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A few points: 1. The rule that automatically creates a controlled group between spouses' otherwise-independent companies in a community property state is going away starting in 2024, thanks to section 315 of the SECURE 2.0 Act. 2. There is nothing that says companies in a controlled group can't have separate plans, the plans just have to be tested together. This is only an issue if either of your companies have any employees. 2a. It's possible that the plan documents you are using may automatically adopt the plan on behalf of all controlled group members, but that is an issue with the document, not with any law or regulation. If that's not what you want to happen, find a new document provider. 3. You can't terminate a 401(k) plan while maintaining another defined contribution plan (such as a 401(k) plan) within the same controlled group. This is known as the successor plan rule and is designed to prevent people from skirting the age 59½ distribution restriction on 401(k) plans. You will have to merge the plans instead, which is a little different from a standard trustee-to-trustee rollover that you might be thinking of. My suggestion at this point: pick one of your two existing plans to be the surviving plan, and merge the other plan into it. Execute a participating employer agreement (or joinder agreement, there are other names for it as well) to adopt the plan on behalf of all three employers (your company, your wife's company, and the joint venture). Optionally re-name the plan, but that is largely an aesthetic choice. One more thing that just came to mind: Have you been filing Form 5500-EZ? If not, is it because the assets in each plan are below $250,000? If the assets were above $250,000 combined you were likely required to file.

And here’s the important idea: Don’t be a do-it-yourselfer. Find a good service provider to guide you in doing things correctly and efficiently and effectively.

Unrelated employers? Basically the annual additions limit rules will come into play.

Read the plan document and the loan policy carefully to understand who is and who is not eligible to take out a new loan. It sounds like this individual is an active employee who is on the company's payroll, and the individual has an account balance which makes him a participant in the plan. Do the plan and policy say a union employee cannot have a loan? If yes, you likely would not be asking the question. Do the plan and policy say to take a loan an individual must be an active employee and must make repayments by payroll deduction? If yes, then this employee meets those criteria. Do the plan and policy say to take a loan and an individual must be an active participant (defined as they are eligible to make or receive contributions into the plan)? If yes, then this individual does not meet these criteria and cannot take a loan. Keep going until the path from the plan document and loan policy to the answer to your question is clear. How the participant happens to be coded in the plan records does not supersede the official plan documents.

I just gazed at Code 4980, didn't see anything describing how the transfer "must" occur other than not passing through the employer's hands first.

Memo to Wacko in Winnebago: One of my favorite cases is Brown v. Continental Airlines, Inc., 647 F. 3d 221 (5th Cir., 2011) - https://scholar.google.com/scholar_case?case=4019345202025914766&q=brown+v.+continental+airlines&hl=en&as_sdt=20000003 Continental alleged that a number of pilots and their spouses obtained "sham" divorces for the purpose of obtaining lump sum pension distributions from the Continental Pilots Retirement Plan that they otherwise could not have received without the pilots' separating from their employment with Continental. The pilots were allegedly acting out of concern about the financial stability of Continental and the fear that the Plan might be turned over to the PBGC and that their retirement benefits would be substantially reduced. By getting divorced, the pilots were able to obtain QDROs from state courts that assigned 100% (or, in one instance, 90%) of the pilots' pension benefits to their respective former spouses. The Plan provides that, upon divorce, if the pilot is at least 50 years old (as all the pilots in this case were), a former spouse to whom pension benefits are assigned can elect to receive those benefits in a lump sum even though the pilot continues to work at Continental. The former spouses presented the QDROs to Continental and requested payment of lump-sum pension benefits. After the former spouses received the benefits, the couples remarried. Continental sought to obtain restitution under ERISA Section 502(a)(3). The Court of Appeals noted that ERISA § 206(d)(3) limits the QDRO qualification determination to whether the state court decree calls for benefit payments outside the terms of the Plan. It rejected Continental’s expanded reading of § 206, concluding that plan administrators may not question the good faith intent of Participants submitting QDROs for qualification. Beyond that, 26 USC 414(p)(1)(B) provides: “(B) Domestic relations order - The term “domestic relations order” means any judgment, decree, or order (including approval of a property settlement agreement) which— “(i) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and (ii) is made pursuant to a State domestic relations law (including a community property law)." I don't believe any Code provision requires that the "marital property rights" requiring the transfer of pension or retirement benefits must relate only to those benefits themselves. I have had cases where one party dissipated assets and the only way to make the other party whole was to give her a larger share of the pension and retirement benefits. I had another case where the Participant repeatedly perjured himself on the stand and the judge punished him by giving my client 60% of his GM pension. I have had people trade off pension and retirement benefit for equity in the house. And in Maryland and I think in most states the trial judge has the power to award as much or as little as he/she deems the be "equitable". There is no presumption of 50/50. There is no requirement that the court recognize and adjust for the Participant's premarital and therefore non-marital portion of his/her benefits. On top of all of this, the fact that pension and retirement benefits can be garnished/attached via a QDRO for alimony or child support is more evidence that the parties can agree how much of these benefits will be transferred from the Participant to the Alternate Payee and how that amount will be computed. Sometimes the terminal date for the accrual of benefits if the date of the parties separation, or it can be the date of the divorce, or it can be any arbitrary date the parties agree upon. The Brown v. Continental case and the DoL Advisory opinions are evidence that this is a "nunya" situation. Nuya business Mr. Administrator. The Plan Administrator has a fiduciary duty toward both parties, and part of that means not interfering with their deal. For more reading in the importance of the Plan Administrator not looking behind that they have in front of them. Read Kari E. Kennedy, Executrix v. Plan Administrator for Dupont Savings and Investment Plan, 129 S.Ct. 865, 555 U.S. 285 (2009) which you can find at - https://scholar.google.com/scholar_case?case=16253581861885772265&q=Kari+E.++Kennedy,+Executrix+v.++Plan+Administrator+for+Dupont+Savings+and+Investment+Plan,+129+S.Ct.+865+(2009)&hl=en&as_sdt=20000003 and PaineWebber v. East, 363 Md. 408, 768 A.2d 1029 (2001) - https://scholar.google.com/scholar_case?case=14624602948014812254&q=painewebber+v.+east&hl=en&as_sdt=4,83,96,109,124,146,159,290,291,292,308,309,312,313,353,354,355,371,372,375,376 David

It is a taxable fringe benefit and included in the 3401(a) compensation definition regardless of the employer's discretionary decision on whether to withhold unless the plan definition also has the permitted fringe benefit exclusions. The 401k Answer Book has a nice table that shows the various 414s safe harbor compensation definitions, inclusions, exclusions and optional exclusions. Other publications likely have similar,

A rule of thumb is if it appears on the employee's pay stub, it is 3401(a) compensation. (This rule of thumb is not 100% reliable since it is subject to the reporting accuracy of the payroll provider.) You are correct that vehicle fringe benefits are not listed among the 20 subparagraphs under section 3401(a). The IRS Fringe Benefit Guide Publication 5137 (attached) is a resource for wading through the swamp of the various fringe benefits. It includes Employer-Provided Vehicles on page 36. And you are correct that Group-Term Life Insurance (page 58) is treated differently. (By the way, the GTL has some quirks related to dependents, retirees and terminated employees that many recordkeepers are no aware of.) Given your description of this employer's vehicle policy, I would say the $500 per month is included in 3401(a) wages. If this employer has a plan that uses 3401(a) wages as plan compensation, then the employer would need to explicitly exclude this vehicle benefit and any other fringe benefit that it does not want to use for calculating plan benefits. Fringe Benefit Guide Publication 5137.pdf

I would think that you're subject to the -11g rules, where the increase in benefits must be nondiscriminatory. And another result of the amendment being adopted more than 2.5 months after year end being that you're not going to be able to reflect the benefit increase in the valuation. I just had something like this, where I grumbled, why wasn't the benefit change just made part of the original document signed last month? Because I think then it would have been okay, because a retro-adopted plan is deemed signed on 12/31. Willing to be wrong, though....

I agree that the remedy is with the state/tribal court and if said court issued an amended QDRO to vacate the prior QDRO and restore participant's benefit to the full undivided amount then the plan would be able to work with that. Agree the plan cannot look past the QDRO itself, and in simple terms, if the order is a Domestic Relations Order issued by a state/tribal court and such DRO rises to the level of a QDRO then it's a QDRO. I draft amended QDROs to vacate a prior QDRO often and so far it has never been as a result of attempted fraud on behalf of the participant. Great reason why in CA the QDRO must be a stipulation first and only after the court approves a Request For Order (RFO) would they permit a QDRO to be entered without all parties signature.

I would say yes. I would want to have all of the facts before taking that action. Absolutely agree with that.

Wow, what a needless over complicated provision for such a small amount. Couldn't they just say - If you have an emergency you can take up to $1,000. If you do so you can not do so again from the same plan for 3 years. All the extra stuff is just screaming to mess something up somewhere.

Yeah, all the advice above. Just a hunch, Spidey-sense is tingling for ALL of the above commentators. Me too. It should for you as well. Something is not right.

Before doing (or even considering doing) anything, a plan’s administrator might reread its ERISA § 206(d)(3)(G)(i)(I) DRO procedures and its ERISA § 503 claims procedures. If either procedure does not state enough guidance about how the administrator should handle the situation, the administrator, with its lawyer’s advice, might evaluate whether to revise one or both procedures.