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If you read the rehire provisions of the plan document they don't make any reference to the effective date of the plan. They simply say if this person is rehired after working 12 mo and having a 1,000 hours they re-enter upon rehire. If so, they enter upon rehire. I believe that reflects the general rule of the law. You can't disregard service prior to the effective date of the plan for entry. Check the plan document very carefully. I am convinced it will answer your question.

Most of our clients use our documents and we use DocuSign for signatures - which provides no opportunity to backdate the time of signature. If a client can't or won't use DocuSign, we accept printed, wet-signed documents, but won't accept anything obviously backdated. We do have clients using individually drafted documents - but in those cases, their attorney is the drafter, and handles amendments - and we operate in the mode of a nondiscretionary, directed, ministerial service provider and accept what is given to us (although we may question certain things. Our biggest problem is for takeover business, where we notice a missing amendment or other documents, and we direct them to their prior service provider to fix - and miraculously, they appear (apparently found behind a filing cabinet somewhere). Again, unless it clearly has a "prepared" date somewhere with a signature date that predates the date it was prepared, it'll be accepted (see no evil, hear no evil...)

Well the deferral limit for 2021 is $19,500 with $6,500 catchup. So 2021 has a $26,000 limit. The employer contributions don't count against that limit. This thread has me a little concerned.

Happened to walk by my old DC-2 study guide and saw those words flip by and wondered if I remembered what it meant. Luckily yes. Anyone got any favorite no-longer-rules they miss? 415(e) perhaps?

Well it's funny you say that because it occurred to me separately that they are actually going to be going through a conversion later this year and we should be able to double up with the notices for that. Thanks BG!

I think a change in control of the assets of the trust is kind of a big deal.

Yes, I would.

While the advice here is good (we'd reject for the reasons stated), my guess is that this wasn't lazy, but rather intentional on the part of the participant's attorney - who is waiting for "Mr. Green" to arrive. In other words, the participant needs to pay their lawyer and the only pool of money may be the plan.....

That 1996 statute (amended in 2006) is 4 United States Code § 114. http://uscode.house.gov/view.xhtml?req=(title:4%20section:114%20edition:prelim)%20OR%20(granuleid:USC-prelim-title4-section114)&f=treesort&edition=prelim&num=0&jumpTo=true

In 1996, a federal law was enacted that basically stated that only your state of residence at the time of your retirement plan distribution can tax that distribution; as a result, the state where you previously worked while accruing your benefits or contributions could not tax them. (There is an exception for certain nonqualified plans that are neither excess benefit plans nor are paid out over life.) Prior to enactment, there had been much litigation. There is still occasional litigation, but that usually concerns whether the recipient actually changed residence.

I understand. My point would have been, if the amendment is eligible to be effective retroactively, then just do a new amendment with a retro effective date and sign currently and just trash the old one.

The right to direct the investment of your account is a benefit, right or feature that has to be available to all participants on a non-discriminatory basis. Even if they split the plan into 3, the two owners' plans would not satisfy coverage testing on their own, so they would have to be aggregated with the plan covering the employees for nondiscrimination testing purposes. If the effect of the change would be that each of the owners would have the ability to direct the investments of their own accounts, but that option would not be available to their employees, then that would be discriminatory.

I would want to see all the documents, but I will take a different approach for the sake of argument. I don't know what the "DRO" says, but it appears to carry most of the formalities of section 414(p). The MSA (which is also a "domestic relations order") has the juice, which is the substantive terms of assignment of benefits. The MSA has a bunch of other stuff, too. When a "DRO," that by itself does not want to be a QDRO, is incorporated by reference, but has an essential ingredient for qualification, the plan administrator should identify what is the subject of the qualification and what is not (i.e. disregarded). Many courts have moved toward a simple checklist approach to qualification. If the right stuff is there (and no wrong stuff that that offends the plan design), then the plan has a QDRO. I don't see the provision for the alternate payee to give the participant funds from "the marital portion of Participant's retirement account" as wrong stuff. I look at that provision of the MSA as other MSA stuff like "sell the house, divide the proceeds, and then the husband gets an additional $XX from the wife's portion of the house proceeds." The plan pays no attention to the incorporated provisions that are other MSA stuff that have nothing to do with the assignment of retirement benefits, i.e. the 50% of the marital portion. The plan does not enforce the provisions that are not essential parts of the QDRO, Whether or not the AP asks for a distribution and forks $$ over in compliance with the MSA is a matter for the state court. The plan should be very clear about what the QDRO is, and what is disregarded, and that the plan will not require the AP to take a distribution, and that the plan will pay all proceeds of distribution to the AP. This approach gets the job done at the least cost to the plan and the parties. The bad drafting upsets me, too. I also don't like something that veers close to an unpermitted assignment of part of the AP's benefit, but I think if the plan is not involved with the AP disposition of funds, the plan is not implicated. Also, we just have to get over the sham divorce aspects of "liberating" retirement funds for the participant. That has been settled and is part of the trend to focus on the qualification checklist and the rest of reality (and the domestic relations implications) be damned. I opt for practicality. If a particular lawyer is responsible for this and repeats the crappy drafting for other clients affected by the plan, then I opt for discipline and making for a clean order by denying qualification.