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Totally agree with everyone above that to reach any real conclusion, a full review of the documents would be required. However: *Unless they resigned or were removed by the employer, the two individuals in question are probably still the trustees. * You should identify who is the plan "administrator" or "administrator" under the document. This person is usually the company itself, but could be a "committee," but this person or body under most plan documents would have greater authority to approve a distribution than the trustees. Unless the plan administrator is the two individuals who are trustees, I would see approval for the distributions from the plan administrator. * I would also identify who under the plan document has the authority to remove and appoint trustees. Almost certainly it is the company, e.g. if a corporation the board, if a partnership the Managing Partner or Management Committee. I would inform that person or body that they should consider that two departed individual who are seeking distributions are the plan's trustees and that they should consider appointing new trustees. * If you do bullets two and three above simultaneously, you may find out pretty quickly whether, aside from legal issues, making the distributions will be controversial. * Most likely as the TPA you are not required to take any controversial actions. * Remember, distributions generally must be made "as soon as administratively feasible." The circumstances you describe should impact the timeframe of administrative feasibility here.

There is a life expectancy rule, a 5-year rule, and a 10-year rule. Which of these applies will depend on who the beneficiary is, and what provisions are in the plan document. Read the plan document and see if it answers your questions.

I don’t trash the DOL because the publications don’t have the force of law, I trash the DOL because the DOL is wrong about the law. I also trash the DOL because it did not give us any useful law or guidance on post-death QDROs when Congress instructed it to do so.

You can spin off a plan - that is, split a plan into two or more pieces, regardless of any changes or lack thereof to the sponsoring employer. The new plan, for the division being sold can then be merged into the buyer's plan. However, if those employees are terminated from B, you can distribute according to elections or possibly do a trustee to trustee transfer w/o the administrative hassle of a spin-off merger. Also think about vesting for these employees, which might need coordinated effort/agreement between buyer and seller if full vesting is desired or non-vested balances are to be transferred as well, and then there's the possible partial termination. I'm sure others in this forum who deal with 401(k)s more than I may have further insights.

@ombskidthey have to make the deferral election by 12/31 of the year for which the election applies.

Can't do 401k retroactively.

I agree rocknrolls2. For 2021 the beneficiary does not need to take an RMD For 2022 the beneficiary will need to take an RMD based on the 2021 balance. So, the beneficiary will need to take the 2022 RMD PRIOR to taking a full distribution of his inheritance... correct?

Since no RMD was required to be paid to the participant for 2021, no RMD would be payable to a beneficiary attributable to the 2021 distribution calendar year. The post-death RMDs must begin by 12/31 of the year following the year of the participant's death. Based on your facts, the beneficiary would need to commence RMDs by no later than 12/31/2022 with respect to the 2022 account balance.

The short answer is yes, there is an RMD requirement. The details of how much, to whom, and when, will depend on who the beneficiary is, and the provisions of the plan document. In the plan document there is probably a section titled "Death before required beginning date" - start there. Don't forget to read the amendments for the SECURE Act.