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We know we can retroactively adopt plans and we can also retroactively improve benefits. However, if a controlled group member wanted to retroactively join the existing plan of a related controlled group member would this fall under one of the two scenarios(i.e., IRC 401(b)(2) or (b)(3)?

Could a plan sponsored by a sole proprietorship be amended to include a partnership for the prior plan year if the partnership adopts the plan before the tax filing due date?

Hi Law firm. CB plan, effective 2024. For 2024 had 15 active participants with 0% vesting - vesting effective with inception of the plan. During 2025 exceeded 25 active participants (26 in total), again all with 0% vested balances. During 2026 dropped to 20 active participants. No partial termination issues. It will never exceed 20 again. So, during 2025, plan is covered by PBGC and will be so for 2026 and all future years, at least according to PBGC rules that I am aware of. Any way out of this, is there anything I can do? Am I missing an option here? Really sucks that for 1 year only they are paying the price for it. Thanks

Just looking for some clarification and confirmation... The Roth catchup requirement rule is that if you earned $150K of W2 income the previous year then your catchup deferrals must be Roth deferrals. Is there something that I can show a CPA clarifying reported K1 income? I googled and found someone saying the rule points strictly to W2 income.. Thanks

What are the issues if plan eligibility requirements are liberalized to accommodate a family member and then switched back at a later point in time?

Patrick Tool LLC employer is participating in Business 401(k) Plan (MEP plan) effective 01/01/2023. During mid of 2025, Patrick Tool LLC decided to establish new plan and spin off from Business 401(k) Plan and completed the participants cessation on 31/07/2025 and establish new plan as Patrick Tool 401(k) Plan as effective date of 08/01/2025. The first return, it will be short plan year. For the compliance testing whether we required to do two separate testing for two period like 01/01/2025 to 07/31/2025 and 08/01/2025 to 12/31/2025. Since the employer is same whether we have to aggregate both the period data and required to do compliance testing for full plan year under Patrick Tool 401(k) Plan. Even though the plan effective is mid of the plan year, we have to complete the testing based on full year compensation and contribution or else based on the short plan year.

Can the employer amend the plan to add Roth if the 403b plan is structured as not subject to ERISA under the limited involvement safe harbor regulation 2510-3-2(f)? If Roth is not added, then any high earner over the FICA limit cannot do catch-ups. Due to this SECURE 2.0 requirement, I would think adding Roth could be permitted. Any thoughts?

I am always second guessing myself. A 62 YO who is still working wants to roll some of his plan money into an IRA. He is older than age 59-1/2. Plan is designed with 59-1/2 as the normal retirement age. No problem here ... right?

Previously we had been using the rates from the Funding Table 2A (Post-ARP/ILJA 25-year segment rates) for our calculations. This year it was: Tier 1 - 4.75 Tier 2 - 4.81 Tier 3 - 5.50 However, I believe those rates are no more (or maybe I'm wrong). What are we supposed to use in their place? Thanks in advance!

Joe Smith is a dynamic guy and formed a corporation 40 years ago that acquires and manages apartment buildings. He is the 100% shareholder. They now have over 60 apartment buildings. They collect the rents, pay expenses etc. The corporation has about 50 full time employees. The corporation (GLP, Inc.) has sponsored a 401(k) plan for about 25 years. Every year they make a 12% of salary contribution to all eligible employees and have for many years. Joe is also quite the artist and has over 100 sculptures and other pieces of art. To show his art he bought a large 7,000 square foot house and formed a Tax Exempt entity called HSB that owns the property and employs 12 full time employees. It is very popular and gives 3 tours a day 5 days a week. Joe wanted HSB to sponsor the same type of 401(k) plan that GLP has for years. So a 401(k) plan with the same provisions was adopted for HSB 10 years ago and continues today. I would think GLP and HSB would be related entities as Joe Smith owns 100% of GLP and has control of governance of HSB. Question: Sometimes employees of GLP become employees of HSB and vice versa. If both entities are considered related, must former employees of GLP be provided full benefit elections if they are right away hired by HSB? Or can their GLP plan benefits simply be transferred to the HSB plan if both entities are considered related? Thanks.

Participant requests hardship withdrawal from 401k plan. No question that request meets requirements for valid hardship withdrawal. After check is issued participant changes his mind. He has not received the check and has not cashed it. Plan sponsor asked administrator to cancel the check and return funds to the plan. Administrator says "okay - no problem" just need you to sign a hold harmless agreement. In preliminary research I came across old posts here referencing informal IRS guidance that once the check is issued, the hardship withdrawal cannot be rescinded (based on the constructive receipt doctrine) and the funds may not be returned to the plan (because return of hardship withdrawal funds is not an eligible rollover into the plan) Can anyone provide a cite or location of this informal guidance or other authority for telling the administrator they are wrong and the funds cannot be put back in the plan?

The plan excludes Union employees for the employer contribution including safe harbor. The plan is opted for safe harbor non elective and HCEs are excluded for the SH Non Elective. The plan has totally 4 HCEs (2 union and 2 non union employees) and 2 NHCEs and both are Union employees. None of the employees received the SHNE contribution. Whether the plan is subjected to ADP for union employees and ADP ACP for non union employees if the additional employer match is allocated. My understanding is the plan is deemed to pass since the exclusion is not discriminate in nature against NHCEs and both of them are not received the contribution. Is there any other opinion on this.