Peter Gulia

Today, Congress.gov shows seven House of Representatives actions on September 16. https://www.congress.gov/bill/119th-congress/senate-bill/2403/all-actions And shows an enrolled bill. https://www.congress.gov/119/bills/s2403/BILLS-119s2403enr.pdf But does not yet show anything for “became law” or even “to President”. The parchment might not have been delivered to the President. I express no view about whether the legislation or some part of it might be contrary to the Constitution of the United States of America.

If mtopalovic (or her employer) is a service provider, and not any fiduciary: Have you been paid for all services already performed? Might you decline to provide further services until they are paid in advance? Might a suggestion that the corporation pursue shareholders for a contribution of capital be beyond your contract services? If you assemble a draft of the plan’s administrator’s Form 5500 report on 2025, do it truthfully. If you would be an electronic submitter of the administrator’s Form 5500 report, consider, after getting and considering your lawyer’s advice, withdrawing that service if the administrator instructs you to submit a report you believe would be false. How will the plan’s administrator deliver to the plan’s participants, beneficiaries, and alternate payees the summary annual report that refers to the Form 5500 report on 2025? Which person is responsible to tax-report distributions paid in 2026? If contributions needed for 2025 safe-harbor treatment remain uncollected by October 15, 2026, has the plan lost 2025 safe-harbor treatment? What steps could help you show that the service provider never had any discretionary authority, and never exercised any discretion? This is not advice to anyone.

Consider carefully, including with your lawyer’s advice, whether one might have a professional-conduct or other duty or obligation not to reveal an advisee’s (or even a prospective advisee’s) information that was imparted in confidence. That one is aware of information that suggests a crime might not by itself set up a duty to inform law enforcement. (But one must not conceal one’s knowledge of a felony. For example, keep a record as long as you ordinarily would under your records-retention plan, and don’t destroy or discard a record any sooner than you properly would under your records-destruction plan.) As David Rigby suggests, get your lawyer’s advice. This is not advice to anyone.

Is it too late to decline this prospective customer? This is not advice to anyone.

The originating post’s premise is that the might-be-receiving plan does not initiate participant loans. Basically’s query is about whether to accept a rollover-in contribution that includes an outstanding loan made under the distributing plan. Consider austin3515’s observations. About uniformity. And about what’s practical. Even if both the distributing and receiving plans’ administrators are willing, either’s recordkeeper might less helpful. Tax law’s coverage and nondiscrimination rules and ERISA § 408(b)(1)’s call for loans to be “available to all . . . participants . . . on a reasonably equivalent basis” suggest that a plan’s sponsor and administrator might expect a provision that allows a rollover-in contribution to include accepting an outstanding loan allows that opportunity uniformly for all similarly situated participants. 29 C.F.R. § 2550.408b-1 https://www.ecfr.gov/current/title-29/section-2550.408b-1. Consider that a plan’s acceptance of the repayment rights under a participant loan that had been payable to another plan might be a novation of the loan agreement. This is not advice to anyone.

One quibble: If a participant’s request for a participant loan is denied and the denied claimant seeks a review of that decision, wouldn’t ERISA § 503 claims procedure suggest that a review is with the multiple-employer plan’s administrator or its claims administrator—likely aligned with the professional-employer organization, not the service-recipient employer?

Considering the agreement between the health plan’s administrator and its TPA service provider: Does the agreement provide that the service provider is not responsible for following the plan administrator’s direction? Does the agreement provide that the employer indemnifies the service provider against a third person’s claim that results from following the plan administrator’s direction? If so, an employer/administrator might argue that another writing ought to be unnecessary. But a service provider might argue that it merely seeks a further assurance consistent with the agreement. This is not advice to anyone.

Today’s before-publication release of Eliminating Unnecessary IRS Internal Revenue Bulletin Guidance, IRS Notice 2026-58, includes a few items for employee-benefits advisers. Among the 71 items of revoked guidance are: Notice 96-8, Cash Balance Pension Plans, 1996-6 I.R.B. 23. This notice provides guidance concerning the requirements of sections 411(a) and 417(e) with respect to the determination of the amount of a single sum distribution from a cash balance plan. This guidance was obsoleted by section 701(b) of the Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780 (2006), which enacted section 411(a)(13) and (b)(5) of the Code. Rev. Rul. 2003-6, Employee Stock Ownership Plans; Delayed Effective Date; Abuse, 2003-3 I.R.B. 286. This revenue ruling identifies as a listed transaction all transactions attempting to avoid the effective date of section 409(p) by using employee stock ownership plans formed on or before March 14, 2001. Notice 2007-76, Qualified Transportation Fringes, 2007-40 I.R.B. 735. This notice delays the effective date of Revenue Ruling 2006-57, 2006-47 I.R.B. 911 (regarding the use of smartcards or other electronic media to provide qualified transportation fringes), to January 1, 2009. Notice 2009-31, Election and Notice Procedures for Multiemployer Plans Under Sections 204 and 205 of WRERA, 2009-16 I.R.B. 856. The notice provides guidance for sponsors of multiemployer defined benefit plans relating to the elections described in sections 204 and 205 of the WRERA, and on the notice required to be provided if a plan sponsor makes an election under section 204. The election period has closed. Notice 2009-42, Extension of Date for Multiemployer Plans to Elect Relief Under Sections 204 and 205 of WRERA, 2009-20 I.R.B. 1011. The notice provides guidance to multiemployer plans making elections described in sections 204 and 205 of the Worker, Retiree, and Employer Recovery Act of 2008, Public Law 110-458, 122 Stat. 5092 (2008) (WRERA). This guidance only relates to actions that could be taken in 2008 and 2009. Rev. Proc. 2009-43, Revocation of Elections by Multiemployer Defined Benefit Pension Plans to Freeze Funded Status Under Section 204 of WRERA, 2009-40 I.R.B. 460. The revenue procedure provides that the IRS will automatically approve a revocation request if certain requirements are met, including a deadline for making a decision to revoke; notice to employees and other interested parties; and consistent treatment of participating employers during the plan year. The revocation period has closed. https://www.irs.gov/pub/irs-drop/n-26-58.pdf

Consider also whether another employment-based retirement plan might accept a rollover of a participant loan, even if the receiving plan does not initiate participant loans; or refuse a rollover of a loan, even if the plan provides participant loans. https://benefitslink.com/boards/topic/81756-rolling-a-loan-from-one-plan-to-another-new-plan-doesnt-allow-loans/#comment-358430

Again, thank you for this helpful information.

Thank you, this is wonderfully helpful. Is $50 million in plan assets enough? Or, must it be $50 million in Vanguard funds?

And even for the issues already found, the evidence-law privilege for lawyer-client communications can help, especially if the plan’s sponsor or administrator might decide to leave any failure or violation uncorrected. An unprotected communication can make the employer’s situation worse by changing an ignorant failure into a knowing failure.

Some recordkeepers are willing to process a participant’s repayments made by bank transfers. If that service is available, an employer/sponsor/administrator might (if a plan so provides, or a discretion is exercised) tolerate a rolled-in participant loan without involving payroll. This is not advice to anyone.

For a 401(k)-style retirement plan to get recordkeeping services at Vanguard (not Ascensus), what size and other conditions must a plan meet? Any anecdotal information would help me. Thank you for your neighborly help.

Just as a participant’s account can include rights that are not yet nonforfeitable, an alternate payee’s account might include rights not yet nonforfeitable. (I recognize that a plan administrator’s service provider might lack software to apply a forfeiture to an alternate payee’s segregated account. One might need to use other methods.) I recognize the idea is unwelcome and impractical for everyone involved. I mention the idea only because some divorcing spouses and their advisers encounter difficulty in negotiating a value regarding not-yet-vested ESOP rights, which involve at least two layers of contingencies. If an alternate payee’s segregated account gets some still-forfeitable rights, the alternate payee bears the risk that the participant severs from employment before those rights become vested. (The alternate payee bears a further risk if a right becomes vested but is not distributable.) I don’t doubt that most people negotiate a division that provides an alternate payee’s portion only from nonforfeitable rights, maybe leaving forfeitable rights with the participant. But now I’m curious: Ignoring ESOPs and considering readily divisible daily-valued account balances, what division do divorcing spouses negotiate when the participant’s account has only forfeitable balances? (For example, imagine the participant made no elective deferral, the employer made nonelective contributions, those are burdened by five-year cliff vesting, and neither of the divorcing spouses wants to wait until the vesting condition is met.)