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If those 401(k) successor plan rules did not apply to owner-only plans then they could circumvent the pre-59.5 in-service distribution prohibition rules at will. Unless there was some specific investment he could in IRA rather than 401(k), what was purpose for terminating in the first place? If no other distributable event per RBG, I think he must wait 12 months from the distribution.

It’s with sadness that I learned about Mike Preston’s passing when Linda called me yesterday. Anyone who was fortunate to spend any time with Mike, knew he was truly a unicorn. Technically brilliant, razor sharp intellect, generous, open and honest (even on uncomfortable subjects), always supportive, witty (very dry). I always enjoyed hearing him laugh! As I look at the comments on Benefitslink, and having shared news with other colleagues, I heard the comment over and over again “Mike saved my bacon!” Rather than repeat his expertise and prowness to which all have provided testimonials, I wanted to share some stories of Mike. Mike, always a fan of the keyboard shortcuts, would do his best to get me to follow his lead. As an exercise, he gave me an excel spreadsheet to do some calculations on. I was so slow using the mouse instead of the keyboard strokes, that he never asked me to do that calculation again. He never gave me any grief about this and I continued to work with him for the next 9 years. Looking back on that, he was fully supportive and allowed me the freedom to show my abilities, even though they differed from his. When Sal Tripodi was touring, a group of us would gather together to socialize, enjoy an adult beverage and have discussions about movies. When Mike joined us, he would initially try to engage Sal in more shop talk. We would tease him and ask him what movies he’s seen. We finally got him to engage on the movie “Crouching Tiger, Hidden Dragon”. That was a pretty fun moment when he was describing the fighting scenes to us. Mike was also a fan of the Sopranos. Mike would start grooving and moving to “Woke Up This Morning.” While they were traveling they asked me if I would record an episode for them. I remember Linda telling me that the tape also included some of my girls tv shows that included the Bernstein Bears, etc. She said Mike was wondering if I was trying to send him a message. We laughed at that. When my wife and I started our journey to begin a family, Mike and Linda were fully supportive. As I would later find out, Mike and Linda went down a similar journey without success. Without Mike and Linda’s full support, we would not be parents of twin girls. I feel fortunate that Mike and Linda have met my girls and know how much their support means to us. Mike, you will always be in our hearts. I’m thankful for our time together. Frank Suzuki

Nope....controlled group....

Spouse must be beneficiary of the pre-retirement death benefit unless the participant names another beneficiary and the spouse consents in writing to such and such consent must be notarized or witnessed by a Plan Representative. Spouse, if participant has died, can and should make a claim to the Plan Administrator and go through that formal process which may or may not lead to discovery of fraud, and then proceed from there including any claims appeal. If that fails then the spouse can bring suit. If participant has not died and spouse has discovered fraud through some other avenue, maybe contacting the Plan Administrator can address the situation. We have some good legal minds on this forum who have better or more comprehensive advice.

Did he have a distributable event other than plan term?

If TPA/RK does not know that there is excess, for sure it will be coded wrong. If the TPA/RK is notified(or knows) that there was an excess, and that excess cannot be be distributed until a future event, the excess and allocable earnings could be moved to separate excess source. I have never seen that in conversion data either though...

Your description suggests the plan might be intended as one Internal Revenue Code of 1986 § 457(b) describes as an eligible deferred compensation plan, and within those might be a plan established and maintained by a State or local government employer. If the plan is such a governmental plan, ERISA § 205 (29 U.S.C. § 1055) does not govern the plan. If the plan is such a governmental § 457(b) plan, a spouse’s-consent provision of the kind ERISA § 205 commands for a retirement plan governed by that section is not a condition for Federal income tax treatment as an eligible deferred compensation plan. Whether a particular governmental § 457(b) plan requires a spouse’s consent turns on State law and the particular plan’s provisions. That Empower’s form to claim a distribution includes an element for a spouse’s consent does not by itself mean that the particular plan requires a spouse’s consent. The circumstances you’ve described suggest the spouse needs his or her lawyer’s full advice and, likely, prompt action. This is not advice to anyone.

The wife might want her lawyer’s advice about whether to pursue remedies more immediate than merely seeking an ordinary domestic-relations order. Consider also that, beyond delay in getting a DRO, such an order might have limited or no effect regarding an ERISA-governed retirement plan if the participant’s account was distributed before the plan’s administrator receives the order. This is not advice to anyone.

I believe that is called fraud if someone else signed on behalf of the wife prior to the divorce. As to the rights of the wife following the divorce, that should be address by the Qualified Domestic Relations Order (QDRO) that should be prepared and agreed to durring the divorce proceedings.

Here is a link to a case with similar facts: https://www.taxnotes.com/research/federal/court-documents/court-opinions-and-orders/individual-not-liable-for-taxes-penalties-on-ira-distributions-obtained/1psdb I don't think the participant would be entitled to a theft deduction. The tax basis in the IRA is considered to be $0 since the income has not been subject to income taxes - unless there are non-deductible contributions.

The Plan will want whatever information is relevant to determine the amount and timing of the distribution to the Alternate Payee. It will not care whether those dates have specific names, such as wedding, separation, divorce, date of cohabitation, etc. (Likely the court will want to know. 😉)

The PEO situation should not be confused with the rules which require those who have met the definition of Leased Employee to be counted as employees of the plan. Within the definition of Leased Employee is the exception for the leasing agency which provides a 10% money purchase benefit. A PEO should not be viewed through the Leased Employee rule lens. That will take you down the wrong path. A PEO is considered to be the employer for payroll purposes (paying wages and filing Form W-2) and it may sponsor a MEP which its clients adopt as participating employers. However, the PEO's client (here, the laundry) is considered to be the employer, too. This is a unique concept of co-employment that is widely misunderstood. The laundry is the employer that provides the workplace, the direction and control of the employees. It also is the sponsor of a retirement plan for those employees -- as a participating employer in the PEO MEP. The portion of the MEP that covers the laundry is a plan in the controlled group with the original S-corp. Just take it from there and apply all the controlled group retirement plan rules to the S-corp plan and the laundry's portion of the PEO MEP.

It is fair to recognize that for excess deferrals that are not a 401(a)(30) violation (i.e. the excess is not known to the plan), the participant has the responsibility to report the excess and to choose how much of the excess is in each of the plans. It the participant does not provide this information, neither plan will know about the excess and each plan will not be able to account for the amount of the excess. Each plan doesn't know what the plan doesn't know. If the participant does inform a plan that it holds an excess deferral, then that plan's recordkeeper should ask for information about the amount of the excess and the type of deferral (pre-tax or Roth) that is in that plan. Then recordkeeper should properly account for the excess going forward. Note that the reg says "For this purpose, if a designated Roth account includes any excess deferrals, any distributions from the account are treated as attributable to those excess deferrals until the total amount distributed from the designated Roth account equals the total of such deferrals and attributable income." If there is no separate accounting, then the first dollars out are a refund of the excess plus earnings and are not eligible for rollover. (This is similar to what is done for RMDs.) As evidence that @Lou S.'s odds on how this is reported are fairly accurate, I observe that I have never seen a conversion data request that asks for the amount of excess deferrals that are in a participant's account.