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I don't know about you all but I find these discussions much more interesting and enriching compared to the "what compensation do I use to calculate the safe harbor contribution?" questions that make me feel like we're doing someone else's job of basic training their staff.

It is absolutely the employer/plan sponsor's decision on how to handle this. It is a discretionary decision (and discretionary 2023 amendment if done) to provide the retired participant with a lump sum that is more than what is otherwise statutorily required to be paid from the plan and impacts the funded status of the plan (and financial obligation of the employer), so in no way is this a decision that should be (or can be) made by anyone other than the employer. The employer's advisor(s) can provide advice concerning pros and cons and mechanics but the decision rests with the employer. Going back to the TPA service agreement, if some agreed upon service standard was not met and directly resulted in this situation, then maybe some restitution is warranted - but that is between the employer and TPA.

Listening to a presentation today on SECURE 2.0 and I left with the impression that this is literally impossible to implement. Anyone else? Between Roth as catch-ups, match as Roth, mandatory auto enrollment (with Auto Increase to boot), 37 new distribution options that you can only take once every 3 years. Sure I'm exaggerating but only a little. I just can't see implementing this stuff with a small service business that has 25 employees.

Austin, i agree Austin. 2.0 feels challenging, messy, crappy....

Thank you, all, for the many helpful suggestions. CuseFan, on my list of potential paths is getting an inside researcher at the plan’s administrator to check the probate court’s records for the county in which the decedent was domiciled to see whether anything was filed. MoJo, if the administrator finds a personal representative of the decedent’s estate, we’d likely seek information, but be unlikely to reveal information. AKowalski and EBP, regrettably the plan’s governing documents lack a provision anything like those you mention. AKowalski, I am considering a fact-finding aid that a writing not received with a reasonable mailing time from the date of death is presumed not genuine, unless evidence submitted to the administrator supports its finding that the writing was the participant’s authentic act. The plan grants discretionary authority not only to interpret the plan but also for findings of facts. I like working with the plan’s time limit on claims. An interpleader is possible without waiting for competing claims. The statute grants jurisdiction “if [t]wo or more adverse claimants, of diverse citizenship . . . , are claiming or may claim to be entitled[.]” 28 U.S.C. § 1335 (emphasis added). But there must be at least would-be or could-be takers. At least one must be “adverse” to another. Further, a could-be claimant must be sufficiently identified that the plan’s litigator could get service of process—else, who would be bound by the court’s decision? The plan’s administrator has not yet identified anyone with authority to act for the decedent’s estate. Even if the administrator finds adverse claimants, we worry they might spend little or nothing on discovery. (Worse, a personal representative of the decedent’s estate might lack money to file anything.) A ticked-off Federal judge might order the interpleader petitioner, the plan’s administrator, to develop the facts. In those circumstances, it’s simpler, and less expensive, to pay an at-risk distribution. Seeking a declaratory judgment is available only “[i]n a case of actual controversy” and only if the case is “within [the Federal court’s] jurisdiction[.]” 28 U.S.C. § 2201(a). (The plan’s administrator would not consider proceeding in any State’s court. And if anyone asks a State’s court for a declaratory judgment, the administrator would challenge jurisdiction anywhere but the State in which it is organized and has its principal office.) fmsinc, thank you for describing suspicions about a writing ostensibly signed a few days before the participant’s death. That’s what started my query. All, a discretionary finding is a straightforward path (and likely is so no matter which finding the administrator chooses). A disappointed person is unlikely to find a lawyer to pursue anything. And showing the administrator abused its discretion with an unreasoned (and so capricious) finding is an uphill climb. This administrator will put efforts on both the reasoning and the written record. I really appreciate everyone’s wonderful help. Even if there is no one clear and simple solution (and how would there be with missing and ambiguous facts?), you’ve helped me think this through.

Again, the plan document should specify exactly what part of the DC account is used to offset the accrued benefit, but generally it would be the amount attributable to employer non-elective contributions. The amount used for the offset has to be a uniform percentage of pay for all participants if you want to satisfy 401(a)(26) on a pre-offset basis.

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)