"It has been a hot minute since I have been involved with compliance testing, but I am pretty sure I remember that there is a distinct order to the compliance tests. Lets assume we have a 401(k) plan with deferrals, match and after-tax contributions. There are participants who exceeded the 415 limit due to after-tax contributions. It has always been my understanding that the excess annual additions are corrected first and not included in the ADP/ACP Test.

"The issue here is that the service provider is stating that they do not need to do 415 excess corrections because those get refunded by application of the ACP Test, but in this case we are doing EPCRS corrections with a one-to-one QNEC and including the excess annual additions in that test inflate the QNEC. Just confirming I have not lost my testing marbles and if you have a reference that would be great (was there pre-2009)."

"I'll use an extreme example of my question to simplify the basic question. A company has a 401k plan that matches employee contributions 100% up to 4% of salary. Bonuses do NOT qualify for a company match. An employee has an annual salary of $360k, paid equally over 24 pay periods throughout the year, from which the employee contributes 5% from each check toward their 401k. The employee received a $360k bonus on January 5th, before they received their first 'normal' paycheck of the year. Is the employee eligible for a match because the bonus was excluded from the IRS limits? Or are they ineligible for a company match because they reached the IRS annual compensation limit prior to receiving a regular paycheck? Secondly, what code section, etc contains the answer to this question?"

"If I recall, an amount distributed from an In-Plan Roth account (that was converted within the plan from a pre-tax deferral account) can be withdrawn on a tax-free basis if the Roth account was established at least 5 years ago, regardless of whether or not some of the distributed money sat in the account that long (and, of course, if the participant is at least 59.5 years old). Also, if the participant dies before a distribution can be made, their beneficiary can be paid the Roth amount on a tax-free basis, with the same choices in payout methods as a pre-tax deferral account, unless the doc specifies different methods by source. Do I have both statements right?"

"I found out yesterday the sale of my client's business is set to close escrow on September 30. They sponsor a 401k/PS plan with safe-harbor matching contributions. I am not privy to all of the details but here is what I do know:

1. Sale of the business is set to close on 9/30/26.
2. The sellers have not notified their employees of the pending sale.
3. The buyer sponsors a 401k plan with basic match only (no non-elective contribution). They do not wish to merge the sellers plan with theirs.
4. Assuming escrow will close on 9/30, all employees (approximately 40) will terminate employment and be given the option to work for the buyer's company. I do not know how much notice they will give them. I 'assume' they will be given the option to roll their benefits to the new company's plan.
5. The sellers do not wish to apply for IRS approval of the plan termination. We use CalcAir's pre-approved documents.
6. The sellers wish to establish a termination date to coincide with the closing of escrow. I don't think they can do this based on notice timing requirements.

What is the earliest date they can terminate the plan after close of escrow? Is the 60 day notice of intent to terminate still applicable under these circumstances? I recall reading 15 day notice is only required for DC plans but I am unable to cite where I read this. I will take all necessary steps to terminate the plan per IRS guidelines. I'm just not sure when to proceed since they do not know when escrow will close and there is the off chance the sale will fall through. Based on the limited amount of information I have available, how do some of you think this should play out?"