"A former client contacted me with questions re his 2026 RMD. Non-calendar yr PS plan with an annual val date of 6/30. So use the 6/30/25 account value less any distributions plus any contributions made between 7/1/25 and 12/31/25 to determine the 26 RMD. He took his 2025 RMD late in 25, as well as an additional distribution rolled to an IRA. So these distributions get subtracted from the account balance.

"His (huge, national) TPA firm calculated the RMD without this adjustment, despite the adjustment being defined in both the regs and in the RMD language of said (huge national) TPA firm's prototype DC plan document. When my client pointed this out to them, the response was 'we as a practice calculate the RMD without the adjustments for distributions and contributions after the valuation date. If you want to use your calculation with the adjustments it is not incorrect to do so.'

"So, 'as a practice', they don't follow the regs or the plan document? At least if there are only distributions to subtract worst case the RMD is overstated. But if they also ignore any contributions, they'd be understating the RMD, leaving the participant subject to a potential excise tax and the employer with an operational violation of the terms of the plan. Am I missing anything here?"

"I've got a client who asked if they could use the xt allocation in the plan to not allocate 'profit sharing' (I know, I know) to anyone who doesn't already have an account in the plan. They have several thousand employees and a lot of turnover (but they are required by donors to have a very generous eligibility provision), so trying to get accounts set up for small employer allocations that are then immediately withdrawn is a hassle -- they'd rather direct the contribution to more stable employees. Acknowledging that there is still a lot of work to do to firmly establish the parameters here.... how off-kilter is this idea? The AA does allow for classes of individual participants. And they don't necessarily want a match. They are OK with the allocation going to participants who terminated during the year who have previously opened an account (i.e., deferred). Let's say that I can pass 410b somehow -- maybe by not giving the HCEs any allocation (which would be best for gateway and the rest of 401a4 testing). Is there anything else that would prevent this kind of skullduggery?"