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We use the pay date. We have a DOL audit of one of our plans require that, so we just stuck with it.

I will research further, but if one person is reimbursed $3000 because he's been there longer and has a higher account balance than the person that is reimbursed $100 I believe it causes discrimination issues. These are self-directed brokerage accounts so it's easily determinable how much was provided for each person. Bottom line is, fees paid by the employer should be paid directly and not pass through the trust so as to not cause such issues. I remember in the late 90's we were told this and there was precedent where the fee reimbursement was reclassified as a contribution on audit - just will require more research.

I'm having trouble understanding what the problem is. This is an EX employee who is bugging her former company? Fine; she calls and says "I got the check instead of it being sent directly to Great West". Assuming the check is made out to Great West, the answer from the former employer is (and only once): "Oops! Sorry. They sent it to you by mistake, so now you should send it to Great West. Nothing we can do about it but it's not a tax problem because the check is made out to Great West and will be reported as a rollover. Have a nice life!" If she calls again berating the HR department; the answer this time is: "Still sorry; we told you what to do. Do it or not, but now it's in your hands to make it happen. Don't call again."

If you are making a required payment under the terms of the plan and do not need participant consent to do so, make the payment, withhold the taxes and inform the recipient that (s)he has received a taxable distribution in accordance with the terms of the plan, it will be (has been) reported to the IRS as a taxable distribution and failure to endorse the check will not change or delay the timing of this taxable event. In other words, put the fear of God - er, IRS - in them!

That is spot-on Madison. Agreed. The key here is that the employer must maintain complete and accurate records and has good internal controls. Lack of controls and records almost certainly guarantees most favorable resolution for the employee.

A client received an IRS "compliance check" notice a few years ago indicating the participant count change from the beginning of the year to the end of the year on the Form 5500 indicated a partial termination may have occurred. The IRS letter invited the client to explain why there were terminated participants who were not fully vested at year end. A response letter was written to indicate a large majority of these terminated participants were actually let go for cause (attendance, in jail, failed drug test, etc.) which is why a partial termination should not be imposed on the plan. The reason for termination of each participant was in fact documented in every single personnel file and was pulled from storage by HR to determine this information. The IRS agreed in this case and no further action was required (meaning no partial termination was found to occur that year and no one fully vested due to termination). Interestingly enough, there was in fact an employer initiated layoff that year but nowhere near the 20% threshhold required to fully vest in a partial termination. Just wanted to mention that the IRS has been known to take a reasonable stance if there is back up for termination for cause, even if employer initiated.

Luke - I believe your understanding to be correct. I filed under a VCP some years back on this very issue where there was a series of employee reductions over several years resulting in a partial termination. We broke out those that were employer-initiated to come up with the percentage. It was above 20%. We then fully vested only those affected participants. The IRS disagreed and said we needed to fully vest both those that were voluntarily and involuntarily terminated over this time period. I believe I even found and provided informal IRS guidance stating that we only had to vest those that were involuntarily terminated. One of their arguments was that when you have large scale reductions it’s difficult to determine those that were voluntary as they may have been taking preemptive action for what they believed to be the inevitable termination. That was my experience.

And that is only the beginning of the questions. If you are asking about plans, plans are only interested in the terms of the QDRO. What are the terms? Payment to an alternate payee until remarriage is a very unusual term, and the terms of the QDRO should specify how the plan is to be notified about remarriage. No sane plan administrator is going to take responsibility for monitoring status or evaluating veracity.

Hancock is one of the easiest to work with for sure, and they wont nickel and dime you to death like some other platforms. They have some quirks in the system but so do all the others.

I'll merely say this - I'm not judging anything without knowing all the facts, etc. - and one tiny detail can turn everything on its head. We work with a lot of recordkeeping platforms, and we find Hancock to be excellent, and far better than many others who shall remain nameless.

FWIW, and I don't claim expertise on this, but I think it is worth noting that Revenue Ruling 86-142 was for a DB plan. I think the scenario is different for a DC plan. I think the RR is saying that the payments for expenses are indeed deductible, but they are contributions. In a DB situation, that's sort of a "who cares" as long as you're not bumping against limits. In a DC scenario, if they are contributions, then they have to be allocated. Can't say I read every word so I might be off base but that's how I see it. Prior threads indicate they are contributions, but there are no cites that I know of.

Exactly. One has to look at the definition of hardship. Availability of credit is a financial resource. That is why we have recurring discussions about exhausting availability of plan loans before hitting hardship withdrawal.