I worked for Ford for 14 years and have a small pension approx $800.  I have been divorced for 20 years.  And remarried 7 years ago.  The divorce decree specifies the QDRO in it for Ford 401K which was paid out to my ex at the time of divorce, and in the decree it also specifies that the pension benefits should be split 50% with my ex-wife.  She never filed for formal QDRO paperwork for pension as far as I know.  I am eligible to commence my retirement in Nov of 2025.  So I submitted my request.  The plan admin told me that usually it takes 3 days to send paperwork to be signed in, but due to the divorce and to investigate if any QDRO exists, it will take 5 weeks.  

Does Ford GRP go ahead automatically and enforces QDRO for pension per the divorce decree, or do they have to have a QDRO paper filed?  Does anyone know?

Can she go ahead and file for a QDRO now after 20 years?

If the plan admin has a QDRO on file, shouldn't I, been noticed about it?

A client defers $23,500 as Roth in 2025 and will have an employer contribution of $46,500 ($10,500 SH nonelective and $36,000 PS.) Can he elect Roth on a portion of his employer contribution or does it have to be the entire money source for that year?  Example - he might want to have $20,000 of his employer made as Roth.  Seems that should be possible with an election form. I realize the Roth conversion option may be a better and simpler option.  

Thank you,

Tom

Has anyone tried to do the same calculation of VFCP earnings in the DOL website using an excel? I'm trying to create one based on the IRC 6621 Table of Interest Rates, IRS Factors (3-13%) | Leap Year, IRS Factors (14-24%) | Leap Year but I can't seem to get the exact amount. 

Combo plan, top heavy and top heavy provided by DC plan.

DC plan has 3% non-elective SH

DB frozen but a class of employees are excluded. There will be no =accrual for 2025.

The document states TH is provided by DC and nothing else.

What is the TH requirement for 2025? 3%?

We are the plan administrator for a client that sponsors a 401(k) plan with about 30 participants. We do not administer cafeteria plans or anything outside of qualified plans.

I know it is popular for an employer to have a high deductible insurance plan for employees and then also offer HSA to all employees.

Is it possible for just one employee to establish and maintain their own HSA? The employer will not be providing HSAs to employees.

Question:  Is this possible? If so, I would think the employee would need to meet the requirements (be covered by an insurance plan that qualifies as a high deductible policy).

Which IRA custodian does everyone use for force out IRA's?

Employer sponsors a 401(k) Plan. 

Certain (now former) employees form their own P.A.s and sign joinder agreements so they can continue to participate in Employer's 401(k) Plan.

Former employees want to keep their P.A. payroll deferrals semi monthly but actually deposit the maximum contribution via a single check from the PA before the deferrals occur.

Is this a prohibited transaction?

I have searched various websites without much help. The form 5500 site only goes back to 2010. If a Plan was supposed to terminate in the early 2000’s but assets were never brought to $0.00, how do you find this Plan? 

I want to be 100% for this particular client who loves Roth.  I realize the plan could allow for Roth conversion as an option.  But he may prefer to fund his employer contribution as Roth.  I know it accomplishes the same thing but that might feel better to him.  He is a sole proprietor and maximizes deferral and employer at 415.  So I assume he could elect Roth for his safe harbor nonelective and profit sharing.  I know it will be troublesome to have to allow this option for his few employees also.  The plan is not on a record keeping platform so we don't have to worry about any limitation there.  The plan already provides for employee Roth but not the employer Roth of course since that is SECURE 2.0.

Sound ok?  Thanks

Tom

Self-check due to severe brain cramp - so, suppose a plan has eligibility requirements of 3 consecutive months with at least 250 hours. Let's make it easier and say age 21. The plan also excludes part-time employees. Part-time employees are DEFINED as per diem employees - they are not defined by hours.

All the "part time" employees work <1,000 hours in a year.

So, since the LTPT rules do not permit an exclusion category as a "proxy" for avoiding the LTPT rules based on an age or service condition, it would seem that this exclusion class is not valid for avoiding LTPT deferral eligibility if such an employee satisfies the 2 consecutive year/500 -999 hour/age 21 requirements, although it should be ok for employer contributions, subject to testing.

Or, if someone satisfies the "normal" eligibility of 3 months/250 hours, even though they are excluded, do they NEVER become LTPT, because they have satisfied the less stringent normal eligibility requirements? 

What are the options for adding a student loan match now in 2025 to a non-safe harbor calendar year plan? The plan has a payroll period based match. Would the student loan match have to start mid year for example 5/1/25 in order to be payroll based, even though it can be funded annually after 2025. I am thinking if they want to make the student loan match retroactive to 1/1/25 they would need to amend the match formula for all participants - regular deferrals and student loan repayments - to be an annual match and look at compensation and deferrals retro to 1/1/25. IRS Notice 2024-63 indicates the match has to be at the same rate. Thoughts?

A potential client wants to offer health insurance for the first time. While they already have employees, most are covered by either spouses or COBRA at this time. The company wants to offer a traditional HRA for any employees who want to continue their current plans until the end of the year (so as not to incur a new accumulator with the new plan). Can an employer offer a traditional HRA selectively to these employees who choose NOT to participate in the newly offered employer-sponsored plan?

I have a plan sponsor who received a request for plan documents for the attorney (looking for plan mis-management) on behalf of a former participant - she was paid out in 2022 and has no account balance. Is a sponsor required to provide plan documents for the period of time the former participant was in the plan - for example documents covering 2019-2022 plan years when they were an active participant? In my reading of ERISA and DOL regulations I only see references to "participant" or beneficiary, which I interpret to mean an individual with an account balance.

Thank you.

ERISA 104(b)(4)

(4) The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated. The administrator may make a reasonable charge to cover the cost of furnishing such complete copies. The Secretary may by regulation prescribe the maximum amount which will constitute a reasonable charge under the preceding sentence.

DOL Reg. 2510.3-3(d) -

(ii) An individual is not a participant covered under an employee pension plan or a beneficiary receiving benefits under an employee pension plan if-

(A) The entire benefit rights of the individual-

(1) Are fully guaranteed by an insurance company, insurance service or insurance organization licensed to do business in a State, and are legally enforceable by the sole choice of the individual against the insurance company, insurance service or insurance organization; and

(2) A contract, policy or certificate describing the benefits to which the individual is entitled under the plan has been issued to the individual; or

(B) The individual has received from the plan a lump-sum distribution or a series of distributions of cash or other property which represents the balance of his or her credit under the plan.

Plan sponsor fails ADP/ACP testing for the 1/1/2024 to 12/31/2024 plan year and refunds are issued to HCEs on 3/1/2025 (refunds issued by the plan's recordkeeper).

On 4/1/2025, the plan sponsor realizes that they mistakenly approved the wrong test and intended to rely on a permissively disaggregated ADP/ACP test (disaggregating otherwise excludable employees). The permissively disaggregated test still failed, but had better results and less refunds to HCEs.

Any idea how the plan sponsor goes about this given that refunds have already been issued and cashed? If they intend on relying on the permissively disaggregated results, then are the original refunds deemed impermissible distributions? Do they try to collect the overpayments from the HCEs by following the EPCRS/Secure 2.0 overpayment guidance?

For example - assume HCE Jane received an ADP refund on 3/1/2025 in the amount of $1,500 and cashed the check. But, based on the results of the permissively disaggregated test, her ADP refund was only $800. Does the plan sponsor follow the overpayment guidance in terms of dealing with the $700 "overpayment"?

I have a Nevada client that has had a 401k plan for a few decades. They are concerned that they may have to amend their 401k to incorporate all the provision of the new Nevada state program (e.g. auto enroll). I think they are exempt since they already have a plan. But the way they read it, the exemption is only valid if their plan meets all the provisions of the Nevada state plan.

Can anyone confirm the proper interpretation?

Thanks, Greg

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

We have a spinoff of a grandfathered PE from a grandfathered plan into a new spinoff plan.  I don't think MEP/PEP/SEP matters here but help me if that's not right.

That spinoff plan will be 001 for the EIN with a 1/1/2025 original effective date.  Assuming that’s the right original effective date for the spinoff plan (as compared to the original adoption date of the PE into the grandfathered plan…)

Where/how does the document distinguish this grandfathered 1/1/2025 plan from a new non-grandfathered 1/1/2025 plan?  In other words, where/how do we inform the participants/IRS/the world that this plan is NOT subject to the EACA mandate?

I have a 401k plan where the investments were ppt directed until October 2024. The plan switched to "pooled" account and is now owner only.  Do I include the 5500 codes (2G) for ppt directed on the 5500SF since the plan was ppt directed for a portion of the year?  

Participant terminates in 2025. Plan provides termination distributions following the close of plan year in which termination occurs (and no partial withdrawals for termination distributions). Therefore termination distribution can occur in 2026.

Participant has a Participant Loan balance at termination.  Loan Programs states it is due and payable upon termination of service.

Q: Since the Participant is not yet eligible for a termination distribution, and further the plan does not permit partial withdrawals for Termination, is the loan balance a 2025 "deemed distribution" due to default (end of calendar quarter following quarter first payment is missed), which must be carried on the plan's books with (phantom) accrued interest until such time the Participant requests a termination distribution presumably in 2026? Or is it a 2025 "plan loan offset" since the Participant is terminated even though the Plan does not permit a termination withdrawal at this time, or partial withdrawals for terminated participants?  Concern with the latter: Treas. Reg. Section 1.72(p)-1, Q&A-13(b) provides that, in the event of a "plan loan offset", the amount of the account balance that is offset against the loan is an actual distribution for purposes of the Internal Revenue Code (IRC), not a deemed distribution under IRC Section 72(p). The concern being an actual distribution is not yet payable by the plan - it is not clear to me if this would (inadvertently) be an operational failure.

Thank you.

Client sponsors a standalone profit-sharing plan, family only; six individual accounts with Vanguard.

Spouse thinks she know all, saw something online that allows a rollover to Roth IRA, gets husband, over 59-1/2, and plan allows for "in service” to rollover all his Vanguard accounts to individual Roth IRAs, without paying any taxes.

To my knowledge you can’t rollover unless taxes paid, but of course, could be wrong.