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Under what circumstances was the previous 401(k) Plan terminated? As a general rule, my understanding is that the successor plan rules apply to all companies sponsoring a 401(k) plan. I haven't seen anything that would except a single employer plan, but I could be wrong.

This is a very creative contract, even for baseball. It is designed to allow the player to walk away after each season, avoid some luxury tax for going over the soft cap, and defer some salary payments if the player opts out (probably partly for cashflow reasons) It goes like this: Player signs contract prior to 2021 season, and receives a $10 million in signing bonus payable in 2 installments (3/1 & 7/1) Players salary is $28 Million for 2021, and $32 million for each of the final 2 years of the contract Players salary for 2021 is payable on 11/1/2021 (after the end of the 2021 season) If player opts out of the 2022-2023 seasons in the contract, $20 million out of the $28 million salary will be payed out in annual $2 million installments from 2031-2040. So if player opts out, he is payed on 11/1/2021: $8 million salary and a $2 million buyout, with the remaining salary paid out during 2031-2040. The contract binds the team to the $2 million buyout if exercised, but defers the majority of the salary interest free. If player opts out after 2022, he would receive his $32 million 2022 salary and a $15 million buyout. While this sounds like a bad deal for the team, it really isn't (in baseball salary terms at least). It is basically two year contract with a player option for just one year or three years, but in reverse 😎 The team pays the most per year if it is 2 years, due to the $15 million buyout after the second year, but the player can elect to stay for the third year, dropping the per year salary for staying the extra year. The team is also "protected" if the player bails after the first year, since they get the interest free salary deferment. I hope that clears it up a little bit more

While the QDRO fiduciary's lawyer appears particularly dispicable, union plans in particular are really terrible at complying with the law, out of either incompetence or misplaced knee-jerk support of the union member. However, I doubt that there is anything you can do formally because you did such a good job of lawyering that you avoided an outcome that was a breach of fiduicary duty. Had you been unsuccessful at persuasion and forced to pursue the claims procedure, or other path, to court, you could have made the fiduciary suffer fees and costs, as you pointed out. With respect to the lawyer, since he or she was dealing with another lawyer (you), I doubt that any sanction is available under the applicable code of legal ethics. The lawyer was zealously advocating for the (misguided) client. And that lawyer can say to you, with impunity, whatever the lawyer chooses. Your success is your worst enemy with respect to your desire for discipline. And the DOL doesn't care becuase the DOL doesn't understand QDROs (but I am glad you could put the DOL's marginal materials to good use), but more importantly the DOL is too busy dealing with achieved breach of fiduciary duty to trifle with a failed attempt. So you are left with informal measures, such as public shaming, which are inadequate if only for lack of a forum that has a relevant audience. I am not aware of a website that has a ratings or a bashing platform that would reach a QDRO audience. I note that you did not name names here. And what would you say? XYZ Lawyer is either an ignoramus or a knave, but can ultimately be defeated by a persistent super competent professional? Or maybe you could punch him/her out in a back alley, which is what I felt like doing a lot before I switched career paths and left litigation, much to my integrity, inner peace, and possible longevity (as yet undetermined). Too much skullduggery is tolerated, or at leat not punished, under this "zealous advocacy" BS. My dig at the DOL was not properly formulated in context or properly focused, but I am going to leave it anyway, because one should never pass up an opportunity to point out the DOL's shortcomings with respect to QDROs.

If it isn't a contribution, what could it possibly be?

And make sure you get paid in advance!

I wouldn't be comfortable paying any benefits other than by check unless the participant consented. I think the best way to do this is the way someone mentioned: Hey, pal, you already paid taxes, or you will if you did not include that 1099-R in your tax return. So you might as well cash the stinkin' thing.

QDROphile, I agree with you. I had not paid sufficient attention to the part of the question regarding the fact that B was participating in a multiple employer plan, so the notion that it was spinning off assets before terminating had me confused I think. Regarding the initial question, kmhaab, and just expanding a little on QDROphile's other point, the IRS has special rules in EPCRS that make it easier for acquirers who decide to merge target company qualified plans, typically 401(k), into their own plans, and who later find qualification errors, to correct those errors. Additionally, the acquisition agreement may of course contain reps and warranties from the seller to the acquiror regarding the plan's compliance, backed by indemnification provisions, which would allow the buyer to seek reimbursement from the seller of the costs of correction if problems surface post-deal. Having said that, it's always easier and typically safer (for the acquirer) to have the seller terminate its plan pre-close, as QDROphile points out is often done, so for the acquirer to want to take the seller's plan and merge it into its plan requires some motivation other than simplicity and risk avoidance. Those motivations may include adding the target's plan to the combined plan's asset base to get lower fees from vendors, avoiding disruption to the target employees, including issues with loans, and avoiding acceleration of vesting for the target employees.

OK if its a CP-283 Notice its an assessed penalty rather than a proposed penalty and DFVCP is no longer an option (at least for the IRS). I believe you can still seek penalty abatement for reasonable cause, so that would be the first thing I would try before paying a $15,000 penalty. One thing is bothering me though. The IRS penalty is $25 per day with a cap at $15,000. If the form was actually filed 2 weeks late, the penalty should not be the maximum $15,000. Even if it was a year late, it shouldn't get to $15,000. Something isn't adding up, or I haven't had enough coffee today...

The way I would approach this is to simply inform the participant that the money is no longer in the plan (and therefore not invested), the distribution is taxable and has been reported to the IRS (so that if his tax return does not reflect it, he risks the IRS crawling up his ...), and if he doesn't cash the checks (which are no long plan assets), he risks them being escheated to the state - which causes him to risk losing the money (depending on the unclaimed funds statute in the state he resides in). Bottom line, it's not the plan or the employers problem once the check is properly issued and delivered. And by the way, if this were my employee (and an HCE to boot) I would question why I had someone making a boat load of money on my payroll who is so STUPID.