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The difficulty, of course, is that these elections are not being processed by fifth-graders - they are being processed by computers, which are only as smart as they are programmed to be. Computers generally process numbers as either integers or "floating point" numbers - essentially decimals. While it is certainly possible to program a computer to work with fractions, it is more complex than using integers or floating points, and the person developing the system (or more accurately, the person paying for the development of the system) may feel that benefit of the added precision gained by supporting fractional numbers is not worth it in terms of development and support costs. If we continue this line of reasoning, why stop at fractions? What if I want to designate 1/sqrt(2) of my account to my first contingent beneficiary, and 1-1/sqrt(2) to the second? This amount could be readily calculated, but it would not be reasonable of me to expect the software to support designations made in terms of irrational numbers. Instead I should be prepared to accept an approximation. An approximation that is accurate only to one part in a hundred (whole percentages) is not great, however the information provided in this thread seems to indicate that is uncommon among providers. More common seems to be precision to one part in a thousand (percentage with one decimal place) or one part in ten thousand (percentage with two decimal places), which while not perfect, is pretty good. For an account with a value in the millions, percentage with two decimal places means that the amounts will be accurate to within the hundreds of dollars.

This will NOT meet the requirements for a discretionary ACP safe harbor match. It should be ok for a fixed match however.

IMHO I think the plan would still prepare a 1099-R for the outgoing funds as a direct payment distribution (if that's how it went out). It's up to the participant to report it properly and have the backup information when he files his personal tax return that he rolled it into a tax qualified vehicle within 60 days. No matter that he rolled it back into the same plan, that just reports as an incoming rollover to the plan. Again - this is just my opinion on how I would handle this situation. It's ultimately a wash if it all happened in the same plan year but I believe the plan needs to show it as it happened..... my two cents!

Yeah 200% of the first 6% SH match satisfies the enhanced safe harbor match formula for ADP/ACP 100% of the first 7% SH match satisfies and enhanced safe harbor match with respect to ADP, but not ACP. Though there are a couple ways you can run the ACP test as I understand it. I've never actually had to worry about in the practice though.

$3???

This means amounts that could be distributed from the plan. For example, 401(k) deferrals if the participant is over age 59½. There are other distributable events for 401(k) deferrals, of course, but those would not generally be of much use in an IRR context. Terminated employees can't usually make rollover contributions, and hardship distributions aren't eligible rollover distributions, for a couple of examples. This is anything that couldn't be distributed from the plan, for example 401(k) deferrals or safe harbor contributions under age 59½ while still employed. If a plan allows a Roth conversion of amounts that are not otherwise distributable, then it has to retain the distribution restrictions that applied to the amounts prior to the conversion. That means, in most cases, the plan will have to track twice the number of sources that they had in the plan before. For example, now they have 401(k), 401(k) Roth conversion, safe harbor, safe harbor Roth conversion, profit sharing, profit sharing Roth conversion, etc. That might be the reason why a particular platform isn't supporting this type of conversion.

As long as the formula is written into the plan doc, then I agree you are good on the ADP and ACP safe harbor.

Agree.

Responding to Peter, there are plenty of cases explaining the reach of Federal preemption under ERISA. Forristall v. Federal Express, Civil Action No. 13-11454, United States District Court, D. Massachusetts (November 21, 2014) Smithson v. Smithson, Civil Action No. 1:15-0583, United States District Court, S.D. West Virginia, Bluefield (2015) McCarthy v. Estate of McCarthy, No. 14-CV-6194 (JMF), United States District Court, S.D. New York (2015) Cunningham v Hebert, Case No. 14 C 9292, United States District Court, N.D. Illinois, Eastern Division. November 1, 2016 In re: Marriage of Steiner and Steiner, No. D071155, Court of Appeals of California, Fourth District, Division One (November 30, 2017) Prudential Insurance Company of America v. McFadden, Civil Action No. 6:19-CV-051-CHB, (USDC, ED Ky 2020) The one thing I have learned in the practice of law is that you can never take anything for granted. State courts are happy to dodge hard issues if they can use "Federal preemption" as a convenient shield." They are like the sword of Damocles hanging about. And if they cannot use Federal preemption, state courts have other ways to avoid the enforcement and collection of post-distribution suits of pension and retirement benefits. They will use the state statute of limitations, the doctrine of laches, res judicata, collateral estoppel, failure of the court to reserve jurisdiction to address such issues, expiration of the time limits imposed by the Rules of Procedure that permit a party to file Motions to alter or amend a Court Order, or to revise, vacate or reform a Court Order or other document, or to remedy an inequity on the grounds of basis of "fraud", "mistake" or "irregularity". Here is a 2019 article from the ABA on Federal preemption that does not mention Andochick and the ability of the intended beneficiary to file a post distribution suit to get around the result in Kennedy. Also attached is my Memo re: workarounds to the outcome in Kennedy. David ERISA Preemption - ABA 2019.pdf RETIREMENT AND LIFE INSURANCE BENEFITS ERISA PREEMPTION etc.pdf

I see someone beat me to it.

Why. You guys get the whole MONTH of October! (for 20 years, now.) https://nationaldaycalendar.com/employee-ownership-month-october/ https://esopassociation.org/employee-ownership-month#:~:text=October is Employee Ownership Month,to help you celebrate EOM.

I reviewed my Empower account. They accept decimals, but the total still needs to equal 100%. 33.33% for three beneficiaries is not accepted by the website.

Just my personal opinion, but this is a stupid situation. I see no reason to require whole percentages. This 1/3 situation is a prime example of the stupidity. It shouldn't be required by the plan document or the administrator. If it's in the plan document, I say change it. If it's a TPA requirement (Fidelity or Joe-Bag-of-Donuts), get a new administrator if they can't handle fractions or decimals. The more I think of this, the more ridiculous it seems. As best I can recall I learned "fractions" in the fifth grade and decimals in the six. Give me a break.

I see an additional value: an opportunity to put the prior beneficiary designations in front of the participants, requesting changes and/or affirmation.

Perhaps check the Plan Document? The Relius Cycle-3 doc seems to have loose enough language that you could reasonably conclude that a salary deferral election is not specific to a named plan, but that the compensation to be deferred against is instead dependent upon the Plan. This would allow you to maintain and transfer elections from Plan to Plan for a plan merger, or termination and newly adopted Plan. This would require significant foresight though, proper administrative documentation, timely notice, and willing acceptance of thusly modified affirmative elections.

Ha! ESOPs are so important that an entire month is needed each year to celebrate their existence! https://esopassociation.org/employee-ownership-month#:~:text=October is Employee Ownership Month,local communities%2C and the nation.

If the TPA works mostly (or exclusively) with plans on daily investment platforms, they may have little to no need to deal with 1099-Rs, as those would be handled by the platform. The TPA might be further insulated from the process if they utilize a service like Penchecks for distributions from non-platform plans.

Agree with Belgarath. The 1099 is issued based on what transaction took place from the plan. What happens after that is irrelevant to the plan.

Not sure I understand the question. Was the lump sum distribution was paid directly to the former employee, with the check issued to the employee? If so, there was a taxable distribution with 20% mandatory withholding, and a 1099-R would be issued accordingly. There's no subsequent 1099-R when the individual then rolls to another IRA, or to another qualified plan. The participant would have to show the rollover on their individual tax return for the year in question. I'm wondering if there s some additional detail that you can provide, if there's something else you are really asking?