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Sounds like a plan merger to me. (Im assuming they are not leaving a MEP or PEP with you which would add some complexity) Yes, because you have to let the IRS/DOL know to not expect another 5500-SF for this EIN+PN. Yes. Depends on service agreement with the client. Our default is that prior provider will file the final 5500 since they have the data, but we will do it for them if the client/provider relationship has soured to the point where the prior provider says "not my problem" or if the client asks us to do it.

...which would be a significant problem in a DB plan, as opposed to an IRA or DC plan. Based on the 2025 limits, the 415 maximum lump sum is about $3.5 million. If the husband and wife are the only participants and the assets grew to $5 billion, then they would be stuck with $4.993 billion that could not be distributed, but would be a taxable reversion to the employer, plus subject to $2.5 billion in excise tax.

This is your first misstep and misunderstanding: ”When we are on notice of a divorce through the death certificate, we ask the estate or beneficiary to provide a divorce decree or separation agreement to determine if there is a possible DRO … .” Setting aside the mistaken position published by the DOL about being on notice concerning a potential DRO, the plan is not on notice about a potential DRO when the “notice” is of a divorce from a death certificate that is not presented in connection with some other form of notice expressly about an existing or prospective domestic relations order. Divorce, by itself, means nothing under ERISA 206(d)(3) and does not to require the plan to do anything. The plan has to keep an eye out for notice about a prospective domestic relations order that could affect plan interests, and the plan’s written QDRO procedures should address the detail. Shame on the plan documents you are working with. Don’t go looking for trouble. You will find it in your actions, not in duties that don’t exist. In particular, if you can ascertain that the divorce is a year or more in the past, you should have complete comfort about proceeding with the normal processing relating to payment of beneficiaries. Especially in defined benefit plans, the participant’s former spouse is in a race against death and remarriage. I am not suggesting that death of the participant precludes a QDRO, but time works against a would-be alternate payee and the plan is protected against dereliction. I also think that you are overly concerned that somewhere in ancient history the plan did not attend to a domestic relations order or an acceptable notice about prospects of a domestic relations order. The passage of time will also protect the plan, even in the case of the plan’s dereliction. Would-be alternate payees have an obligation to prosecute their claims to benefits. I would not go too far back in my search for trouble on that account, either. I am not faulting the goodwill and good intentions of your concerns. However, fiduciaries get into trouble by trying to do too much and going beyond the bounds of their duties and responsibilities while trying to help, especially when there is potential contest over benefits. Unfortunately, bad things like those you fear do happen to alternate payees, usually through the fault of their incompetent lawyers.

Point taken. I withdraw by comment.

Overly legal argument, but I would think no trust can exist until the plan is effective. i.e. You can't deposit into a plan until there is a plan. This might be an indirect rollover. The rollover wouldn't be complete in my mind until you had a effective plan document. However, this is not advice.

ERISA § 206(d)(3) [29 U.S.C. § 1056(d)(3)] suggests a plan administrator’s responsibility to do something other than or beyond what the plan’s administration otherwise calls for when the administrator has not received a court order does not begin until the administrator has received a court order. ERISA § 206(d)(3)(H)’s command to separately account for what could become payable to an alternate payee if an order is a qualified order does not begin until the plan receives a domestic-relations order. http://uscode.house.gov/view.xhtml?req=(title:29 section:1056 edition:prelim) OR (granuleid:USC-prelim-title29-section1056)&f=treesort&edition=prelim&num=0&jumpTo=true Yet, in considering what to do in a particular situation, an administrator might read, interpret, and consider carefully, including with the administrator’s lawyers’ advice, the plan’s governing documents, the written QDRO procedures, and alternatives for risk-management steps. Also, one might carefully search the plan’s and maybe the employer’s records to confirm not only that no court order was received, but also that no plan fiduciary communicated anything a could-be alternate payee might allege one relied on. When I advise a plan’s administrator about a beneficiary or domestic-relations situation, I sometimes suggest some protections against the possibility that other actors, including courts, often misapply the law. This is not advice to anyone.

Without answering your reporting questions: Don’t assume the multiple-employer plan’s administrator would accept responsibility for anything beyond the MEP’s Form 5500 report. Consider carefully what services (if any) your service agreement or engagement letter provides about reporting on the single-employer plan’s accounting period of January 1, 2024 to November dd, 2024. Other BenefitsLink neighbors might tell you what customs of the trade have developed.

One would think so, but consider that Peter Thiel turned a $2,000 balance in a Roth IRA into $5,000,000,000 (yes, billion) and it's not taxable when distributed.

I would think having a potentially volatile asset in a DB plan might not be advisable.

Part of your question was is it advisable to purchase another RE investment. If their financial portfolio outside the plan is made up of a variety of other investments, they may well be quite diversified and the investment in RE inside the plan could be a fraction of their total financial situation. Considering solely the assets inside the plan may be myopic.

For some definition of "fun"... 🤣

Consider whether the 130 and 120 measures are truly irreconcilable. If an employee works fewer than 130 hours yet more than 120 hours, Treasury’s rule tells an employer to count no more than 120 of those hours, divide by 120, and count one full-time-equivalent employee. The Treasury’s explanation of the rulemaking suggests some possibility that a choice to use 120 hours might relate in part to information-reporting and other administration needs, with a recognition that some months have as few as 28 days. https://www.govinfo.gov/content/pkg/FR-2014-02-12/pdf/2014-03082.pdf. Consider that on this point the Treasury regulations might not have been made under Congress’s delegation. If so, a Federal court need not defer to the Treasury’s interpretation. Yet, an employer that takes a tax-reporting position or a tax-return position (including deciding not to file an excise tax return) that does not follow the regulations would want a lawyer’s or other IRS-recognized practitioner’s carefully written advice to show good faith and reasonable cause for the positions taken. This is not advice to anyone.

Interesting, I see your point now. The IRS appears to do the same thing here: https://www.irs.gov/affordable-care-act/employers/determining-if-an-employer-is-an-applicable-large-employer That one is a mystery to me. It doesn't make sense that the ALE status FTE determination would be based at 120 if the full-time definition for the same purpose wasn't also based on the same 120 threshold. On top of the basic confusion/complexity of the dual thresholds for the same determination, you would also have a weird situation for 120-130 hour employees where they would seem to be counted as a non-full-time employee but greater than 1 FTE. The ABA IRS response you quoted is the way I have always understood it to work.

The 415(b) dollar limit is adjusted for benefit commencement dates later than age 65 using the 417(e) applicable mortality table and 5% interest. Note that the 100% of compensation limit is not adjusted. So by 85 (much earlier than that, in fact) the compensation limit will be lower than the adjusted dollar limit and will control.

Because the plan has automatic contribution features, I think the special safe harbor correction method would apply. The term "Employee Elective Deferral Failure" is defined simply as "a failure to implement elective deferrals correctly". I don't see that a different rule applies if the failure occurs after the initial enrollment.