"Plan excludes fringe benefits from definition of compensation. Is jury duty pay included or excluded from plan compensation? I have not been able to find anything definitive."

"50,000 in a has-a-ticker-symbol MM fund transferred in kind to a owner-only DB plan last month as a calendar year plan's 2023 deposit. Smells bad because it's not really cash. Am I right? (And what's the way out of it? I read a bunch of past threads here and it sounded like 'sell it at arm's length' but who's gonna pay this guy's plan 50,000 in actual cash to buy his plan's mutual fund?)"

"Our software for minimum gateway purposes uses 414(s) comp for the 1/3 test and 415(c)(3) comp for the 5% test. Example: employee became eligible 7/1/2023 -total wages for the year $50,000 of which $25,000 was earned after the plan entry date. The person terminated so top heavy does not apply. The plan defines compensation as W-2 wages. But the person has to get the minimum gateway as the plan is cross-tested. The Question: Is $25,000 compensation used for both the 1/3 test and the 5% test or must $50,000 be used for the 5% test. The software seems to indicate $25,000 is used for the 1/3 test and $50,000 is used for the 5% test."

"Client in process of Chapter 11 bankruptcy and near appointment of Liquidating Trustee. In process on terminating the 401(k) Plan and the record keeper / trustee (very large mutual fund company) has prepared draft Letter of Direction with some unusual (at least to me) provisions. Curious for any thoughts / experience from similar situations.... Among other things, draft letter provides as follows:

1. Repeatedly says company 'is' terminating plan and phrasing all the provisions throughout as if this will be of a future date when they know plan was already 'terminated' and even reference prior date....
2. Provides plan sponsor will not restore the forfeiture account funds to participants and if participants reach out 'the Plan Sponsor will handle outside the Plan.' Huh? ...
3. Expressly indicates this is a Chapter 11 bankruptcy and that a Bankruptcy Trustee has been appointed and will act as a fiduciary of the plan going forward.... [T]here is no Bankruptcy Trustee nor will there ever be.... [W]ho does step in normally in these cases?
4. There are also provisions noting that no FDIC or DOL Trustee will be appointed. I'm unfamiliar with an FDIC Trustee or DOL Trustee. Is that a real thing? Is that possibly some reference to abandoned plan situations or something?
5. Following appointment of the Liquidating Trustee, the company / debtor (and officers) will cease to exist as a matter of law so there technically is nobody around with any real authority to act for the company / plan administrator or take action for the plan. I understand the DOL may consider the existing officers functioning as fiduciaries to continue in that role after the company is gone and employment has ended but is that what typically happens in these situations? Is there any other way to approach?
6. There are a few participants in a capital preservation fund that cannot be liquidated / removed by the plan without at least 12 months' notice. If the participants in that fund affirmatively elect to move their funds out of the account and roll over their balances, is the 12-month notice period still applicable or is that only an issue if they must be forced out? The letter suggest it may apply whether or not they request to roll over. If so, they're into 2025 before all amounts get paid.
7. Letter notes the company will continue to be responsible for recordkeeping fees through end of quarter following the plan termination date. Well, the company adopted resolutions 'terminating' the plan in September so that suggests fees through December 31, 2023 but there is a lot left to be done by the record keeper ... and so presumably lots more fees to come.... There are some funds in the forfeiture and suspense accounts that, per the plan, can be used to pay plan expenses. Will they hold making any allocations / distributions from those accounts until all work is done then follow any force out distributions with some later distribution? If so, how long does that take -- they have to do final 5500 which is a long time in the future."

"I have a question regarding fa mily attribution. Does it apply to owners who own more than 1% of the company?"

"I've got a NFP MP plan with an hours requirement to get the allocation. They make deposits during the year to estimate the annual contribution (it's a straight formula, so in theory this is easy to calculate each month). This year, they put in too much because someone ended up not working the required hours. So this is an excess contribution to the plan based on the formula, not the 415 limit for anyone (and not over 404, not that they have a deduction to worry about). Does it have to be refunded? Any penalty? I know the plan sponsor is going to want to let it stay in the plan; is that subject to an excise tax then?"

"A participant terminated employment in early 2021. Left funds in the plan. Less than $5,000. There should have been a mandatory forceout in 2022 when the 2021 valuation was done, but for reasons unknown, it wasn't. When the 2022 valuation was done, (in 2023) this was caught, and a mandatory IRS rollover was processed in the fall of 2023. Unknown to everyone, (apparently) the participant had died in the summer of 2022! Just to make it more interesting, no named beneficiary, and minor children involved, but that's a separate issue. I'm really not sure what the ramifications are here, and it is a small amount of money, so I'm sure the Plan Administrator is willing to take a little 'risk' if necessary, to clean this up without excessive time and effort. If the vendor is willing to reestablish this as a plan account, (they are being questioned now) then it should be simple, other than correcting the 1099 (which may or may not have been issued yet -- I don't know) -- the death distribution will simply be processed according to plan provisions. Any thoughts on this?"