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Did folks see this? I just found it so interesting and timely. What do people think? Anyone else intrigued? Hopefully more details will become available as the suit moves forward. Who approved the distributions? what was the process? was an online requests? How come they haven't provided a copy of the plan documents? How did the money go into accounts that weren't in her name? Wouldn't someone catch that? Why haven't they settled? So many interesting things. Distribution fraud is booming and a very real problem. https://www.napa-net.org/news-info/daily-news/recordkeeper-plan-sponsor-charged-401k-account-theft https://www.napa-net.org/sites/napa-net.org/files/BermanvEsteeLauderComplaint[1].pdf

The default is 10%. They can use a W4-P to elect out of withholding or ask for more. Our firm just puts the ability to do a withholding change on an RMD (or hardship) form we send that explains the RMD (hardship). We make it clear that the "r" stands for required so they will get a check even if they do nothing. My point is I have seen a number of firms just use the form as a substitute for the W4-P and never seen it be an issue. If pressed for time we have told plans to send the RMD and withhold 10%. Since people are used to the 20% rule it is rare the get an objection even if it is for the wrong reason. Sorry, I got a little confused and started to write RMD a lot when the person asked about hardships which is the same basic answer. I didn't intend to cause confusion. I guess I am still recovering from 5500 due date.

Anyone: Please tell me why a QACA - any QACA - does not automatically comply with the requirements for being a EACA. Disregard cosmetic issues like the EACA provisions call for a "EACA notice" and the QACA provisions call for a "QACA" notice. Yes, I know that only a EACA can have a refund feature, but tell me why a QACA fails to qualify for having a refund feature. If you cannot, then separate notices would end up saying the same thing, regardless of their name, so why not have one combined notice? It's true, escalation must start no lower than 3% for a QACA (if there is escalation), but that doesn't violate the EACA rules. Ditto the 10% maximum on escalated deferrals - that doesn't violate the EACA rules. The boilerplate regulatory uniformity requirements look the same to me for both a EACA and a QACA. The character of the automatic contributions as "safe harbor" contributions, and the minimum amount of such contributions for a QACA, all those things do not violate the EACA requirements. A QACA safe harbor notice will comply with the EACA notice rules, unless you can point out to me where I err. (None of this applies if the plan has a "maybe" QACA, which is not a QACA until the midyear amendment amends the plan into a definite QACA. My question deals with a plan that has a QACA on the first and every remining day of the plan year.) As you might have guessed, I think that the "pairing" of "EACA and QACA" is to make drafters comfortable with having a refund feature, but that such pairing is not technically necessary. But I am open to the possibility that I am overlooking something.

Mandatory 20% withholding is only applicable to "eligible rollover distributions." A hardship withdrawal is not an eligible rollover distribution.

That's a good point. Not so much that it would specifically discuss audit fees, but the question is whether it says anything at all about general "administrative" fees, which might indicate (by omission) that this can't be done at all.

Worked like a charm! Thanks!

The regulations are explicit that an HCE's excess contributions are included in the ADP test. See 1.401(k)-2(a)(4)(iii)

In my experience, a fiduciary might balance a retirement plan’s needs and interests in not “wiping out” low-balance participants while also not burdening high-balance participants more than is prudent. One way to do so is to allocate a portion of an expense on a by-accounts method and another portion on a by-balances method. What’s “fair” and prudent turns on the particular facts and circumstances. And a fiduciary must evaluate her decision considering only the retirement plan’s exclusive purpose, not her self-interest.

The ADP test includes 402(g) excesses for HCEs. So, you will calculate the amount of his refund including the entire 402(g) excess. Any additional excess that remains in his account after the ADP refund is distributed is irrelevant, since 402(g) excess can not be corrected after 4/15.

If they have the right to direct investments, then I think they should be receiving quarterly notices.

What about the quarterly notice informing participants of their right to direct investments? edit: We call it the "PPA Notice" around our office but I feel like that name is pretty outdated at this point. What does everyone else call it? "ERISA 105(a)(1)(A)(i) Notice" doesn't have the same ring to it.