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How much money is at stake? Might make a difference in the extent of the investigation/effort. Is the beneficiary form a legitimate PLAN provided beneficiary form? If yes, is this form available on a website for just anyone, or are the controls such that it would at least be very difficult for a criminal to obtain it? Is the website able to determine the IP address of the computer that was used to request the beneficiary form if requested on-line, assuming it was requested relatively recently? (I'm just tossing out random thought, as I'm a technological dinosaur, so I don't know what information can be legitimately gleaned.) It may sound silly, but perhaps start with the return address on the envelope, if it was sent by mail? If it is a legitimate address for the same person who is claiming to be the beneficiary, perhaps a search of public records could be initiated by a commercial service, to possibly find out if there is a relationship? Any way to check to see if the beneficiary's SS# is a legitimate #? Is there any basis for filing an interpleader request? Basically, I'd refer this to ERISA counsel anyway, so I'm no help!

FWIW at this point: the following is pasted from a past Q&A session between the actuarial "intersector" group and the IRS -- so not official guidance, but indicative of the IRS' view. 417(e) rates - lump sums and administrative delay: Assume lump sum due for Calendar Year plan is calculated and QJSA Notice sent to participant in November 2013 assuming an ASD of December 31, 2013. Plan has an annual stability period. Participant and spouse execute and return forms in December, but distribution is not made until January 15, 2014. Should distribution be based on 417(e) rates for 2013 or 2014? If 2014, must the QJSA notice be updated to reflect the benefits payable using those rates? What constitutes a reasonable administrative delay? Assume same facts, but that the election is not returned until January, followed by distribution, should it be based on 2013 or 2014 rates? IRS Response: The ASD determines the assumptions to be used. The statute says if the form is a LS distribution, the ASD is the date “all events have occurred which entitle the participant to such a benefit”, which would include return of signed forms. (This is not stated in the reg.) Thus if forms are signed and returned in December, and distribution is made in a reasonable period, 2013 assumptions should be used. If the forms are signed and returned in January, the ASD is in January and the 2014 rates must be used. Because the relative benefit amounts will have changed, new QJSA forms should be issued with the amounts based on 2014 rates. In this situation, it makes sense to clearly note on the election forms that the amounts shown on the form are only good if the forms are signed and returned by the end of the year. (“Reasonable administrative delay” is not going to be defined.)

No. To qualify for the credit the employer can not have maintained any other qualified plan during the past 3 years. See IRC 45E(c)(2)

It may be the RIGHT thing to do but I still think it must be via an amendment otherwise it may not be viewed by IRS as the LEGAL thing to do.

How would you write the amendment? As an 11-g or a general amendment specifying the terminated participant by job category or name. It may not be so clear cut, just thinking out loud and curious. This would be an amendment retroactive to 2022? I do agree with the amendment should be prepared and should definitely be done as the participant may create a lot of headaches since there is a significant difference between 2021 and 2022 rates.

I don't have any ideas for validating a deceased participant's signature other than those already suggested, but this situation is why we include language in our plan document that requires the beneficiary designation to be received by the plan administrator during the participant's lifetime to be valid.

If an interpleader is not yet appropriate in your jurisdiction, how about filing a declaratory judgment action against the claimant and let the court decide if he gets the money. The Plan Administrator should not allow himself to be placed in the position of making that determination. If the beneficiary designation was signed a few days before his death, the Participant may not have been of sound mind. He might have been in a coma. This situation doesn't pass the smell test. If you deny the claim because the claimant did not follow the procedures and did not use the forms set forth in the plan documents, you will have a justiciable dispute as the basis for declaratory judgment. The Plan Administrator should contact the Plan's liability insurance carrier and ask for guidance.

First of all, you need to read the applicable plan provisions very carefully. Some plans provide that a beneficiary designation is only valid if it is transmitted by the participant to the plan (in my opinion, it is a best practice to include such a provision precisely to avoid this question). The participant could never transmit a beneficiary designation after death so under those plans it would fail regardless of whether it is a forgery. If the plan is silent on that point, the plan's fiduciaries could adopt a formal plan interpretation that would likely be respected by courts under an arbitrary and capricious standard of review. Another important plan term to look at is whether there is a plan limitations period and exactly how that provision is framed. If the limitations period says that no claims may be filed more than 1 year after a claim accrues, and it defines accrual as having information sufficient to give rise to the claim, then notifying the potential claimant that you are giving the benefit to someone else may be enough to trigger the commencement of the limitations period. If the claim accrues only when a formal claim for benefits is submitted and denied (after exhaustion of administrative remedies), or if accrual is defined by reference to common law ERISA accrual concepts, then it may be much harder to get the period to begin accruing by sending someone a notice (that they ignore). As a practical matter, of course, reaching out to the estate and telling them they have a specified deadline to submit a claim could get the ball rolling. Another option would be to file an interpleader lawsuit. Correct me if I'm wrong, but I don't think you need to wait until both potential claimants have actually filed claims before you can file an interpleader lawsuit. The point of an interpleader lawsuit is to force everyone into one lawsuit who might have inconsistent claims against you. You "join" them to the lawsuit and force them to either bring or forfeit their claims before you pay out the benefit. You might consider (1) talking to the estate to see if they think the beneficiary designation is legitimate, whether it lines up with the default beneficiary, etc., (2) adopting a formal plan policy, (3) issuing a claim determination denying the benefit in reliance on the policy, (4) denying the appeal, and then, (5) filing (or converting a lawsuit that the claimant files into) an interpleader lawsuit in which you force all of the parties to the table to firmly resolve all claims before you actually pay out the benefit to anyone. Or, you could file the interpleader at an earlier point in time before the plan takes any formal action.

I like Cuse's suggestion to discuss with the estate representative whether they will be filing a claim, and if so, begin the process of determining between competing claims (culminating in an interpleader if required). Also, the estate may shed light on who the "natural bene's" of the descendent were. and if the named bene (the friend is not among them, that would raise suspicion in my mind). This one is a tough one. Not too much can be disclosed to anyone unless and until a determination of who at least a probable bene is - otherwise, it could be a release of NPI to a wrong party....

Taking out the bits about deferrals, I'm reading it as, "an employee may elect ... to have made on the employee's behalf designated Roth contributions in lieu of all or a portion of ... matching contributions or nonelective contributions which may otherwise be made on the employee's behalf" This is correct. That's our Congress for you

This question is vague. What exactly are you asking? The plan document should describe in detail how the normal retirement benefit and accrued benefit are calculated, including any offsets. That said, "offset" can mean (at least) two very different things which I think you may be confusing based on the context here. There is a "floor-offset" which is when the accrued benefit in a DB plan is reduced by the actuarial equivalent of a DC account balance. Then there is an "offset benefit formula" which is one way of integrating the plan's benefit formula with social security. An offset benefit formula would usually be designed to be a safe harbor formula.

Might some other public or otherwise attainable recent records with the decedent's signature be accessed - such as a driver's license? You mention no claim from an estate, but is there an estate and, if there is, could the executor be requested to find and release a copy of decedent's signature? The claiming beneficiary could be asked to provide such supporting documentation, but unless such is provided through a certified third party you're essentially in the same situation.

You need to look at IRC 402A(b)(1) as amended by S2.0 sec. 604. This is what IRC 402A(b)(1) said pre-S2.0: And as amended: With the amended language it is clear that the Roth employer contributions are made at the employee's election.

Just a guess. These are individual brokerage accounts for each participant, the guy who didn't take the RMD used to be the head hancho at the company and his golf buddy broker told him he didn't need RMDs because he's not a 5% owner anymore? But yeah as Jakyasar says, something doesn't sound right here.

I am confused too, didn't the TPA provide the client with the RMD amount each year? Or, did they actually expect the client to determine his own RMD for a pension plan and withdraw? If the TPA provided the info and the client did not take it out after one year, did they inform the client about the issues? 5 years in a row is a bit too much of a stretch for not informing the client each year and continue administering the plan as if nothing is wrong. Hmmmm. Moreover, when the TPA did the annual work, didn't they notice that there were withdrawals missing? May be I am not reading the original post correctly!

Yes, good point. Here's the reg on point under the ADEA. Still seems fine because it's a consistent percentage. 29 CFR §1625.10(d)(4)(ii): (ii) As a condition of participation in a voluntary employee benefit plan. An older employee within the protected age group may be required as a condition of participation in a voluntary employee benefit plan to make a greater contribution than a younger employee only if the older employee is not thereby required to bear a greater proportion of the total premium cost (employer-paid and employee-paid) than the younger employee. Otherwise the requirement would discriminate against the older employee by making compensation in the form of an employer contribution available on less favorable terms than for the younger employee and denying that compensation altogether to an older employee unwilling or unable to meet the less favorable terms. Such discrimination is not authorized by section 4(f)(2). This principle applies to three different contribution arrangements as follows: (A) Employee-pay-all plans. Older employees, like younger employees, may be required to contribute as a condition of participation up to the full premium cost for their age. (B) Non-contributory (“employer-pay-all”) plans. Where younger employees are not required to contribute any portion of the total premium cost, older employees may not be required to contribute any portion. (C) Contributory plans. In these plans employers and participating employees share the premium cost. The required contributions of participants may increase with age so long as the proportion of the total premium required to be paid by the participants does not increase with age.

We don't have enough information to know. what is the document's definition of compensation W-2 reportable compensation? 415 comp? 3401(a)? What are the deferrals? pre-tax? Roth? Are there additional non-reported non-taxable amounts? Like HSA or section 125 dollars? Which generally aren't on the W-2 at all? And what are you going to use the compensation figure for, once you figure it out? A defined benefit accrual? safe harbor contribution? non-discrimination testing? different compensation definitions are often allowable depending on what it is being used for.

CuseFan, thanks. The two new early-out distributions, and a hardship distribution, can be self-certifying; and my assumption (which I neglected to state in my originating post) is that the plan or its administrator would make them self-certifying. Might a plan’s sponsor or administrator set a lower charge on some kinds of distributions? For example, imagine the plan’s undifferentiated charge for a distribution is $100. That charge might not attract attention when applied on a $200,000 severance-from-employment distribution. But imagine a participant wants to use an emergency personal expense distribution to meet her need to raise $200. The participant would need to claim $300 to raise $200. (Assume no withholding for income taxes.) The $100 processing charge then is 50% of the net amount the distributee receives. Because this kind of distribution is for $1,000 or less, some processing charges participants tolerate for bigger distributions might seem disproportionate. Others might say that’s what happens when one uses a retirement plan as an any-purpose savings account. I don’t advocate for or against any view. Rather, my queries are about illustrating the difficult choices service providers and plan fiduciaries face, and that there might be many (and differing) interests to consider.

I agree with CuseFan approach assuming this is an NHCE. Maybe a simple amendment that preserves the the 417(e) lump sum as of date of the request for participants who submit a request for payment in 2022 but is not processed until 2023 due to administrative delays beyond the participant's control. Oddly specific but I would think it would cover this situation and make everyone happy. Might be a question about whether such an amendment might take your document out of prototype status but I think the IRS would be OK with it. Especially if the plan is "well funded" and the participant has always be an NHCE.

Ascensus does a LOT of business unbundled. We've got a lot of clients with them. Send me a message and I'll put you in touch with the head of their TPA relationship group and he'll help you make it so.

Nah, once you blow past 20,500 any deferrals start filling that catchup bucket.

What does the little Champagne bottle call his father?Pop! Happy New Year 2023