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There was a similar situation at my last job, except the participant was already in pay. The participant talked to a coworker about getting a new QDRO to terminate the prior QDRO (shared payment order, would have been simple), but she pointed out to him that if things didn't work out with the reconciliation, they would have to do a new order all over again, and it might just be easier to leave it alone. They were both getting their checks, they could deposit them into the same account if they wanted, etc. Turned out to be a good move - the reconciliation didn't work out, and the participant later thanked my coworker.

How do you sign up for "Catch-up contributions only"? You can't make catch-up contributions until you have hit some applicable limit, either plan imposed or IRS imposed.

Tom, keep in mind that the OP said the owner got a W-2. So it's either a C or S corp and I don't think any of the self employed info would come into play. Right??

Pretty sure 401King said the same thing. A salary deferral election must be made prior to earning the compensation. That's likely in the plan document.

I would call the IRS and ask why the 'P' is there.

From what I recall, he must have had the written election on/by 12/31/2015. Cannot elect to defer after-the-fact. If he had a written election and mistakenly did not withhold then that would be a different story.

This is a plan termination. Surely nobody with a benefit worth less than $5,000 was given the choice of having an annuity purchased!!! Upping the involuntary cashout limit from $1,000 to $5,000 in connection with the plan termination (or any other circumstances) violates no anti-cutback rule. Further, every plan with a $1,000 involuntary cashout limit that I have ever seen explicitly stated that if the benefit is worth less than $5,000, it can only be paid as a lump sum (even if it could not be immediately forced out).

there is (or at least used to be) at least one investment house that has a deferral source and a catch-up source, for whatever reason, so possibly that is the reason there is a classification of 'catch-up' contributions, even though it makes no sense, because, as noted above, you don't have a catch-up until you hit a limit. but maybe that is what is going on. ugh, always hated getting a takeover case from that investment house, just the extra work involved, especially if they had loans taken from the sources. always glad to switch the investment house at that point.

If the Plan is matching on a per payroll basis, probably best to fix it now and going forward. Sounds like it is an administrative system that needs some updating.

^ and the taxpayer can claim the $6,000 over 402(g) as a "catch-up", but neither plan is affected. So, the only concern for this plan (or the other one) is if the participant contributed more than $24,000 combined. And if it's split up between two or more plans, it's up to the participant to notify one or more of the plan administrators of his error.

If a person over age 50 puts 12K in one employer plan and 12K in another unrelated employer plan then the both plans would put the full 12K in each ADP test. As far as they are concerned he hasn't hit any applicable limit, assuming the plan doesn't impose some limit below the $12K in my example.

Unusual but don't see where it would be discriminatory. I have seen plans that limit hardships to no more than 1 per calendar year but never seen one that puts a life time cap on it. I would think the biggest issue might be tracking such a cap, especially over time if the plan moves through multiple record keepers and you could easily inadvertantly fail to follow the terms of the plan by accidentially granting a 3rd hardship.

jpod: The one thing I am certain about when it comes to domestic relations law is that the parties defy logic or rationality in what they do, and how the "divorce" progresses....