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The title asks "must?" No, of course not. However, the employer's procedures for rehires probably do not differ from its procedures for new hires, so Yes. But more to the point, it would be enormously foolish to assume nothing has changed in this person's personal life "after several years".

The discretionary authority is generally to interpret the rules of the plan that may be ambiguous in a consistent manner not to make exceptions to the written terms of the Plan Document, that typically requires a plan amendment. This is not legal advise and I am not a lawyer.

Lincoln Financial has a good one on their Secure 2.0 website. https://www.lincolnfinancial.com/public/general/secureact It is labeled reference guide for DC Plans.

An important starting point for an ERISA-governed plan’s administrator or other fiduciary is: “[A] fiduciary shall discharge his duties with respect to a plan . . . in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this title [I] and title IV.” ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D). A plan’s governing document might grant the plan’s administrator some discretionary authority to construe or interpret ambiguities in the plan’s text. But that is not authority to deviate from what the plan provides. Further, if a governing document’s grant of discretionary authority to interpret the plan is, ostensibly, so wide that it would allow an administrator other fiduciary to ignore or vary a plan provision, a fiduciary is duty-bound not to apply that portion of the discretion that would be inconsistent with ERISA’s command: “Every employee benefit plan shall be established and maintained pursuant to a written instrument.” ERISA § 402(a)(1), 29 U.S.C. § 1102(a)(1). This is not advice to anyone.

https://www.irs.gov/pub/irs-tege/epchd704.pdf Have you checked out the IRS manual, if you look on 7-46 there is an ASG flowchart. I like it.

If you use a service provider’s materials, apply your own sense to a classification of a provision as mandatory or optional. Some service providers classify a SECURE 2019 or SECURE 2022 tax law change as “mandatory” for the business to provide services most customers likely call for, or that are essential to how the provider’s systems operate. For example, about the tax law change that permits a plan to provide for a § 401(a)(9) required beginning date an applicable age of 73 or 75, at least one big recordkeeper classified this as mandatory. But a plan may provide, without failing to meet § 401(a)(9), an applicable age of 72, 71, 70½, 70, or even younger (if it doesn’t provide an involuntary distribution before normal retirement age). So, I might classify the change to 73/75 as optional. By contrast, a provision about whether some beneficiaries must complete a distribution within ten years from the participant’s death might, depending on the plan’s other provisions, be needed to tax-qualify. Also, some of the service providers’ outlines don’t show completely or conspicuously an exception or variation for a governmental plan. If your work is about a governmental plan, consider that the State’s laws might restrain which provisions must, may, or must not be included or omitted. Those laws might include an enabling statute that grants, and limits, powers to establish and maintain a § 403(b) or other retirement plan. And it might include laws about collective bargaining or discussion with associations of employees and retirees. Those laws might make required or obligated a provision that under Federal tax law is optional. Further, consider that some provisions might be stated by an annuity contract or a custodial account, rather than in “the” plan document.

This is not the exact source I've seen before, but the Internal Revenue Manual warns agents to watch for impermissible CODAs in multiemployer MPPPs. IRM 7.11.6.6.10.2 (09-18-2015) CODAs in Money Purchase Plans (1)The only money purchase plans permitted to include a CODA are pre-ERISA plans (existed June 27, 1974 and included the CODA at that time). See IRC 401(k)(1). (2)Plans or CBAs may contain provisions that, although not described as a CODA, result in elective deferrals. Unless this arrangement is part of a profit-sharing plan and satisfies the requirements of IRC 401(k), the CODA isn't qualified. See IRC 401(k)(1). (3)Scrutinize multi-employer plans that incorporate tiered contribution or allocation formulas to determine whether these formulas provide an election. a.In most cases, when an employee changes classes/tiers, the plan makes an increased contribution and decreases the participant's wages by the same amount. b.If the participant may elect to reduce their wages and increase their contribution, then the plan is, in effect, a cash or deferred arrangement. (4)To detect this type of arrangement, read the language in the CBAs and in the plan. (5)If the language is incorporated by reference, be sure that the incorporation follows the rules of IRM 7.11.6.3, Incorporating Auxiliary Documents by Reference. (6)The tiered annuity contribution formula could also fail the definitely determinable rule of 26 CFR 1.401-1(b)(1)(i) if the tiers are determined by an individual or party other than the employee participant. The plan may not allow discretion for contributions to the plan, and the contribution must be the employees' decision. (7)If you find a post-ERISA money purchase plan with a CODA, disqualify the plan unless: a.It's an initial plan submitted within its first remedial amendment period and the plan is amended to remove the CODA. b.The taxpayer enters the Closing Agreement Program. See IRM 7.11.8, EP Determinations Closing Agreement Program. c.The taxpayer is entitled to IRC 7805(b) relief. (8)These arrangements are often difficult to detect and tend to be at least partially contained in the CBA. See IRM Exhibit 7.11.6-1, Sample Language of a CODA in a Money Purchase Plan, for sample language which may indicate that a CODA is present.

Keep in mind that plan documents have default beneficiary provisions and the Plan Administrator cannot force a participant to make an affirmative elective. Also keep in mind that a terminated participant who has an accrued benefit can change their beneficiary designation while they remain terminated. It is good practice to encourage participants to make affirmative elections, and to periodically remind participants to review their affirmative elections. Some plans have generic communications that center around how life events - including rehire - that can impact benefits and those communications include the reminder to update beneficiaries.

And since I said "said" so many times in my post; that's all I've got to say! 🐵

At this risk of sounding like I'm just trying to sell our wares: Our firm wrote a text on correction programs for ERISApedia that can be purchased. If interested, go to ERISApedia.com. We also did a video certification program for NIPA (nipa.org). Having said that, I really recommend that you at least associate with someone who knows how to do plan correction work on your first venture into VCP-land. There are a lot of arcane rules about the filing, as well as things that people have learned over time that are good ideas or bad ideas for ways to approach the correction programs. Again, if you think that I am making this recommendation just to get business, contact me, and I'll refer you to another law firm for assistance. I'd rather send you in the right direction. Last but not least, kudos to Justanotheradmin for suggesting that the plan be fixed prospectively. Stopping the bleeding is one of the "best practices" things that people who do a lot of correction work always preach. Good luck!

A good starting point is the IRS web site: https://www.irs.gov/retirement-plans/voluntary-correction-program-general-description This site also will lead to some pages specific to 403(b) plans. For example: https://www.irs.gov/retirement-plans/403b-plan-fix-it-guide If you are looking for a gold-standard resource, among your best bets are the ERISA Outline Book, Wolters Kluwer, or ERISApedia. Be prepared to pay for a subscription, but the value of the guidance and time-savings are worth every penny.

An employer terminating participation in a MEP or PEP does not constitute a distributable event under the 401(k) distribution rules -- no employee has terminated employment with the employer, and the plan, itself is not terminated. The departing employer should get a spin-off of the plan benefits from the first MEP (no, this is ot "automatic"), and then merge that into the MEP with the 2nd group ... or she can put the spinoff into a new 401(k) plan sponsored by her corporation, and then terminate that plan. This is probably one of the biggest disadvantages of MEP/PEPs -- the exit strategy is not a cakewalk.

S2.0 section 301 added Code 414(aa)(4) “(4) OBSERVANCE OF BENEFIT LIMITATIONS.—Notwithstanding paragraph (1), a plan to which paragraph (1) applies shall observe any limitations imposed on it by section 401(a)(17) or 415. The plan may enforce such limitations using any method approved by the Secretary for recouping benefits previously paid or allocations previously made in excess of such limitations." If the issue is the individuals received an allocation formula that incorrectly included compensation in excess of the compensation limit, then the plan should take steps to recoup the excess amounts. If the allocation of excess amounts affected other participants (e.g., they received less because the total allocation basis was overstated), then these participants need to be made whole. Given that the individuals are very highly paid and very likely HCEs, and possibly could have been owners, officers or other disqualified persons listed in Code 4975(e)(2), failing to recoup the overpayment can lead to a host of other compliance issues.

Doesn't the plan-termination amendment that already was done provide that the final distribution that ends the plan is a single-sum distribution of the participant's, beneficiary's, or alternate payee's whole account? Else, how would one end a plan?

The correction for a missed deferral opportunity in a plan with automatic enrollment is extremely liberal with plans having up to 9-1/2 months after plan year end to start deferrals before penalties kick in. Without the AE feature, the charity will at best have 3 months to offer enrollment to and start deferrals for eligible employees before some significant corrections are required. If they are not up to the task of managing eligibility and enrollment, the AE feature provides some time for their service providers to keep them out of serious trouble. Just a thought.

Many plans provide an involuntary distribution on a participant’s small ($1,000, $5,000, or $7,000) balance. But many plans do not provide an involuntary distribution on a beneficiary’s account, except as needed to meet a § 401(a)(9) required beginning date or minimum distribution, including a continued minimum distribution that began before the participant’s death. For the situation you’re working on, what does the plan’s governing document provide? This is not advice to anyone.

You say the plan covered nuns. Was it a church plan? If so, it is not required to file Forms 5500 or 8955 unless it elected to be covered by ERISA, which very few church plans do.