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If they're in the testing, and they're already benefiting from the non-elective safe harbor, then they have to get at least the gateway minimum via additional profit sharing allocations. Check your plan document, many pre-approved documents will have a line in the BPD indicating that anyone who has to get gateway, will get gateway even if it conflicts with other plan provisions.

Another voice questioning how all participant's have an interest in the real estate if this is really a pooled plan. If it is a pooled plan the participants are beneficiaries in the trust and they have an interest in that on each asset. I have seen this kind of transaction done before also, but a good lawyer is simply a must.

It sucks but it happens. Two fixes 1. Refund the money to the participant in 2025 and issue a 1099r. Do not change the w-2. 2. Adopt an early entry amendment under the EPCRS self correction program and document the issue and the fix. This would leave the money in the plan.

Yes vesting service continues and vested percentage will increase and by virtue of the plans merging there should be amendment to A for needed B provisions unless there is generic language in A that accommodates.

If the representative at Edward Jones is using the word "QDRO" they don't know what they are talking about. Talk to someone higher up in the company who understand that the acronym "QDRO" stands for QUALIFIED Domestic Relations Order" and that "QUALIFIED" meana qualified under ERISA and that IRAs are not governed by ERISA. The problem is that you may not be able to get a post-mortem "Retirement Benefits Order" and may have to rely on the language of the IRA plan documents.

Failsafe provisions generally address 410(b) rather than 401(a)(4). That's the first thing to clear up - whether you have insufficient people, versus insufficient benefits to those people. Gateway minimums are required for anyone sharing in the nonelective contributions of the employer. (That means, in for a penny, in for a pound, and if you have a 3% SH nonelective, that means they're already benefiting some, if not yet enough to meet that gateway level.) If your plan allocates individual contributions by person (rather than one big contribution to be shared pro rata, if your plan says that instead - I'm referencing individual allocation classes with 1 person in each class) then you can adjust people with more individually. That's the typical fix if you're passing coverage but not non-discrimination....increase NHCE benefits as necessary for the 401a4 testing.

Also, the retirement plan needs a fiduciary who is independent of the decedent, the decedent’s surviving spouse, the decedent’s children, and any anyone else who might be an heir, legatee, or beneficiary who might take from the decedent’s estate or trust.

We worked with a client in a very similar situation and their ERISA legal counsel. The assets of the plan were not participant-directed and there were no ties between the real estate and any of the plan fiduciaries. The appreciation on the property was included each year in the allocation of trust income to all participants. The facts including a current appraisal of the property were communicated to each participant to get their concurrence with allowing an in-kind distribution of the real estate. We understood the participants essentially did not want their retirement accounts tied up with an illiquid investment and they signed off on the transaction. This was all worked out with legal counsel guiding the process and drafting the related communications and agreements. Definitely, do not try this without active involvement of legal counsel at every step.

I felt dirty just submitting the question. 😜

This is wallowing in prohibited transaction issues and I strongly advise you to wait on the ERISA attorney.

Amazing how little some people pay attention. The snark in me wants tos ay the remedy (for stupidity) is termination, but, I'll refrain. We have on every statement, every confirm, the landing page for web access and other places a statement that after TWO notifications of something, it is presumed ratified by the participant. At most, two bites would be the second statement post the action, but generally the first bite is the confirm, and the second would be the next quarterly statement. Never had to defend that, and I'm not sure I want to, but it has caused some people, including lawyers, to back-off of a claim (lest they be embarrassed by lack of attention they had in a "participant directed" plan.)

Post-nups are a thing, and should be a standard part of any family law attorney that prepares pre-nups. As would be updating beneficiary forms both before and after the marriage occurs. The soon-to-be spouse cannot waive a plan benefit they do not yet have rights to. They don't have rights under a qualified plan until they are actually married. The plan does not (cannot) look at any pre-nup. So once the spouse actually has rights under the plan - that's when they can sign a waiver of the benefit on an updated beneficiary designation.