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David Rigby, for many States’ and political subdivisions’ employee-benefit plans, an agency or instrumentality that administers a plan might be permitted or mandated to make plan-administration procedures by making and publishing a rule or regulation under an administrative-procedure act and other law that governs the government’s other executive agencies. So, writings an ERISA-governed plan’s administrator might call a claims procedure or a QDRO (or QCMSO) procedure might, if made for a governmental plan, be compiled in the State or local government’s code for rules and regulations. For some plans for Federal government employees, rules for a “Court order acceptable for processing” are compiled in the Code of Federal Regulations at title 5, chapter I, subchapter B, part 838 (Court Orders Affecting Retirement Benefits)—5 C.F.R. §§ 838.103 to 838.1121.

When a DRO is signed - and the asset valuation date (via date or otherwise) are two different things. The DRO might say the alternate payee gets 65% of the vested benefit as of November 17, 2019, with adjustments for earnings thereafter, but the actual DRO might be signed and recorded with the court years later. And the actual split of the money might be well after that. TL:DR Present the DRO - ask for copies of the QDRO policy and ETA on decision - get decision - get forms to get money out. Person B can perhaps start by giving a copy of the DRO that was filed with the court to the Plan Administrator (this person, can be an entity, business is usually listed in the SPD). If it is the EMPLOYER it is helpful if it is going to someone whose responsibilities include the retirement plan. Person B might want to include a cover letter with the DRO - asking for a copy of the plan's QDRO procedures/policy, and confirmation that the DRO has been received by the Plan Administrator and that it will be reviewed. Ask for an ETA on when the DRO will be accepted as Qualified, or rejected. And include where the written acceptance or rejection should be sent to notify the alternate payee. Keep notes - and dates - and copies of correspondence. When the ETA passes - and no Acceptance or Rejection is received in writing - ask for an update, in writing. If DRO is accepted as Qualified - the Plan Administrator(or perhaps a recordkeeper) calculates how much the current account belongs to the alternate payee, and the segregates or tracks it separately. Then the alternate payee asks for a distribution form, and can do whatever the plan allows with the money, often rolling it out into their own IRA. If the alternate payee disagrees with the amount that was segregated - then they can ask for supporting documentation, such as statements or what formula was used to arrive at the split amount. How much detail they receive will vary a lot based on a variety of factors. You do not mention where the plan's money is held. None of this is legal advice. Just a simplification of what to actually focus if someone wants to get the plan to review a DRO.

CFR? Really? You are stating/suggesting that the (missing) guidance is a regulation? Just a guess, I would expect it to be an administrative procedure. In writing.

Seeing how popular the standard safe-harbor match was in the past and now the QACA, I was shocked when a client told me that Gusto Payroll cannot incorporate a tiered match formula into its system, and that the client (or we, as the TPA) would need to do it manually. Has anyone encountered this limitation with Gusto before? What is common among payroll companies/software?

First, an overview observation, and then an attempt to give a helpful answer. As someone that you might refer to as a QDRO lawyer, I see a lot of information and query that I think is very unlikely to matter in terms of determining whether or not the domestic relations order is a QDRO, including different vintages of plan document. A 401(k) account is a relatively easy thing to divide from a qualification perspective, assuming conventional liquid assets. Plan terms usually have no substantial effect. Because of the excess of text that appears to be irrelevant, it seems that there is a lot of confusion. The confusion also appears involve identification of the relevant “fiduciary” or fiduciaries who will be responsible for cutting through all of the noise and making decisions about the domestic relations order as qualified or not. The usual circumstances relating to a QDR involve two pieces: (1) what part of the 401(k) account will the alternate payee get? This has everything to do with the total divorce settlement and not necessarily anything to do with the terms of the 401(k) plan (except maybe vesting). The plan is totally agnostic about what the alternate payee should receive, except that the alternate payee cannot receive an amount or type of benefit that the plan does not provide for (which is a qualification matter and almost never an issue with a 401(k) plan). For determining the amount that the alternate payee should receive in the greater scheme of things, the parties need domestic relations, lawyers to come up with a domestic relations order that I will refer to you as the “divorce decree” which may or may not be the domestic relations order that is submitted to the plan to end up with a QDRO (probably not; see the explanation below about the role of the QDRO lawyer). (2) A domestic relations order (DRO) must be submitted to the plan in order to tell the plan what the divorce decree specifies to be the interest in the plan awarded to the alternate payee. The DRO must set forth the information that the relevant statutes require, which neatly corresponds to the information that the plan administrator (or other QDRO fiduciary) actually needs to administer the DRO and give the alternate payee what the divorce decree has determined that the alternate payee should get. Unfortunately, a QDRO lawyer (or other competent professional) may be required to make sure that the formal qualification requirements are satisfied. A QDRO lawyer will be concerned with plan terms, but, as mentioned before, plan terms usually have little effect. An experienced QDRO lawyer can probably put together a perfectly good domestic relations order while being almost blind to plan terms — not that they actually would. A QDRO lawyer is indifferent to the settlement terms that relate to what the alternate payee “should” receive from a 401(k) plan as long as the the “what” is expressed in the accounts decree as a dollar amount or a percentage of the account balance as of a particular date. Valuation dates may be a matter affected by plan terms, which gets us to: (3) A common arrangement is for the domestic relations lawyer to have an association of sorts with a QDRO lawyer (or other professional), to make sure that the divorce decree defines the alternate payee’s interest in the plan in a way that can be implemented by the plan, such as by specifying a valuation date that is workable for the plan. The QDRO lawyer, then drafts a domestic relations order that meet the qualification requirements to become a QDRO. So, the answer to your question is: both, especially since there seems to be so much confusion about what matters or not, and people seem to be enmeshed in a probably unnecessary push/pull. I am not unmindful of the misfortune that something that is conceptually quite simple ends up needing the assistance of expensive professionals to make things “right” whether or not anyone is made happy. Important addendum: No mention has been made of an extremely important document that plans are required to have: written procedures on qualified domestic relations orders (QDRO Procedures). If I were to have only one document from the plan, that is the one that I would request. However, while that document should be the most important and informative of all plan documents, that document often sucks and will disappoint. The QDRO Procedures may be incorporated into an SPD.

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Greetings All! This is my first post, but I've been using Benefitslink since 2001--and I love it! I’ve worked in the retirement industry for over 25 years with 401(k) providers and a TPA firm that was later acquired by a recordkeeper. My experience includes onboarding, client account management, reconciling plan records, and handling 5500s and compliance testing. I understand the business from sales through servicing. I’m interested in starting a TPA at some point, and I want to know the actual steps to get started. For those who’ve done it, what does the beginning really look like and where should someone start? Thank you,

For decades OPM has required that when a Former Spouse submits a certified copy of a FERS Court Order Acceptable for Processing ("COAP") for approval, they must also submit a certified copy of the Judgment of Absolute Divorce ("JAD") and a copy of the Marital Settlement Agreement ("MSA") by whatever name it may be called, if there is one. I have a client pushing back on providing the MSA, even a redacted one, for privacy reasons. So I opened my CFR website and have spent HOURS looking for the regulation that required that the MSA be provided. I cannot find it. I contacted a few other COAP preparers that send in the MSA like me, but they don't know the source of that mandate, or any other Plan Administrators that want a certified copy of the JAD, let alone the MSA. Yes, I know that many Plans permit the transfer of pension and/or retirement benefits that are based on a "legal separation" where there is no JAD and will not be until the expiration of some period of time in the future (ex: South Carolina), so the Plan must base its decision on the MSA. But that's not my situation. Ideas? Thanks, David

I have a client with a solo 401(k) plan. Upon the recommendation of his CPA, he converted about $400,000 of pre-tax plan monies to Roth. The problem is that instead of moving the funds to a Roth account within the 401(k) Plan the funds were moved to a traditional IRA, then converted to a Roth IRA, where the funds currently are being held. The taxation for 2025 is correct and the funds are still invested. We explained to the client that this was an ineligible distribution and the funds need to be returned to the Plan, adjusted for earnings. When they reached out to the Custodian to request that they needed to "undo" it all, they stated that they can't move the Roth IRA funds to a Roth 401(k) account because Roth IRAs can only roll into Roth IRAs. Any suggestions or insight on how to get the Custodian to correct the error? Outside of "undoing" it, what corrective options do they have?

The question I am asking relates to the divorce of the plan administrator and their former spouse, this case takes place in Wisconsin. A brief overview of people involved: Person A: employee of company X, where they are not only the plan administrator but they are a partial owner (the other owners are family members as well) Person B: ex-spouse Lawyer A: Lawyer for Person A Fiduciary Divorced was finalized in May of 2021. In January of 2022, the QDRO was filed and signed off by the judge with a May 2021 valuation date (this is key point for later on). The QDRO was signed by Lawyer A, with a December 2022 date, however, court records show that they had withdrawn from the case in June of 2022. Does the dates above invalidate the QDRO? Since the signature date of Lawyer A doesn't make sense? As of August 2025 the QDRO was never executed and the assets in Person A's 401k were never split, Person A has been contributing to the plan since the divorce was finalized. In order to get things finished and complete the QDRO, person B asked for plan documents to understand what they were entitled to do with the money owed to them (like rollover, cash out etc) as they had not been given ANY documents prior to this. Person A supplied a SPD dated August 2021 and claimed that was enough information and that was all they had. Under Miscellaneous: Domestic Relations Orders - "You may obtain, without charge, a copy of the Plan's QDRO procedures from the Plan Administrator". If this document exists it hasn't been provided Person B spent weeks asking for more plan documents and then received a Adoption Agreement with the same effective date as the SPD (August 2021), Person A then stated again that they have provided everything they have and everything that Person B needs. Only relevant information in this is that the valuation date is "Each Business Day" More correspondence over another few weeks led to Person A sending Person B a Basic Plan Document and again stating that is all they had and is everything Person B needed. this document says copyright 2002-2020 through ftwilliam.com ISSUE: The QDRO filed, signed by Lawyer A and the judge has a valuation date that is 99 days prior to the Adoption Agreement passed in August 2021. During the correspondence outlined above, Person A, has suggested to the fiduciary and Person A that the valuation date should actually be a different day in May 2021. This new valuation date conveniently falls within 90 days prior to the Adoption Agreement in August 2021. Person A has repeatedly denied having any documents prior to the ones effective August 2021 and even asked the Fiduciary if they had any documents to try and avoid responsibility. The question then is. With the dates and timelines given, what, if any, legal actions can Person B take? Is an ERISA lawyer the best way to handle this? Or is another kind of lawyer that is versed in small/family business better?

My client created an LLC last year and purchased an existing nursing and rehab facility which employs about 40 people. There was no plan in place with the previous employer. Now they want to adopt a safe harbor 401k to benefit employees this year. Eligibility is one year of service (no credit for service with predecessor employer). Would this qualify as a 'new business' and thereby be exempt from auto enrollment for 3 years?

Can a safe harbor match be added to an existing discretionary profit sharing plan mid year (i.e., after January 1?)

Don't know of a cite but generally federal income tax withheld in one year can't be applied to a prior year's tax liability. For example, if an employer incorrectly withholding taxes in a prior year, they can't simply correct it in the current year. This IRS Chief Counsel Advice states that generally you can only fix if find the mistake in the same calendar year. http://irs.gov/pub/irs-wd/201727008.pdf

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Ascript is ASC's import utility that can import just about any data from txt, csv, xlxs. If you are working with a recordkeeper data file - it may be you can import using one of their pre-programmed routines. You can submit a sample file to their support team as well and get some guidance so you aren't spinning wheels.

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I've seen significant penalties for failure to file via IRS Letter 5699. I have not seen incorrect/late ACA reporting penalties via Notice 972CG. They might be happening, I just haven't seen them yet in the wild. 2026 Newfront ACA Employer Mandate & ACA Reporting Guide

I know the ACA "good faith" reporting relief ended in 2020, but I'm wondering if anyone knows it the IRS is actually assessing penalties for errors on a 1094-C or 1095-C filed after the relief ended?

Looking for guidance. We have a spin off plan effective 4/1/26 with the EACA mandate. The prior RK drafted the EACA to use the first day of the following Plan Year as the date of the first increase. New RK can only use the initial period - 2nd plan year. My question is how to administer for the employees auto enrolled in 2026. Can the new intial period be applied for any of the 2026 auto enrolled participants? 4/1, or could it be retro to employees hired on or after 1/1/26 as long as they get an upddated advanced notice letting them know the first increase will not occur until 1/1/28? I know the conservative approach is to apply the change 1/1/27 in the plan document. Thanks for your help!

I agree with C.B. Zeller. Is the issue the file type? Because ASC takes .txt files for import just fine. Is the issue how the data is in the file? What import function in ASC are you trying to use? there are a variety of ways to import things into ASC. For example, investment imports where ASC has pre-programmed to work with certain major recordkeeper files. And then there are ASCRIPT custom imports which are super easy to use as well once you know what you are doing. Plus wizards and such. If the issue is how the data is in the file, and you don't want to manually edit the file then a macro or code to do that as CB suggests. You can just open the txt file in Excel, and then save it as an excel file type if you really just want to change the file type.

I agree with @justanotheradmin and also note that it is the Plan Sponsor's obligation to make sure that the plan amendment to the plan document was properly worded and fully executed, including doing so in a timely manner relative to the effective date of the change.

ASC can natively import txt files. Is the file structured in any reasonable way? Have you tried using one of ASC's import wizards or their predefined importer specs, if one exists for the data source you're using? If you want to take the approach of using code to extract/transform data before loading it into ASC, then a chatbot could probably help you write the code. I'd recommend that you know enough Python (or whatever language) to be able to read and understand the bot's output before relying on it in production. People on the internet seem to like Claude for that kind of task these days, but I can't offer any personal experience.

I think the auditors are probably right. you need to look at the formula of the match - if it is on an annual basis - and everyone is to receive a uniform percentage of pay based on deferrals - which is typical - why would someone who enters 4/1 or later be excluded? discretionary does not mean it can start stop any time - it usually means they can choose to give it one year or not. If they give it for that plan year, it needs to follow the formula in the document. Which sounds like is based on annual compensation and annual deferrals. If you let us know specifically what the document says for the annual based match formula maybe people can give more insight. If the sponsor wanted the ability to contribute match for some paydates and not others, the formula for the match needed to specify a payroll period or paydate basis. Not Annual.

Plan provides for a discretionary match ( no safe harbor). Match funded payroll basis but is based on year end - so a true up may be required April 1, 2025 employer stopped the match - participants were notified the match would cease as of 4/1/2025. 1. TPA never amended the document to remove the plan year calculation so.... (i) the match for Jan 1 to March 31st would need to be calculated based on annual compensation - correct? (ii) Auditors doing the 5500 audit and stated the participants who entered after 4/1 need to get the match. According to them this is a discrimination issue - Here is where I am looking for some assistance. Discretionary means it can stop/change at any time. Participants who entered after 4/1 do not get a match - this would not be a benefits rights and feature issue - do you agree. ACP Testing would be for the full year, but those that entered after 4/1 are not included in the ACP Test - do you agree Thoughts

The topic you ask about is full enough that Derrin Watson wrote a whole treatise, and over 28 years has revised it. Who’s the Employer https://www.erisapedia.com/static/WTE.pdf. While it’s tempting to seek a shortcut, a plan’s sponsor, participating employer, or administrator wouldn’t know which organizations and businesses are in or out of “the employer” until checking everything. Consider limiting your scope to what affects the design and administration of the one retirement plan you work on. Consider warnings that your work must not be relied on about how discerning who’s-the-employer for the one plan you work on affects employee-benefits plans of other organizations and businesses an owner of your client owns, whether indirectly or even directly. This is not advice to anyone. If you need advice, consider Ferenczy Benefits Law Center.