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See attached. Modify as necessary to meet the facts of your case. The DoL booklet attached at Q. 1-2 and Q. 1-13 says that: "It is also not necessary that the retirement plan be brought into state court or made a party to a domestic relations proceeding for an order issued in that proceeding to be a “domestic relations order” or a “qualified domestic relations order.” Indeed, because state law is generally preempted to the extent that it relates to retirement plans, the Department takes the position that retirement plans cannot be joined as a party in a domestic relations proceeding pursuant to state law." But that is not true. A fiduciary owes an obligation to both the Participant and to the Alternate Payee as a beneficiary under 29 USC 1002(8). 29 USC 1132(c) provides for penalties imposed upon a Plan Administrator for failure to provide information to a Participant or a Beneficiary. Under 29 USC 1132(a)(1)(B) a Participant or an Alternate Payee (who is classified as a beneficiary), can sue "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan;" Under 29 USC 1132(e)(1) it states that: "(e)Jurisdiction (1)Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, fiduciary, or any person referred to in section 1021(f)(1) of this title. State courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction of actions under paragraphs (1)(B) and (7) of subsection (a) of this section." (Emphasis supplied) A 2008 case from the US Court of Appeals for the 1st Circuit, Geiger v. Foley Hoag LLP Retirement Plan, held as follows: "Geiger [the party complaining about the QDRO] argues that state courts do not have jurisdiction to determine whether domestic relations orders are QDROs . . .Geiger cites no cases in support of his position. Instead he relies on what he calls the "unambiguous language" of ERISA, specifically, 29 U.S.C. §1132(e)(1), which provides that federal courts "have exclusive jurisdiction over civil actions under this subchapter brought by a . . . participant," with the exception that state courts have concurrent jurisdiction over actions brought to recover benefits or enforce or clarify rights under a plan. 29 U.S.C. §1132(a)(1)(B). In Geiger's view, this is the beginning and the end of the inquiry. His view, however, has been rejected by several courts. See e.g., Scales v. Gen. Motors Corp., 275 F. Supp. 2d 871, 876-77 (E.D. Mich. 2003) ("[S]tate courts have concurrent jurisdiction regarding the interpretation of QDROs . . . and are fully competent to adjudicate whether their own orders are QDROs."); In re Marriage of Oddino, 939 P.2d 1266, 1272 (Cal. 1997) (action to qualify domestic relations order is an action to "obtain or clarify benefits claimed under the terms of a plan," and thus within state courts' jurisdiction); Robson v. Elec. Contractors Ass'n Local 134, 727 N.E.2d 692, 697 (Ill. App. Ct. 1999) ("[S]tate and federal courts have concurrent subject matter jurisdiction to construe the ERISA provisions relating to a QDRO . . . ."); Eller v. Bolton, 895 A.2d 382, 393 n.6 (Md. App. 2006) ("State and federal courts have concurrent jurisdiction to review a plan's qualification of a state domestic relations order . . . .")." "Geiger acknowledges the one-sidedness of the caselaw, but argues that the rationale set forth by those decisions both violates ERISA's plain language and is "logically senseless." We do not agree. In our view, it is significant that Congress has expressly exempted QDROs from ERISA's general preemption of state law. 29 U.S.C. 1144(b)(7). We are further persuaded that, "separate litigation of the QDRO issue in federal court presents the potential for an expensive and time-consuming course of parallel litigation . . . in the two court systems." Oddino, 929 P.2d at 1274-75. And finally, we share the view of the Oddino court that: Congress, having given state courts the power to issue orders determining and dividing marital rights in retirement plans, would require a separate federal court proceeding to decide whether the order is a QDRO. This would cause undue hardship, expense and delay to the affected party, and impose an unnecessary workload on already overburdened federal courts." Similar decisions came from the 9th Circuit -Mack v. Kuckenmeister, 619 F.3d 1010, 1017 (9th Cir. 2010) (finding state court may "determine whether a DRO is a QDRO"); Langston v. Wilson McShane Corp., 776 N.W.2d 684, 693 (Minn. 2009), Jones v. Am. Airlines, Inc., 57 F. Supp. 2d 1224, 1232 (D. Wyo. 1999), In re Marriage of Levingston, 12 Cal.App.4th 1303, 1304 (Cal. Ct. App. 1993), Dalton v. Dalton, 551 S.W.3d 126, 142 (Tex. 2018) ("[U]nder ERISA, the proposed order does not qualify as a QDRO."). See also Lundstrom v. Young, Case No. 18-cv-2856-GPC-MSB, United States District Court, S.D. California (2004) that you can find at - https://scholar.google.com/scholar_case?case=13599097813167549363&hl=en&lr=lang_en&as_sdt=6,33&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:12484640753426065479:AFWwaea-0cgdJTbhK1HjGe3RYMFg&html=&pos=0&folt=kw And see Turner, Equitable Distribution of Property, §6:19 n.11. In 2006 our Court of Special Appeals in Eller v. Bolton, 168 Md. App. 96, 895 A.2d 382 (2006), at footnote 6 said: "State and federal courts have concurrent jurisdiction to review a plan's qualification of a state domestic relations order under ERISA and payments made pursuant to such an order. See 29 U.S.C. §1132(e) (conferring concurrent jurisdiction upon federal district and appellate courts, along with state courts of competent jurisdiction, to decide a participant's or beneficiary's right "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan")." See the recent case of Schwartz v. Bogen, Civil File No. 17-3329 (MJD/TNL), United States District Court, D. Minnesota (November 28, 2017) - https://scholar.google.com/scholar_case?case=7440152571720477172&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt: "The domestic relations exception . . . divests the federal courts of jurisdiction over any action for which the subject is a divorce, allowance of alimony, or child support, including the distribution of marital property." Wallace v. Wallace, 736 F.3d 764, 766 (8th Cir. 2013) (citations omitted). “[A] federal suit is inextricably intertwined with a state domestic proceeding, thereby depriving the federal court of subject matter jurisdiction, where the requested federal remedy overlaps the remedy at issue in the state proceeding. This occurs where the federal suit involves a remedy which is essentially domestic— where, in addressing the same conduct involved in a state domestic proceeding, the effect of a remedy in the federal suit is to modify, nullify, or predetermine the domestic ruling of the state proceeding. “Id. at 767 (citation omitted). “Subject matter jurisdiction exists in this case based on federal question jurisdiction because this lawsuit is based on ERISA, a federal statute. This is not a diversity case; therefore, the domestic relations exception does not apply. See, e.g., United States v. Crawford, 115 F.3d 1397, 1401-02 (8th Cir. 1997) (holding that the domestic relations "exception is irrelevant to federal prosecutions under the CSRA because the district courts' jurisdiction in such cases does not rest upon diversity, but rather is based upon 18 U.S.C. § 3231 ("The district courts of the United States shall have original jurisdiction, exclusive of the courts of the States, of all offenses against the laws of the United States.")); Rosenbrahn v. Daugaard, 61 F. Supp. 3d 862, 867 (D.S.D. 2015) ("But the domestic relations exception only applies to this court's diversity jurisdiction, not its federal question jurisdiction."), aff'd, 799 F.3d 918 (8th Cir. 2015); Grazzini-Rucki v. Knutson, No. 13-CV-2477 (SRN/JSM), 2014 WL 2462855, at (D. Minn. May 29, 2014) ("The Court, however, concludes that the domestic relations exception does not apply because it is a limitation on diversity jurisdiction, and there is no diversity here.") aff'd (8th Cir. Mar. 31, 2015).” Notice of Adverse Claim- Interest Cover Letter 05-25-2024.pdf Notice of Adverse Claim-Interest - 05-25-24.wpd.pdf ++++QDROs Booklet from DOL.pdf

A plan does not lose safe harbor status. It has a failure that needs to be corrected. Follow the terms of the plan document. Assuming you have a pre-approved plan document, and this plan was designed to be an ADP/ACP safe harbor, the document certainly says that the plan will satisfy ADP/ACP testing by satisfying the safe harbor requirements. It must still do that - in a nondiscriminatory way. I bet somewhere in the plan document (buried in the BPD section on safe harbor contributions) it also says that the SH contribution must be based on a nondiscriminatory (not just reasonable) definition of comp. If the plan didn't do so, it has an operational failure that needs to be corrected by doing what it is supposed to do (no -11(g) amendment as this isn't a nondiscrimination or coverage failure, it was an operational failure). The plan should recalculate the match based on a nondiscriminatory definition of comp. (and I would do an annual/true-up allocation since the correct periodic match wasn't deposited by the end of the following quarter). That'll be in the BPD as well.

Sending the check is the cleanest way to correct it as long as the all of the plan accounting regarding the loan and the correction are consistent. It isolates the correction to the original loan. Note that if there is not full documentation of why, when and what happened, then the plan accounting could make the extra money in the participant's account look like an overpayment, or an invalid contribution, or some form of a permissible or impermissible plan distribution, or excessive income, or other anomalies. Applying the overpayment to the new loan is tempting, but still requires full documentation of the plan accounting that would involve both the old and new loans.

In a controlled group, moving from one employer to another within the group is not a distributable event from either employer's plan. Transferring an account from one plan to another will require each plan to have provisions to allow the transfer out and to accept the transfer in as a trust-to-trust transfer. This may not be a great idea if there are differences between the protected benefits in the two plans

Corey, it would just be 3% for the 2024 year if adopted by 12/1/24, right?

Agree that HCEs over age 50 could make catch-up contributions during the current year. If they are key employees and the plan is top heavy, this would also allow them to make contributions without triggering the top heavy minimum for the non-keys, since catch-up contributions in the current year are disregarded for top heavy. Assuming that the plan did not switch to prior year testing during the last 5 years, then it could switch to current year testing. However if none of the NHCEs defer in the current year then you are back in the same situation. Another option would be to do a 4% safe harbor non-elective contribution for the NHCEs.

Or, if it's not too late, allocate a QNEC to last year's NHCEs?

And of course, I overlooked that it's still the 2024 minimum being paid based off 2023, so I do think they're going to have to recoup some of that IRA rollover to satisfy the RMD. (And adjust the amount coming out of the IRA for earnings since it was an ineligible rollover contribution. Hmmm, thinking out loud has me presuming only the "principal" amount coming from the IRA satisfies the RMD for the plan, like you couldn't count some of the earnings towards the RMD.)

Yes. ERISA requires the advance notice regardless of who is being reduced because the plan subject to ERISA.

You definitely did not overlook anything impofrtant.

A non-ERISA plan is not required to give an ERISA 204(h) notice. The plan only covers the 100% shareholder and their spouse, and no one else is eligible, so the plan is not subject to the notice requirement.

If the benefit formula in the plan is written, for example, to accrue a benefit payable beginning at retirement at a rate of $27,500 per year, and the participant accrued that same formula year after year, then they are accruing at a rate of exactly 100% of the actual rate that they earned in any prior year under the plan’s written benefit formula. If, instead, the formula was written to be $5,000 per year for the first 5 years and $15,000 per year thereafter, then the 133-1/3 accrual rule is not met. Accruals in years 6 are thereafter are more that 133-1/3 percent more than the accruals in at least one of the prior years under the formula. But fret not, you may amend the plan with a fresh start date instead and the adoption of the new formula can be designed to be a million times higher than the old formula and, if worded properly, not violate the 133-1/3 rule.

If the termination is 12/15/24, isn't the RBD 4/1/2025 so that the 2023 balance is out of the equation?

There is no prohibition on doing another DBP like the 401(k) successor plan restrictions, but make sure all the relevant circumstances concerning the termination of the first plan are legitimate and well documented, especially if the owners were under age 59 1/2 and the plan was in existence less than 10 years. Otherwise, IRS could possibly challenge the permanency of the first plan and view the termination and subsequent re-establishment as a circumvention of the in-service distribution rules.