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Congress seems unlikely this week to legislate anything for retirement plans. In the 1,547 pages of what might become this week’s appropriations, here’s what so far I see: 555 pages with provisions that affect health care or health plans: division E—the “Health Improvements, Extenders, and Reauthorizations Act”. That includes additions to, and amendments of, the Employee Retirement Income Security Act of 1974. Those include new and amended text in ERISA § 408(b)(2), some of which might affect how that prohibited-transaction exemption applies regarding retirement plans. Only eight amendments of the Internal Revenue Code, none of which refers to a retirement plan (unless a retirement plan engages a pharmacy benefit manager). An amendment of the Defense Production Act of 1950 would prohibit, and impose penalties on, a covered national security transaction in a prohibited technology. https://docs.house.gov/billsthisweek/20241216/CR.pdf The next government-shutdown threat would be March 14, 2025.

You answered your own question. They are domestic partners, not spouses. It is not a one-participant plan. File on 5500-SF, and yes they need a bond.

If you’re explaining to a public-school employer a choice between a correction submission that might involve an IRS user fee and a representative’s fee and a self-correction that might involve neither, consider that a public-school employer often lacks a budget to pay, or even legal authority to incur, an expense beyond the incidental expense of determining employees’ elected contributions and remitting them to the § 403(b) insurers and custodians. This is not advice to anyone.

What QDROphile said. If any claim exists for the AP/estate, it would be external to the plan and possibly a liability of the participant - BUT, the plan has no obligation or authority to dig into this further. No DRO means no DRO.

I think you're looking for 29 CFR 2510.3-101, which defines "plan assets." There's a lot in that rule, but generally the corporate assets of an "operating company" are not considered plan assets so can be pledged for a bank loan to the company without causing a PT.

Let's assume as Peter notes that participant self-certification is not available. Generally, taking a hardship withdrawal to make loan repayments such as for delinquent mortgages (with the threat of eviction) financially does more harm than good. The withdrawal is taxable and often triggers the early distribution excise tax. Student loan provider haves many alternatives available to help individuals who have difficulty making loan repayments. It would be in the better interests of the participant to encourage them to pursue those alternatives before tapping into the plan. Student loans commonly are written for expenses for an upcoming academic year. It is not uncommon for an individual to have multiple loans that may be consolidated later. An administrator who is parsing the safe harbor language could conclude that a student loan repayment on a loan for a prior academic year does not meet the requirement that the hardship is for an expense associated with the next 12 months of expenses. It also is notable that paying off credit card debt by itself is not a safe harbor hardship reason, but having sufficient available credit on a credit card to cover a heavy and immediate financial need is a reason to deny a hardship. This quirk merely highlights that the safe harbor hardships are not intended to be a universal solutions for relieving debt.

Top of page 11 of 5500-SF 2023 instructions: The plan (a) covered fewer than 100 participants at the beginning of the plan year 2023, *or* (b) under 29 CFR 2520.103-1(d) was eligible to and filed as a small plan for plan year 2022 and did not cover more than 120 participants at the beginning of plan year 2023. As long as your plan filed 5500-SF in 2024 you could file a 5500-SF in 2025 if the plan had less than 120 participants.

If the plan does not yet provide that claims for a hardship distribution are decided by the participant’s self-certification: That the worker missed a student loan repayment suggests she might have used money she budgeted for that purpose on something else. If so, the something else might fit a hardship condition. This is not advice to anyone.

To simplify, let’s assume the Labor department’s rule, Definition of “plan assets”—participant contributions, is a legislative rule that sets a binding interpretation of the statute. Yet, that rule isn’t a bright-line rule. Consider the rule’s general rule: “[T]he assets of the plan include amounts . . . that a participant has withheld from his wages by an employer, for contribution or repayment of a participant loan to the plan, as of the earliest date on which such contributions or repayments can reasonably be segregated from the employer's general assets.” 29 C.F.R. § 2510.3-102(a)(1). [Not my formatting.] The subparagraph about the seventh business day is a safe-harbor way to show one met the general rule. Under this safe harbor, an amount so “deposited with [the] plan”—itself an ambiguous phrase—is “deemed to be contributed or repaid to such plan on the earliest date on which such contributions or participant loan repayments can reasonably be segregated from the employer’s general assets.” 29 C.F.R. § 2510.3-102(a)(2)(i). That safe harbor is not the only way to show adherence to the general rule. 29 C.F.R. § 2510.3-102(a)(2)(ii). Even for an amount not yet credited to participants’ individual accounts, or even not yet collected in a bank account of the plan’s trustee or its custodian, a fiduciary might loyally and prudently act in a way that treats the amount as plan assets segregated from the employer’s assets. The plan’s administrator might want advice about whether, considering the particular facts and surrounding circumstances, the participant-contribution amount was segregated from the employer’s assets as soon as that amount could reasonably be segregated from the employer's assets. That an employer usually pays over participant-contribution amounts promptly and encountered a difficulty when adapting to a newly engaged service provider might suggest why what the employer did to segregate the participant-contribution amount from the employer’s assets was reasonable in the circumstances. 29 C.F.R. § 2510.3-102 https://www.ecfr.gov/current/title-29/section-2510.3-102. The Form 550 Part V line 10a question is: “Was there a failure to transmit to the plan any participant contributions within the time period described in 29 CFR 2510.3-102?” If a plan’s administrator decides to answer No on that question, it might make a contemporaneous record of its reasoning, to help show a sincere and prudent effort to report truthfully. This is not advice to anyone.

Restore or not is spelled out in your Plan Document/Adoption Agreement. It is a choice in the AA.