Leaderboard

You have not provide enough information to convince me that the original distribution was in error. "Error" means "not in accordance with the QDRO or not in accordance with plan terms," not "not in accordance with an unexpressed or poorly expressed intention of the alternate payee." If the reason for the proposed "correction" is that the original intent was not achieved, there is nothing the plan should do unless what the plan did was wrong, such as use the November date when the order said the February date. If this is not the plan's error, the plan should not try to get involved in the solution to a problem that is not the plan's problem. This is akin to someone requesting an in-service distribution and then 100 days later deciding that the amount they asked for was more than they wanted. Tough cookies. Are you now questioning your interpretation of the order? Stick with it unless the interpretation was unreasonable. The plan's QDRO procedures should have default provisions that apply (such as earnings and losses will accrue from the effective date of the division unless the order specifies a different date or diffrent terms for earnings and loses) and the plan should include in its notice of qualification the basics of how the order will be implemented (in this case: earnings and losses will accrue from November 2010 until distribution) and wait for a time (30-60 days is typical) before acting. There are decent solutions to this if the AP rolled over enough to an IRA, but they do not involve the plan and I am not going to venture them because the plan has no business even proposing a solution that does not involve the plan.

who doesn't?

At the 2012 ASPPA Conference Q and A 37 : (reminder such responses don't necessarily reflect actual Treasury guidance, but at least it is something to fall back on) A safe harbor 401(k) plan covers only salaried employees of Company X. The plan passes the ratio test under IRC §410(b). The plan year ends December 31. In June, X decides it would like to open up the 401(k) plan to the hourly paid employees, effective on July 1. Would this amendment be a violation of IRC §401(k)(12)? Proposed response No. Although certain amendments to a safe harbor 401(k) plan are not permitted to be made effective on a date other than the first day of the plan year, this is not one of those types of amendments. The amendment solely applies to employees who are not otherwise covered by the plan. The safe harbor rules simply treats these individuals as newly eligible, and the safe harbor notice provided prior to the beginning of the plan year would not have had to be distributed to these employees before July 1. IRS Response The IRS agrees with the proposed answer as long as there is no effect on the already-eligible employees.

I wish I had seen this earlier. Pershing (www.pershing.com) has a prototype. It is available through any of the hundreds of hundreds of broker-dealers that uses their custodial services. I would bet that if someone calls five local broker-dealers, at least one on the list uses Pershing.