Leaderboard

I would pretend that I didn't notice it. Seriously. We go to great lengths to do things right the first time, but stuff happens, and in this case, fixing it involves a chain reaction of corrections that is, shall we say, unpleasant, and the error is trivial, IMO. If "caught" on audit I'd say "huh, I guess we messed that up" and I doubt there would be any consequences.

We use the ASC document and the Loan Policy has language in it that gives the Plan Administrator the discretion to deny a loan if a participant is not credit worthy. But if your document does not have this language, then the loan should probably be approved. Here is the language from our loan policy: The Plan Administrator may refuse to make a loan to any Participant who is determined to be not creditworthy. For this purpose, a Participant is not creditworthy if, based on the facts and circumstances, it is reasonable to believe that the Participant will not repay the loan.

There is something in the dim recesses of memory that says that bankruptcy law does not allow for additional extensions of credit during bankruptcy without the bankruptcy court's permission. I believe this applies to all kinds of loans including those from 401(k) plans. Your client is best off discussing the matter with legal counsel.

Those CPAs and their sticklers for numbers! (This is coming from a CPA by the way.)

I don't have experience but I'd take the position that they are excess IRA contributions...(thinking out loud)...no wait, you could roll money into a SEP-IRA but I don't think you could make "regular" IRA contributions to one so it doesn't seem to be a valid premise. I'll go with your second option, but it's not based on anything other than looking at what you presented.

Sounds like it would violate BRF in a non-safe harbor plan. Sounds like it would completely blow up in in a SH plan as the rate of matching contributions increases at 4% from 0% to something larger than 4% since deferral rates of 0.01 - 3.99 are not allowed.

You probably saw this but per the EOB. A 4% minimum would, in my mind, not follow the guidance. Minimum deferral rate and minimum increments permitted. Q&A-3 of IRS Notice 2000-3 permits safe harbor 401k plans to require salary reduction elections to be in whole dollar amounts or in whole percentages of compensation. Section V.B.1.c.ii. of IRS Notice 98-52 stated that a safe harbor 401(k) plan could set a maximum limit on elective deferrals, so long as an employee's ability to get the maximum match available under the plan was not compromised, but had to permit the employee to elect to contribute "any lesser amount." The ability to require whole dollar amounts or whole percentages is a reasonable compromise. Thus, a minimum elective deferral rate of 1% of compensation could be required by a safe harbor 401(k) plan. The regulations adopt the Notice 2000-3 approach as well. See Treas. Reg. §§1.401(k)-3(c)(6)(iii) and 1.401(m)-3(d)(6)(iii).

You are still entitled to your share, since there seems to be a new employer and a new plan, you may need a new QDRO. You delay of over 20 years is the source of your problems. I cannot imagine why the Plan did not make an immediate rollover to you in 2003 when they received the Order. Here is a link to you rights as a former spouse under CalPers. https://www.calpers.ca.gov/docs/forms-publications/community-property.pdf I doubt that anyone will be able to determine gains and losses and investment experience from 11/9/97 to date. DSG