A US TPA: key financial process automated
A six-month build of a complex financial application for The Retirement Advantage, Inc. (TRA), which in the client's words drastically reduced the manual effort in a key financial process.
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Nondiscrimination tests and annual limit checks built into your systems, with every result traceable to the census rows behind it.
Deferral and matching/after-tax contribution tests under IRC 401(k)(3) and 401(m)(2), current or prior year method.
Refunds of excess contributions, recharacterization and QNEC calculations, following the IRS correction approach.
Key employee determination and the 60% test, with minimum contribution amounts.
Ratio percentage and average benefits testing inputs, by plan and by group.
Per-participant elective deferral totals checked against the yearly limit, with catch-up handled separately.
Employee and employer additions against the lesser of the dollar limit or 100% of compensation.
Highly compensated employees by ownership and prior-year compensation, with top-paid group election.
401(a)(17) compensation cap applied before allocations and testing.
Bad dates, duplicate IDs and impossible hours are caught before a test runs. More on data intake.
Under the current-year method, the average deferral rate of highly compensated employees (HCEs) may not exceed the greater of:
With an NHCE average of 4.0%: 1.25 × 4.0% = 5.0%; the lesser of 6.0% and 8.0% is 6.0%; so the HCE limit is 6.0%. Software we build shows these steps next to the result, so a reviewer sees the arithmetic, not just "pass" or "fail".
| Limit | 2026 | 2025 |
|---|---|---|
| 402(g) elective deferrals | $24,500 | $23,500 |
| 415(c) annual additions | $72,000 | $70,000 |
Source: IRS Notice 2025-67 and Notice 2024-80. Check the IRS cost-of-living page for current figures.
A six-month build of a complex financial application for The Retirement Advantage, Inc. (TRA), which in the client's words drastically reduced the manual effort in a key financial process.
Read moreDevelopment of Expand Financial's software that automates revenue management for recordkeepers, TPAs and payroll processors.
Read morePlans, census, annual projects, compliance testing, a recordkeeping ledger, payroll intake and billing in one product. Working pilot build with synthetic data.
Read moreADP and ACP nondiscrimination tests, top-heavy (section 416), minimum coverage (section 410(b)), the 402(g) deferral limit, 415(c) annual additions, catch-up eligibility, the 401(a)(17) compensation limit, and HCE and key employee determination, plus corrective calculations for failed tests.
Each test is built against worked examples that your compliance team signs off. Those examples become an automated regression suite that runs on every change, and every result keeps the census rows and inputs behind it.
Limits live in a table versioned by year, not in code. When the IRS announces new figures each autumn (for 2026 in Notice 2025-67), the new row is added and reviewed, and earlier plan years keep their own limits.
Under the current-year method, the highly compensated employees' average deferral rate may not exceed the greater of 1.25 times the non-highly compensated average, or the lesser of that average plus 2 percentage points and 2 times that average. If the NHCE average is 4.0%, the HCE limit is 6.0%.
No. It removes the manual assembly and arithmetic. Interpretation, plan-specific decisions and sign-off stay with your team or ERISA counsel.
Plan administration systems for US third-party administrators: plan years, census, testing, 5500 data and billing.
Read moreParticipant, source and fund ledgers, contribution posting, loans, distributions and reconciliation.
Read morePayroll file mapping, validation rules and exception queues before data reaches the ledger.
Read moreA TPA operating system we built for independent US retirement plan administrators: compliance testing, recordkeeping ledger, payroll intake, projects and billing in one place.
