Plan is frozen John does not enter the Plan, is not a 'Participant' even though he completed 1000 hours and min age 21. No account balance, 0% vested.
• 2024 -0- hours [1st One-Year Break-in-service]
• 2025 Rehired Dec 2025, 71 hours

TO NOTE: The frozen PSPlan was Amended and Restated effective 1/2024 into a Safe Harbor 401k PSPlan, eligibility is 12 mos / 1000 hours, min age 21. [LTPT eligibility is based on the standard provisions.] The A&R Plan document provides the new eligibility provisions apply if an Employee is not yet a 'Participant' as of the effective date of the change. Further it defines 'Participant' as an Employee having satisfied eligibility AND entered the Plan.

• [X] This amendment or restatement (or a prior amendment or restatement) modified the eligibility and/or entry date requirements and the prior eligibility and/or entry date conditions continue to apply to the Eligible Employees specified below. If this option is NOT selected, then all Eligible Employees must satisfy the eligibility and entry date conditions set forth above.
• 1. [X] The modified eligibility and entry date conditions above only apply to Eligible Employees who were not Participants as of the effective date of the modification.

QUESTION: is John eligible and his Entry Date is as of Rehire in December 2025 or must he wait until he completes 1 year/1000 hours (or LTPT elig reqs) and enter per Plan Entry Dates?"