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And amendment can't be effective for the year if it has a prohibited cutback of benefits. Adding after-tax is an expansion of benefits so should be fine. Though it will be subject to ACP testing, just so you are aware in case you were not. The second part is a bit trickier if you can do it or not. If anyone is entitled to an allocation under the old formula you won't be able to change the formula until next year. However, if no one has yet earned the right to the allocation formula then you could amend this year. generally speaking if your current plans has a last day requirement or an hours requirement that no one has yet met you could do the amendment effective in the current year, provided it's adopted before anyone has accrued a right to the old formula. Safe harbor 401(k) plans have a few additional levels of hoops to satisfy where you might not be able to make the change even with a last day requirement, you'd have to double check on that one if that's you situation.

Keep in mind that in-service withdrawals, including hardship withdrawals, are not required to be permitted in the plan document. You are going to have to look at the plan provisions to see what is or is not permissible for this employer's plan. Most likely, you will not find a restriction in the plan that in-service withdrawals are not available to participants with outstanding loans. Until recently, the hardship withdrawal rules required a participant to take a loan before taking a hardship withdrawal (assuming loans were available under the plan and the taking of the loan itself was not causing additional hardship). While no directly relevant to this situation, it does illustrate that taking an in-service type withdrawal while having a loan was and is permissible. The amount of a loan @Bill Presson notes is based on vested amount in the participant's accounts available at the time the loan is taken. There is a strategy with taking a loan first and then taking an in-service withdrawal. It maximizes the amount available when the loan is taken and the loan is a not distributable event, does not incur potential early withdrawal penalties, and does allow for the opportunity to repay the loan. The amount of the subsequent in-service withdrawal was less and hence the adverse consequences of an in-service withdrawal were less.

Loans only have to meet the 50% criterion at issue. After that, it’s irrelevant.

If you want help, you're going to have to provide a lot more information than you have provided. There are about 175, 000 pension and retirement plans in the United States and they do not all have the same procedures. I'm not sure what OC means in your post but I assume it's "other counsel". It is clear that your lawyer doesn't have a clue. If you want to call me at 301-947-0500 I can very likely tell you what you need to do and send your attorney a template for a motion asking the court to enter the qdro without the approval of your former spouse and or his or her attorney. You are going to need to have in hand the exact name of the 401K plan and the Judgment of Absolute Divorce that the court signed giving you an interest in that plan. David Goldberg

i get this strategy, I'm just questioning the age at which it's being done.

With Roth accounts in 401(k) plans not being subject to the RMD rules, some people without other taxable income other than Social Security are looking to reduce prospective current year income below the threshold that triggers taxation of their Social Security benefits. Add in the potential exemption of earnings from taxable income from the Roth accounts, this may be an attractive option for someone who is betting on living longer than their average life expectancy. There also are individuals who see the sun setting in 2025 on the Tax Cuts and Jobs Act provisions and they are anticipating a hike in their personal rates.

We aren't helping the poor person who asked the original question now but.... The no later provision is pretty common and when you get into the document and/or distribution policy it is pretty clear the sponsor gets to decide when the first election will be offered. Once the offer is made the employee then elects. You seem to understand the installment provision correctly. Your example of a $266,000 balance is correct. The reason it says greater is because until you get to the very large balances you must pay within 5 years. So if an balance is $1,350,000 you would get 5 installments of $270,000 and that would be paid instead of the $265,000. In the extreme if a person had for example a $10,000,000 balance you could pay $1,000,000 over 10 years. It meets the law and is greater than $265,000.