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If it was done in 2025 you'll have a 1099-R at year end. If you are reconciling 2024 and they are just telling you about this now, they need late 2024, 1099-Rs and possible amended tax returns if they already filed. Gotta love clients that rely of Google for their plan advice instead of making a phone call to the consultant who probably knows the correct answer, even if it's not the one they want to hear.

The good ol' IRS Rollover Chart explains it clearly: Roll from: Qualified Plan (pre-tax) Roll to: Roth IRA Allowed: Yes (with a footnote) Footnote says: Must include in income.

A TSP transfer can be implemented with a RBCO even though the parties are not yet divorced. A "legal separation" is sufficient - see 5 CFR Part 1653, Subpart A, Sections 1653.1(b) and 1653.5(i). The following laws and regulations make it clear that a FERS COAP can be entered based on "legal separation”: 5 USC Sections 8467(a), 8445(f), 8424(b)(1)(B), 5 CFR 838.101(a)(1), 828.103, 8382.201(a), 838.236(b), 838,401(a), and 838.701(a). Pursuant to 26 USC 408(6): (6)Transfer of account incident to divorce The transfer of an individual’s interest in an individual retirement account or an individual retirement annuity to his spouse or former spouse under a divorce or separation instrument described in clause (i) of section 121(d)(3)(C) is not to be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest at the time of the transfer is to be treated as an individual retirement account of such spouse, and not of such individual. Thereafter such account or annuity for purposes of this subtitle is to be treated as maintained for the benefit of such spouse." Section 121(d)(3)(C)(i) provides: "C) Divorce or separation instrument For purposes of this paragraph, the term “divorce or separation instrument” means— (i) a decree of divorce or separate maintenance or a written instrument incident to such a decree," Under ERISA the question seems to be addressed only at 26 USC 414(p)(1)(B): "(B) Domestic relations order The term “domestic relations order” means any judgment, decree, or order (including approval of a property settlement agreement) which — (i)relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and (ii)is made pursuant to a State or Tribal domestic relations law (including a community property law)." Since 1842 a grounds in Maryland for what we later called a "limited divorce" was a divorce a mensa et throro (from bed and board). It was a document that would have met the definition above and would have have supported the entry of a QDRO prior to the final divorce. Maryland recently did away with a "limited divorce" and the State law provides that only in connection with an absolute divorce or an annulment can the court determine what is "marital property", the value of such marital property, and make an equitable adjustment by a monetary award that include the entry of a QDRO. I have been apoplectic since there are so many negative consequences of delaying the entry of a QDRO. See attached. In South Carolina, they have what they call a "Decree of Separate Support and Maintenance" that will be entered by the Court adopting, ratifying and incorporating a "Complete Support and Property Settlement Agreement" executed by the parties. It is a "legal separation" accordance with South Carolina case law. The parties must still remain apart to some statutory period of time before they are eligible for a Final Decree of Divorce. So my question is: Do you know of any other ERISA or IRS statutory authority that addresses the interplay between "legal separation" and the entry of a QDRO, or case law addressing the issue. Thanks, David CONSEQUENCES OF DELAY 02-14-2025.pdf

Here’s a hyperlink to Nevada Revised Statutes chapter 353D—Nevada Employee Savings Trust. https://www.leg.state.nv.us/nrs/NRS-353D.html#NRS353DSec070 Nev. Rev. Stat. § 353D.070 “Covered employer” means an employer that: 1. Employs more than five persons in this State; 2. Has been in business for at least 36 months; and 3. Has not maintained a tax-favored retirement plan for its employees or has not done so in an effective form and operation at any time within the current calendar year or 3 immediately preceding calendar years. Nev. Rev. Stat. § 353D.150 “Tax-favored retirement plan” means a retirement plan that is tax-qualified under or is described in and satisfies the requirements of section 401(a), 401(k), 403(a), 403(b), 408(k) or 408(p) of the Internal Revenue Code[.]

Depends on the plan document. All of them that I've seen (or remember) do have a spot for this. Usually either early on in the Adoption Agreement, or in an Appendix. In our documents, for example - the 401(k) doc it is on page one of Appendix A, whereas for the new Cycle 2 403(b), it is on page three of the Adoption Agreement. I'm sure you'll find it if you look through the AA and/or Appendices.

It might be prudent to verify exactly when this status occurred; i.e., if he changed to 1099-status on 1/1/25, that would differ from that status being effective sometime before that date.

In lawyers’ and law firms’ lingo, the label “of counsel” has no one settled meaning. It can relate to any of many kinds of relationships. It can, in context, refer to a current partner, a retired partner, an employee, or a nonemployee contractor. Does the of-counsel lawyer provide any service? Even having a lunch conversation with a client’s inside counsel or executive to help keep the client content with the relationship might be a valuable service. Don’t reflexively assume this person is retired. Suggest the plan’s administrator decide whether the participant is or isn’t retired (in the sense Internal Revenue Code § 401(a)(9) uses that word). If the law firm feels unready to interpret § 401(a)(9) and how it applies regarding the facts, you can suggest that the firm might get another lawyer’s advice.

yes, if there is a cchange in both the firm and the actuary

FWIW, I have heard some actuaries argue that if you are bringing someone in early that has not met the age/service requirements for 401a26 purposes, you need to expand the number in your 401a26 count to include those similarly situated ees you are not bringing in. Also, if top heavy you would want to bring them into both plans unless you want to give the TH Minimum in the DB, which is probably not want you would want to do.