Apex Pension Strategies the TPA Service 03 / 04
TESTED. FILED.
FIXED IF IT FAILS.
Compliance is the annual work of proving a qualified plan still meets the rules it was granted under, and of correcting it properly when something comes back wrong.
Three 2026 dates with a price attached
- March 13, 2026
- ADP and ACP refundsTwo and a half months after the plan year ends, and March 15, 2026 is a Sunday. After the working date, a 10% excise tax.
- July 31, 2026
- Form 5500 and Form 8955-SSAFor the 2025 plan year. Form 5558 by this same date moves it to October 15.
- December 31, 2026
- Twelve months, and the amendmentThe outside deadline for the 2025 corrections, and the SECURE 2.0 amendment date.
THE TESTS, AND WHAT UNDOES THEM.
Every plan is measured against the same short list of Code sections. What differs is which of them bite, and a failure is rarely a surprise to the arithmetic. It is a design decision or a payroll decision arriving a year late.
The 2026 numbers the tests are run against
- Highly compensated employee414(q)
- $160,000On 2025 compensation
- Key employee, officer416(i)
- $235,000For the top-heavy test
- Annual additions415(c)
- $72,000Per participant, per year
- Elective deferrals402(g)
- $24,500One person, every plan
- Compensation counted401(a)(17)
- $360,000The ceiling on any formula
- Top-heavy line416
- 60%Held by key employees
The highly compensated threshold has not moved for a second year, which reads like relief and is not. A company that gave raises in 2025 will find that group larger in 2026 anyway, and the ADP and ACP results move underneath it.
| Section | What it asksWhat fails itWhat fixes it |
|---|---|
| 401(k) ADPActual deferral percentage | The highly compensated deferral average, held to the non-highly compensated average plus two points, or 200% of it, whichever is less.Owners defer; the workforce does not.Refunds to the highly compensated, a qualified nonelective contribution to the rest, or both. |
| 401(m) ACPActual contribution percentage | The same arithmetic, on the match and on after-tax money.A match only the people who can afford to defer ever earn.The same two routes, applied to the match. |
| 410(b)Minimum coverage | How many non-highly compensated employees benefit, against how many highly compensated do.An eligibility rule that keeps a class of people out.Bring more of them into the year, or amend the rule. |
| 401(a)(4)General nondiscrimination | The contributions and benefits themselves, read for a tilt toward the highly compensated.A cross-tested formula whose groups no longer match the census.Top up the rate groups that fall short, or redraw them. |
| 416Top-heavy | Plan assets held by key employees, against a 60% line.Founders twenty years in; most of the staff hired last spring.Up to 3% of pay to the non-key participants, and faster vesting. |
| 415(c)Annual additions | Everything allocated to one participant in a year, against the dollar limit or 100% of pay.A profit-sharing allocation on top of a full deferral and match.Return or reallocate the excess by the method the document names. |
| 402(g)Elective deferrals | What one person may defer, added across every plan they are in.A mid-year job change, and two plans that cannot see each other.Return the excess with its income by the following April 15. |
| 401(a)(17)Compensation counted | The pay any allocation formula may count.A payroll feed sending full pay, and an allocation built on it.Rerun the allocation on capped pay and correct the difference. |
| 404Deduction limit | How much of the employer contribution the company may deduct.A contribution sized from the tax return, not the document.Carry the nondeductible part forward, or size it before it is deposited. |
| 409 · 409(p)ESOP limitations | ESOP allocation and distribution rules, and in an S corporation the 409(p) concentration test.Too much of the benefit with too few people.Rarely quick. The concentration was built above the plan. |
| 1042Selling shareholder | The conditions on deferring gain on a sale to the ESOP, and the limits after it.An allocation to somebody the election put out of bounds.Reverse it and reallocate. The terms were set at the sale. |
Which sections apply depends on the plan and on who owns it. The ESOP rows carry a second question, and it belongs with the trustee.
TWO DEADLINES BEHIND ONE FAILED TEST.
A failed ADP or ACP test has two dates attached to it, not one, and the distance between them is the difference between a measured correction and a panicked one.
Two and a half months after the plan year ends
March 15
for a calendar-year plan
Corrective distributions made by then avoid the 10% employer excise tax under section 4979. Nothing else turns on this date.
March 15, 2026 is a Sunday. No primary authority moves the excise-tax window to the Monday, and practitioner reading is that it does not, so we work to Friday, March 13, 2026.
Twelve months after the plan year ends
December 31
2026, for the 2025 plan year
The outside edge. Past it, a failed ADP or ACP test stops being a correction question and becomes a question about the plan’s qualification.
The span between them
Correcting between the two dates is permitted, and missing the first one is not fatal. It costs the 10% excise tax on the excess, reported and paid by the employer on Form 5330, due March 31, 2027 for the 2025 plan year.
- EACA plans
- June 30, 2026An eligible automatic contribution arrangement gets six months for the same correction.
- Excess deferrals
- April 15, 2026A 2025 deferral over the section 402(g) limit comes back out by then.
- Allocable income
- To the plan year endMeasured to the end of the plan year. No gap-period income after it.
THE DATES THAT COST SOMETHING.
A plan year carries dozens of dates. These are eight dates in 2026 with an excise tax, a penalty or the plan’s qualification behind them. The rest is work, and work belongs on the administration page.
February 22026
Form 1099-R copies to recipients, and Form 945 for 2025.
January 31 fell on a Saturday.
The costInformation-return penalties, charged per return, and a plan files one per distribution.
March 132026
Corrective distributions for a 2025 ADP or ACP failure.
March 15 is the rule. March 15, 2026 is a Sunday, so the working date is the Friday.
The costA 10% excise tax on the whole excess, owed by the employer.
April 152026
Excess deferrals over the section 402(g) limit, returned for 2025.
A plan hears about a second employer’s deferrals from the participant.
The costThe correction route section 402(g) gives for that year closes.
June 302026
The same corrections, for a plan with an eligible automatic contribution arrangement.
Six months rather than two and a half, for that design only.
The costAfter it, the excise tax applies as it would have in March.
July 312026
Form 5500, Form 5500-SF and Form 8955-SSA for the 2025 plan year, and Form 5558 to extend.
One Form 5558 moves both to October 15.
The costLate-filing penalties, and an extension filed after the due date is not an extension.
October 152026
The extended Form 5500 and Form 8955-SSA, and the PBGC premium filing for 2026.
The PBGC date returns to October 15; September applied to 2025 plan years only.
The costA late premium filing, for anyone working from last year’s calendar.
November 302026
Last day to add a 3% nonelective safe harbor for 2026 by amendment.
The statute says before the thirtieth day before the plan year closes, which makes November 30 the last safe day.
The costThe safe harbor for the whole year, and ADP and ACP come back with it.
December 312026
The twelve-month deadline for 2025 ADP and ACP corrections, the SECURE and SECURE 2.0 amendment deadline, and the 403(b) Cycle 2 restatement.
Three unrelated obligations on one square of the calendar.
The costQualification on the first, the written document on the other two.
AN AMENDMENT IS NOT A RESTATEMENT.
The two sit under one heading in most people’s minds and in a fair amount of published material. They are different documents on different clocks, and one of the dates is widely reported wrongly.
- December 31, 2026The amendment
- The SECURE, CARES and SECURE 2.0 amendment deadline for most non-governmental, non-collectively-bargained qualified plans, and for 403(b) plans not maintained by a public school. A January 2026 notice moved it to December 31, 2027 for IRA, SEP and SIMPLE IRA documents only, and left the qualified plan date where it was. The extension was always about the paper: the mandatory provisions have had to be operated correctly since each one took effect.
- September 30, 2028The restatement
- The end of Cycle 4 for pre-approved defined contribution documents: the date a plan is rewritten onto the current approved document rather than patched. A good deal of published material gives this as December 31, 2026. That is the amendment date above, on a different document. A 403(b) sponsor does have a December 31, 2026 restatement date, because Cycle 2 closes that day.
CATCH-UP IS A ROTH QUESTION NOW.
For 2026, a participant whose 2025 Social Security wages from your company exceeded $150,000 has to make catch-up contributions as Roth. Three details decide whether a plan gets that right.
- It is Social Security wages, which is Form W-2 Box 3. Not Box 1, and not Medicare wages. The wrong box gives a confident answer that is wrong at the margin.
- It is measured per employer. Somebody with no 2025 Social Security wages from your company is not subject for 2026, which covers a new hire and a partner whose income is all self-employment.
- The mandate applies to a calendar-year plan from January 1, 2026. The final regulations governing how it is administered generally apply from 2027, and a reasonable, good-faith standard covers the space between. A standard to meet, not a delay to wait out.
Correction methods exist for catch-up money that went in pre-tax when it should have gone in as Roth. They carry conditions, and one stops being available with the passage of time, so that conversation is worth having early.
Two consequences are design questions. If the rule reaches anybody in your plan, nobody may make catch-up contributions at all unless every catch-up-eligible participant can make them as Roth, so a plan that never added Roth decides that this year. The section 603 amendment is generally due December 31, 2026. Both belong on plan design.
DEPOSITS ARE MEASURED IN DAYS.
Elective deferrals stop being the company’s money the moment they are withheld, and the standard for getting them into the trust is not a date. It is as soon as they can reasonably be segregated from the employer’s general assets.
A plan with fewer than 100 participants has a seven-business-day safe harbor under that standard. A larger plan has none at all, so the measure becomes the fastest deposit that employer has ever managed.
LATE IS NOT A DISASTER; UNADDRESSED IS.
The correction is mechanical. Deposit the deferrals, work out the earnings the participants did not receive, contribute those, and report the late deposits on the Form 5500, usually through the Department of Labor’s Voluntary Fiduciary Correction Program, which provides relief where its terms are met.
One filing detail catches small plans. Information returns have to be filed electronically at ten or more, and the ten is counted across form types rather than per form. Six Forms 1099-R and four Forms W-2 is ten.
WHAT THIS DESK DOES NOT DO.
The work above has edges, and saying where they run is more useful than implying there are none.
Advice
We do not give legal or tax advice. We describe what the Code and ERISA require of your plan, correct it inside the programs the IRS and the Department of Labor provide, and give your attorney and your CPA the plan facts they need. Apex Pension Strategies, Inc. is not a law firm and is not your accountant.
The audit
We do not perform the plan’s audit. A plan with 100 or more participants generally attaches an independent qualified public accountant’s report to its Form 5500, and that accountant is an independent CPA firm rather than us. Since the 2023 plan year a defined contribution plan counts participants with account balances at the start of the plan year rather than everybody eligible, subject to the 80-to-120 rule, which quietly moved a great many plans out of audit status. We supply the schedules, the reconciliations and the working papers the auditor asks for.
Some failures do not belong on this page at all
- Plan DesignA failure that keeps recurring is a design problem in disguise
- ERISA ConsultingA failure born of an acquisition or a new entity starts as a controlled group question
- Plan AdministrationThe day-to-day work that produces the data every test is run on
- 3(16) Plan AdministratorThe signature on the Form 5500, and the responsibility with it
SEND US THE TEST RESULTS.
Send the testing results and the plan document. We will tell you which correction options exist, what each one costs relative to the others, and which deadline you are actually working to.
- PO Box 88208, Atlanta, GA 30356
- Telephone
- (770) 410-5022
- Fax
- (770) 410-5023
