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A law firm with one owner currently has a 401(k) with a service eligibility requirement of the next entry date following three months of service, with the entry dates being January 1 and July 1. The law firm will be bringing in two partners who have not been employed before by the law firm, but will become partners immediately. The firm is interested in allowing these two partners to participate in the 401(k) plan immediately, or at least the beginning of the calendar quarter following their employment. It would require a plan amendment and they don't want this change to apply to non partner employees. There is a chance that employees who had worked for the new partners in another law firm could also become employees in this existing law firm who would not be partners, so it opens up a can of worms. The 401(k) plan has no match, so other than administrative fees, there would be no downside to adding employees with a more liberal entry requirement. I would appreciate any comments on the advisability of this.

jpod, if you're looking to support the mainstream view you described, it is the last sentence on page 39 of EBSA's QDRO booklet, and EBSA's citations to support Q 3-8 are on page 40. https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/qdros.pdf Even if that view is wrong, I doubt the Internal Revenue Service would tax-disqualify a plan because the plan's administrator decided it must honor a QDRO that directs a distribution form that is not provided by the written plan but is, under the administrator's good-faith interpretation, required under ERISA 206(d)(3)(e)(i)(III).