Leaderboard

I'd ask the same Q as 401king, although I can hazard a guess at the answer - your "service provider" (using the term loosely) is probably a large payroll company or other impersonal outfit. Your commentary "After many phone calls and emails...All of this was done without our knowledge. We were not aware they had a cash balance with funds we submitted." is telling. And you figure that trying to get them to actually do anything is about as helpful as poking yourself in the eye with a sharp stick, right? Ultimately, you need to work with them to fix it - it is really on them, although no doubt there was a message waiting on the website for you to read so they will blame you. Ultimately, the answer to your questions is that you need to open or re-open accounts for them and deposit the money to those accounts. It raises questions about timely deposits but that's a different matter.

I don't have your answer - But why is it that your provider cannot correct this for you if it is, in fact, their mistake?

In my experience the investment provider has known that the investor is a qualified account so I've not had to deal with that, but good to know!

Of course she can charge him for paying by check, in the sense she can offer him a smaller amount by check outside of the 403(b) in exchange for him agreeing to have the court void the QDRO. This may be the best alternative for both parties. The check she writes him would be considered part of the property settlement (and thus not taxable to him), so he could end up with as much money after taxes even if the check is less. Meanwhile, by writing a check, she increases the amount she will ultimately get from the 403(b) by more than the amount of the check (because he will no longer get anything from the 403(b)), without it being treated as a contribution to the 403(b) subject to the usual maximum limits. Yes, they should have thought of all this before entering into the QDRO. But if both parties are willing to amend the QDRO, better late than never (unless the costs associated with amending the QDRO are so high as to make the whole thing uneconomic).

Happy holidays or extended weekend or whatever you celebrate. Enjoy!

Yes you can use a third party (or should that be fourth if you are the third party?) for withholding, 1099's, etc. We do it in house. Announcement 84-40 provides that a retirement plan trust should (but is not required to) use a separate TIN.

David isn't referring to an IRS audit but the fact even a plan with fewer then 100 participants can need an audit any more if its assets are the wrong kind of assets. https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/faq_auditwaiver.pdf

Well, of course you already know that the participant count is the most visible, but not the only, parameter to determine whether an audit is required.

In this line of work, it's always a good idea to know where the lines are drawn. If you are currently a small plan filer AND you do not have MORE THAN 120 participants covered on day one, then you may still file on a small plan (and, therefore, have no audit). Good Luck!

"It depends on what the court order said." Caution: from the plan's viewpoint, it depends on what the QDRO says, not the divorce decree and/or property settlement agreement.