Refresh the census before anyone models a number.

Tomorrow is September 15. For a calendar-year defined benefit plan, including a cash balance plan, that is the general due date of the minimum required contribution for the 2024 plan year. If that deposit is still open, it is the first item on the page, and it is not a modeling project. The amount is the amount the Enrolled Actuary certified. A miss is a 10 percent excise tax on Form 5330, with a further tax if the shortfall is not corrected. Pay it, or confirm in writing that it was paid. Then, and only then, talk about a new number for 2025.

The new number is only as good as the census under it. September is when firms ask for "a quick update" of an illustration that was built in the spring, or last fall, on a headcount everyone remembers. Memory is not a census. People were hired. People left. Hours crossed a threshold. A spouse's wage changed. A second entity acquired an employee. Ownership shifted by a few percent and changed who is highly compensated. Any one of those facts can move the contribution, the test, or both. Refreshing the census is the work. The model is what happens after the work.

Sterling Pension Group is a third-party administrator in West Hartford. We will not send a figure to an Enrolled Actuary, and we will not show you a figure from an actuary, on a census we have not refreshed. We are not an actuarial firm. The certification is the actuary's. The census is the fact pattern you and we are responsible for getting right. This briefing is not tax, legal, or actuarial advice.

What a census is

A census is a person-by-person file, not a total. For each person the plan might have to consider, it states the legal name, date of birth, date of hire, date of termination if there is one, hours worked in the year, compensation as the plan defines it, ownership percentage, and whether the person is a spouse or child of an owner. It states job class only if the formula actually uses classes. It states which employer paid the person if more than one employer is in the controlled group.

Hours are not a formality in a plan that uses a thousand-hour rule or a last-day rule. A person at 980 hours and a person at 1,020 hours are different participants. A person who terminated in March may still be due a contribution, or may have forfeited an allocation, depending on sentences in the document that a headcount will not reveal. Pull hours from payroll. Do not estimate them from a schedule.

Dates of birth drive everything in a defined benefit valuation and almost everything in a cross-test. A wrong birth year is not a clerical miss. It changes the maximum benefit, the projected account, and the testing results. Read the dates off a document, not off the way the person is described in meetings. "Early sixties" is not a date of birth.

Compensation has to match the definition in the plan. For an S corporation shareholder, that is wages, not distributions and not the sum of the two. For a partner, it is earned income as the CPA measures it, not the draw. For an employee, it is the wage the definition includes, which may or may not include bonuses, overtime, and pre-tax deferrals. Year-to-date compensation in September is the right starting point for a 2025 illustration, clearly labeled as year-to-date. Last year's W-2 is the right figure for a 2024 valuation that is somehow still open. Mixing the two years on one spreadsheet is how a deposit gets justified with the wrong limit.

The 2025 limits still bound the file. Compensation taken into account cannot exceed $350,000. Elective deferrals cannot exceed $23,500, plus a catch-up of $7,500, or $11,250 if the participant attains age 60, 61, 62, or 63. The higher catch-up replaces the lower one. Annual additions other than catch-up cannot exceed $70,000. The defined benefit dollar limit is an annual benefit of $280,000, not a contribution. Those figures come from IR-2024-285 and are summarized on the IRS COLA page. The benefit limit's age and service reductions are on the IRS benefit limits page. A census that ignores the cap will produce an illustration the actuary has to throw away. A census that treats the $280,000 benefit limit as a deposit target will produce a conversation the actuary has to restart.

Who is missing from the file you think is complete

Owners regularly undercount. The front desk hired in May, the associate who is still in a waiting period, the per-diem clinician, and the child on a summer wage are people. Whether they are participants is a document question that can be answered only if they are on the list. Leaving them off because "they are not eligible yet" hides the moment they become eligible. A waiting period that ends on October 1 is a September fact.

Related employers are the largest omission. List every entity any owner owns, including the ones that "do not have a plan" and the ones that are "just real estate." Common control and affiliated service rules can treat those entities as one employer. Their employees become part of your coverage test. A model of the practice alone is then a model of the wrong employer. Publication 560 introduces the idea that the employer sponsoring the plan must consider the controlled group. It will not map your entities. The map is the census attachment nobody wants to prepare and everyone should.

Spouses need their own rows. A joint household row, with one compensation figure and two ages in a comment, cannot be valued. The spouse's hours, wage, hire date, and ownership are separate facts. A spouse who does not work in the business should not be on the participant census at all. A spouse who does work and is paid should not be described as "not really an employee."

Terminations need rows too. A person who left in 2025 may affect the 2025 test, the top-heavy count, and whether a contribution is owed. Deleting the row because the person is gone is how the file looks clean and the test comes back wrong. Mark the termination date and leave the person visible.

Ownership changes need a date. A partner who crossed 5 percent, or who dropped below it, changes highly compensated status in a way that pay alone does not. For the 2025 year, pay-based highly compensated status generally looks back at 2024 compensation against the $155,000 threshold then in effect. Ownership status looks at this year and last year. A September redemption of a partner's interest can matter to both. Put the percentage and the date on the row. Do not bury the transaction in the operating agreement and assume the plan file heard about it.

Why the model has to wait

An Enrolled Actuary values the census you send. If you send last year's, you receive last year's plan with this year's label. The minimum and the maximum will look precise because valuation software is precise. Precision is not accuracy. We would rather delay a model by two weeks than deliver a precise answer to the wrong facts. The fall design window is still open for a first-year 2025 plan only if the census starts now. A model requested tomorrow morning, for a meeting tomorrow afternoon, will be a model of whatever incomplete file was already in the drawer.

Illustrations should say, on the page, the census date and the compensation basis. "Data as of March" is not a shameful label. It is an honest one. A September decision needs a September label. The illustrations you rely on should be replaceable. If you cannot bear to replace them, you are attached to a number rather than to a plan. Numbers move when a 28-year-old becomes eligible. Plans are supposed to notice.

The same discipline applies to a plan you already administer. The 2024 Form 5500 series, if it was extended, is due October 15, 2025. The census in that filing has to match the valuation and the trust, not a September recollection of 2024. The IRS Form 5500 corner and the Department of Labor's Form 5500 page describe a return that reports participants and assets. Those counts come from the file. A refreshed 2025 census does not rewrite the 2024 return. Keep the years in separate files so a new hire does not wander into a year when the person was not employed.

Minimum funding, deduction timing, and census refresh are three tasks that like to share a week in September. They are not one task. The September 15 deposit follows the 2024 certification. The deduction, under section 404(a)(6), follows the tax return and its extension, which your CPA has to confirm. A corporation's extended due date may be September 15. A sole proprietor's may be October 15. The 2025 census follows payroll as it stands this week. Doing the census does not satisfy the deposit. Making the deposit does not refresh the census. The deadline calendar keeps the dates from being nicknames for each other. The administration year is the practice of touching the file often enough that September is a confirmation rather than an archaeology project. The life of the plan after adoption is mostly that confirmation, repeated.

A file that is good enough to model

You do not need a perfect year-end census on September 14. You need a current one that knows what it does not know. Year-to-date compensation, marked as year-to-date, is good enough for a range. Annualized compensation, presented as a fact, is not. Unknown hours, marked unknown, are good enough to stop a model. Unknown hours, filled in with 2,000 because that is a full year, are how eligibility is invented.

Ask payroll for a register, not for a summary. The register should run from January 1 through the most recent pay date, with gross wages, hire dates, birth dates if payroll has them, and termination dates. Reconcile it to the quarterly payroll tax return if the headcount feels too small. Practices that "have six people" often have eight when the register is printed. The two who were forgotten are usually the ones the test needed, or the ones the test did not want. Either way, they belong on the page.

Send the related-entity list even if every answer is "no employees." A written no is a record. An omitted entity is a gap. If you are not sure whether an entity is related, include it and say you are not sure. The plan administration on our side includes asking. It does not include guessing that a rental LLC is irrelevant.

When the file is refreshed, the model can be a range: a contribution if the year finishes on the current run rate, and a contribution if compensation or headcount moves the way you think it might. Both are illustrative. Neither is an IRS cap. The actuary can certify a number when the year, the document, and the file are far enough along to certify. September 14 is early enough to start that file and late enough that last spring's file should be retired.

What to do in the next two weeks

If the 2024 minimum is unpaid, arrange the September 15 deposit before you do anything else on this list. Confirm the amount from the certification, not from memory.

Then build the 2025 census from the payroll register. One row per person. Columns for date of birth, date of hire, termination date, year-to-date compensation, hours, ownership, and employer. Attach a list of other entities. Mark year-to-date figures as year-to-date. Do not annualize them in the same cell.

Retire any illustration that does not show a census date. Ask for a new range only after the register is in the file. Send us the register, including the people you believe are ineligible. We will tell you which rows the plan has to care about. We will not model a number from the headcount you remember.