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Thank you to everyone for the useful and informative information you have provided on these boards. I have learned much more than I expected to when I signed up. And thanks to Dave and Lois. Today is my last day as an employee (and plan administrator). I'll be looking in from time to time, because there are some interesting subjects to be discussed and questioned in the coming years, and because so many of the posters on this board provide informed, accurate answers. Thanks again. GMK ... out.

Is your concern issuing a 1099 for a non participant? That isn't a problem, you are simply reporting who had income from the plan and how much was taxable.

I'm sure everyone else shares my deep gratitude for all of the contributions you've made to this community and hence to the whole industry! Let us know if there is life after benefits. One reads about such experiences, but whether it's just euphoria in the brain, we don't yet know for sure.

Sorry to see you go, GMK. Enjoy life and come back every once in a while with an update if you feel like it.

+1 ESOP Guy. The presumed solution every time has been more notices and more rules. Frankly most people aren't that interested in reading all that stuff, let alone understanding it. I attended employee meetings with a few clients where a big package of 404a5 stuff was distributed. Most of it was found in the trash can by the door after the meeting. I've sat in 401(k) plan sales meetings where a veritable tome of contract and disclosure documents is presented to the client, they flip to the back page and sign. Why? They trust the people they are dealing with. Is this trust misplaced? Certainly in some cases it is, in many cases it is not. Should financial advisers work in the best interests of their clients? Absolutely. Should rules purporting to ensure they do so be so complex and costly that advisers cannot afford to service clients with modest accounts? No. Complicated rules drive cost into the system at every level, these costs are ultimately borne by the participants, reducing their ultimate retirement benefits. And it's particularly ironic to have DOL and politicians ranting and raving about excessive costs and then "solve" the problem by raising costs of running a plan. Both hard costs and risk. I don't know the "right" answer, but I keep thinking there has to be a better, simpler principles-based approach. Will this delay and review really change the approach? Not holding my breath. As ESOP Guy says: " The government is terrible at making rules that balance cost/benefit."

A further thought: In some of the situations I mentioned, there was a concern that allowing early distributions would deplete the plan's assets so much that the plan would become unable to pay for necessary services, including an independent qualified public accountant's reports the Labor department insisted on. In one of those situations, the administrator balanced the concerns by allowing partial distributions, but leaving reserves to meet anticipated payments to service providers. These situations can be fact-sensitive.

ETA, your concern is why the group's consensus was only that a fiduciary might consider how an earlier distribution affects the allocation of the plan's expenses. Your allusion to the blackout rule is interesting. In one of the situations I remember, the plan's administrator decided, without any lawyer's advice, to send a blackout notice, explaining that the plan would delay distributions until the wind-up administration was completed. That administrator also treated a participant's complaint about not getting a distribution before the final distribution as a request to review a denied claim, and followed the plan's ERISA section 503 claims procedure. Returning to AlbanyConsultant's query, might the differences in how the plan's expenses would be allocated among participants' accounts be small enough that the claimed in-service distribution would not significantly harm other participants?