"If a 401k ERISA plan is drafted to have a 12 month elapsed time eligibility for matching contributions for full time employees and a One Year of Service under the hours method for match for part time employees, does this invoke 410(b) coverage testing?"

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"401(k) safe harbor match plan excludes bonuses, so 414(s) compensation ratio test is run. Plan excludes pre-entry compensation. Test was run with pre-entry compensation excluded from only the numerator, not the denominator. Adding back the pre-entry comp to the numerator 'fixes' the failed comp ratio test, but not adding back the bonuses. My understanding was that the period of compensation should be the same for the numerator and the denominator when calculating the ratios, meaning, pre-entry compensation was excluded from both. My asppa materials below seems to agree with that, but I can't find any code or regulation to cite. What are your thoughts? I feel that doing a retroactive amendment to 'Add back' pre-entry compensation would be [1] not a valid corrective amendment since you're not correcting a true failure, you're correcting, I believe, the perceived failed testing, but actually just using incorrect testing methodology. And [2] not a valid discretionary amendment since we're talking the prior year and this would increase match benefits as well, presumably."

"We are a small employer with a SIMPLE IRA plan. Due to a payroll data entry error on our end, the wrong employee elective deferral amount was entered in our payroll system for one employee over 3 pay periods within the same quarter. The excess is well under the annual IRS contribution limit. We contacted our CPA who also serves as our SIMPLE IRA custodian. They reached out to their back-end clearing firm who is saying the funds cannot be removed and there is no corrective process available through their platform. Our CPA advised against an early withdrawal with the employer absorbing the 10% penalty.

"The current proposed solution is issuing the employee a reimbursement check for the full amount, with the equivalent amount remaining in the SIMPLE IRA. The CPA is treating this essentially as a loan -- the employee receives the check now and the equivalent amount is recouped via their ongoing $79 biweekly paycheck deduction going forward, rather than that amount going to their SIMPLE IRA contributions. My questions: Is there an IRS correction process (EPCRS/SCP) that applies specifically to excess employee elective deferrals caused by employer data entry error? Is [the clearing firm's] position that funds cannot be removed accurate? Is the reimbursement check/loan structure compliant and is there a cleaner solution?"

"Participant was hired on 6/30/25. Company pays bi-weekly and the first payroll in the system was 7/18/25 and for just 80 hours. As of the end of the year, this employee only showed with 960 hours in the system because the final payroll that included 12/22/25 -- 12/31/25 was issued on 1/2/26 and applied itself to the 2026 hours. Client is requesting to move the 80 hours from the 1/2/26 payroll and apply them to 2025. Is there any rule that dictates if the hours are required to be applied in one year versus the other? While I think the hours should count for 2025 since that is when they were worked, my biggest issue with this is that the compensation earned on the 1/2/26 check counts toward 2026 and I feel like that should line up -- But based on hire date and working full-time, I also feel this employee should get the vesting credit as does the client. My only other thought is asking them what happened for the 7/4/25 payroll and why the EE didn't get 40 hours for the half-week they 'worked'. Thoughts?"