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I agree that she was an employee in 2015 and eligibility service starts from her initial employment. If they have excluded her as a non-resident alien, they have been improperly excluding her from the plan. The statutory exclusion is for non-resident aliens with no US source income, so it doesn't apply.

I know there have been debates back and forth on here in the past about whether it is needed or not (with more leaning on not sending). The question of whether "to each participant of such plan" means a participant at any time during the year or only at the EOY (or upon plan termination). We generate and send to employer to distribute, but I know the question will then be who does the employer send it to since there are no participants. I think the one thing that is universally agreed upon is the pointless nature of the SAR.

Yes, learn the rules for QDROs, at IRC 414(p). The rules state what a plan must do when a domestic relation order is received. "Domestic relations order" is also defined, and I doubt that your "sample QDRO" fits the definition, but I am speculating because "sample QDRO" has no universal meaning and your post has no description of the procedural status. Unless the plan is ill-advised enough to have QDRO procedures with unnecessarily-added rules about what to do when it receives evidence that a domestic relations order may received, the plan should do business as usual until a domestic relations order is received. If the business includes termination and liquidation, then that should proceed without regard for the "sample QDRO."

Hmmmm.... here is the original posting: Situation is this.... An employee who is a participant in the plan (SH Match 401(k) ) simply doesn't want to play anymore. He wants to take his money and invest it somewhere else... away from the plan. There is not a distributable event... not 59-1/2... not disabled... nothing. The employee is out of luck... correct? Money has to stay put. Just pointing out that there is nothing in that question that remotely suggests rollover money is involved. MOST documents (mine too!) allow distribution of money that rolled in; your comment, while true, just didn't relate to the original posting. You were answering a question not asked, and thus my comment. Does that help?

We had this come up a couple of times recently in 401(k) plans. The employees who were fired for using someone else's SSN were completely unresponsive to attempts to contact them about their distributions. Both had less than $5,000 vested balances. The auto rollover provider for the plans, Millennium Trust, said they can not accept funds for someone without a correct SSN. The plans also contain a provision that forfeits the balances of missing participants who are due an involuntary distribution. Normally, the auto-rollover provisions would apply before the missing participant provision. But, with an auto-rollover being impossible, the missing participant provision applied. Both participants' balances were forfeited. If they show up to claim their benefits and can prove they were the person who earned the benefits, the forfeited balance will be reinstated. The plans also have a provision that if the missing participant has not been located by the time the plan terminates, the forfeiture becomes irrevocable. If your document has a similar provision, it may help you resolve the situation. If nothing else, it may convince the PBGC to make it their problem. Good luck.

Mike, thank you for the quick response. The plan document specifically says to use entry date compensation for determining the gateway. If we treat A as having a zero allocation, doesn't that create a gateway testing issue? That's what the system is doing and it says we fail gateway because a benefiting NHCE receives a zero allocation. We tried giving A entry date comp of $3,600 so that her allocation rate would be 5% like most of the NHCEs. She is about the same age as the owners, so my hope was that she would not be in any of the rate groups. But, she ended up being in 2 of the 9 rate groups. We had several rate groups that were barely failing until we increased contributions to an NHCE, so I'm thinking excluding her may make it easier for those rate groups to pass. It seemed a bit unreasonable to exclude her if it looked like it would help the testing.

Mike, I agree. I think A is getting more than the gateway, but how do you treat A for a4? We are testing using entry date comp and for Participant A, it's zero. An infinite allocation rate, while mathematically correct, doesn't seem like the right way to test.