Peter Gulia

That a leave might delay repayments does not excuse the borrower from her obligation. [Treasury] 26 C.F.R. § 1.72(p)-1/Q&A-9 https://www.ecfr.gov/current/title-26/section-1.72(p)-1. Does the plan secure a participant loan with the participant’s account balance? [Labor] 29 C.F.R. § 2550.408b-1 https://www.ecfr.gov/current/title-29/section-2550.408b-1.

In the catch-up rule published on September 16, a search on “limitation year” retrieves eight uses in three bits of text. These describe Treasury’s interpretations about how to coordinate § 401(a)(30), § 402(g), § 414(v), and § 415(c), with differences between or among the plan’s plan-accounting year, the limitation year, and a participant’s tax year. https://www.govinfo.gov/content/pkg/FR-2025-09-16/pdf/2025-17865.pdf

Even if a plan amendment would “provide for a significant reduction in the rate of future benefit accrual”, an individual-account (defined-contribution) I.R.C. § 403(b) retirement plan likely is not an applicable pension plan (because an individual-account 403(b) plan usually is not subject to an I.R.C. § 412 funding standard). If so, ERISA § 204(h) does not require that subsection’s notice. Ordinarily, “a summary description of such modification or change [a material modification or a change of information described in ERISA § 102(b)] shall be furnished not later than 210 days after the end of the plan year in which the change [the plan amendment] is adopted[.]” ERISA § 104(b)(1). If the documents governing the plan provide for a communication, ordinarily a plan fiduciary should obey the documents. See ERISA § 404(a)(1)(D). Whether ERISA § 404(a)(1) duties of loyalty and prudence calls for a communication and when it ought to be provided are questions each plan fiduciary ought to consider. This is not advice to anyone.

Here’s the Treasury’s interpretation: “An employee has a severance from employment when the employee ceases to be an employee of the employer maintaining the plan.” 26 C.F.R. § 1.401(k)-1(d)(2) https://www.ecfr.gov/current/title-26/part-1/section-1.401(k)-1#p-1.401(k)-1(d)(2). As always, Read The Fabulous Document to discern whether the plan’s provision is narrower. Also, if the participant is covered by the employer’s health plan, the retirement plan’s administrator might consider logical consistency with the health plan. Does the health plan treat the worker as still employed and so regularly covered? Or did the health plan’s administrator send a COBRA continuation notice because the worker no longer is employed? This is not advice to anyone.

Thank you for helping me. Yup, my too-quick typing missed $24,500 as the limit before adding catch-ups. Using I.R.C. § 457(b)(3)(A), an individual may defer up to $49,000 under a § 457(b) plan. That could result in combined retirement savings of $88,500.

For a § 403(b) participant who’s 61, has 15 years of service with a qualified organization, and sufficiently little past contributions, is $39,500 [$24,000 + $12,000 (age-based catch-up) + $3,000 (I.R.C. § 402(g)(7))] her elective-deferral limit?

The final rule was published September 16. The rule would become effective November 17. Whatever the Treasury might have said now has been said (or omitted). https://www.govinfo.gov/content/pkg/FR-2025-09-16/pdf/2025-17865.pdf There are differences between the proposed and final rules. The rule applies “with respect to contributions in taxable years beginning after December 31, 2026. However, see §§ 1.401(k)–1(f)(5)(iii), 1.414(v)–1(i)(2), and 1.414(v)–2(e)(2) and the Applicability Dates section later in [the final rulemaking’s] preamble for additional details regarding applicability dates.” “Prior to the applicability date of the final regulations, a reasonable, good[-]faith interpretation standard applies with respect to the statutory provisions reflected in the final regulations.” Some administrators might find it simpler to start the “practices and procedures” the final rule calls for with January 1, 2026.

Even when a State’s law is ERISA-preempted, and even if unnecessary to meet the statutes’ prohibited-transaction exemptions, about participant loans some plans’ sponsors and administrators might look to local banking practices, including those affected or influenced by a State’s law, as some indirect information about what might be done by a bank “in the business of making comparable loans[.]” See 29 C.F.R. § 2550.408b-1 https://www.ecfr.gov/current/title-29/section-2550.408b-1. For a loan a participant uses to buy her principal residence, a maximum repayment period could be as short as five years or as long as 30 years, but the notes above suggest a consensus around 10-15-20 years.

If a charitable organization’s § 403(b) plan is not a governmental plan or a church plan, I would not (without getting more facts) suggest the organization attempt to treat a plan that includes a § 414A automatic-contribution arrangement as a non-ERISA plan. That’s because I think a court could decide that an organization “established” a plan by deciding essential terms of an automatic-contribution arrangement, or “maintained” a plan by administering an automatic-contribution arrangement’s provisions. austin3515, many of my notes in BenefitsLink discussions avoid stating a conclusion. That’s for more than a few reasons, including: A warning that what I write here is not advice might be ineffective. Even if I expect that a regular BenefitsLink neighbor would not assert any kind of reliance, I still worry about what other readers might perceive. My malpractice insurer suggests cautions about what a lawyer puts in social media. I want my insurance applications to be truthful. I likely haven’t done complete research. It’s work to check all courts’ decisions. Even if I’m completely confident about a point of law, I don’t want something I’ve written to be quoted against my client, even incorrectly. (I’ve had that sad experience with litigation.) I am counsel to law firms other than mine, and avoid publicly expressing a view that might call into question a firm’s advice to their client. I am a coauthor in multi-author books, and avoid publicly expressing a view that might differ with, or embarrass, a coauthor. Likewise, I avoid anything that might embarrass or otherwise burden a publisher I work with. That includes topics and points on which I’m not the publisher’s author or editor. I try to help smart practitioners who can do their own reasoning. But I don’t want to give a too-easy answer to someone who doesn’t think for oneself. And many questions of employee-benefits law don’t have a settled answer. Law is a prediction of what a court would decide; we often don’t know. None of this is advice to anyone.

I’m unaware of any court decision that sets a precedent on your question. The Treasury department’s proposed rule to interpret Internal Revenue Code § 414A proposes no guidance. Even if it did, no court would defer to an executive agency’s interpretation. Further, an interpretation of ERISA § 3 is beyond Treasury’s authority. To discern whether something is an ERISA-governed plan, one looks to whether that something is “established” or “maintained” by an employer. ERISA § 3(1)–(3), 29 U.S.C. § 1002(1)–(3). Even with a “completely voluntary” salary-reduction arrangement (with no nudge), some lawyers suggest it is not feasible to administer contracts according to the conditions for the Federal income tax treatment of Internal Revenue Code § 403(b) without involving the employer in a way that results in a plan established or maintained by the employer within ERISA’s meaning. Even if a court might be persuaded that 29 C.F.R. § 2510.3-2(f) is a correct interpretation of the statute, could an employer decide and administer an automatic-contribution arrangement’s provisions but still meet the interpretation’s “completely voluntary” and “hands off” conditions? There is more than one way to meet Internal Revenue Code § 414A(a)(2)’s tax-qualification condition. Who decides whether a first year’s default deferral is 3%, 4%, 5%, 6%, 7%, 8%, 9%, or 10% of compensation? Does that decision “establish” a plan? Who decides which investment is the arrangement’s qualified default investment alternative? Is it possible to select a QDIA without making a discretionary interpretation of the Labor’s 404c-5 rule referred to in I.R.C. § 414A(b)(4)? Whatever are these and other provisions, who puts them in writing? Does that act “establish” a plan? How does an employer administer § 414A(b)(3)(A)(ii)’s auto-increase without “maintaining” a plan? How does an employer decide the content of, and decide how to deliver, the many required notices without administering or “maintaining” the plan? I’m aware of a strand that points in another direction. A court decision held that an employer that does no more than obey California’s law for its CalSavers IRA program, including its implied-election provision, does not establish or maintain a plan. California public law sets the provisions. “CalSavers is not an ERISA plan because it is established and maintained by the State, not employers[.]” Howard Jarvis Taxpayers Ass’n v. California Secure Choice Ret. Sav. Program, 997 F.3d 848 (9th Cir. May 6, 2021). (A Ninth Circuit opinion is a precedent only for Federal district courts in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.) Lawyers and courts might distinguish a nongovernmental employer’s § 403(b) plan because there are some automatic-contribution provisions that cannot be set and administered by looking only to annuity contracts and custodial accounts, rather than an employer’s decisions. An employer might prefer to presume that an automatic-contribution arrangement is an ERISA-governed plan. Without ERISA supersedure generally and § 514(e)’s preemption of States’ wage-payment laws, some States’ laws require an affirmative written instruction to deduct an amount from a worker’s pay. And under some States’ laws, a violation of a wage-payment law can be not merely a civil violation but also a crime. Also, an arrangement’s default deferral that is invalid under State law might call into question whether the arrangement meets I.R.C. § 414A’s tax-qualification condition. This is not advice to anyone.

I estimate the amount remains $105,000 for 2026. (Organized by Internal Revenue Code section; original amount; rounding increment, and rounding down or nearest; and text of the adjustment provision, with highlighting on the base-period year.) I.R.C. § 45E(f)(2)(C)(iii)(II) [Small employer pension plan startup costs]; $100,000; $5,000, rounded down; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” But in November 2024 the IRS stated: “Pursuant to section 45E(f)(2)(C)(iii), for a taxable year beginning in a calendar year after 2023, this limitation is equal to the initial limitation of $100,000, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in section 1(f)(3)(A)(ii). Because the specification of a 2007 base period to be used for computing an adjustment that is first made for 2024 appears to be an error that has been identified as the subject of future legislative correction, the IRS will calculate and apply the limitation in section 45E(f)(2)(C) by substituting ‘calendar year 2022’ for ‘calendar year 2007’ in section 45E(f)(2)(C)(iii). Using that substitution, the limitation for 2024 was [and for 2025 is] $105,000. IRS Notice 2024-80, 2024–47 I.R.B. 1120 (Nov. 18, 2024), https://www.irs.gov/pub/irs-irbs/irb24-47.pdf (emphasis added). from “How to inflation-adjust amounts not designed in Tom Poje’s spreadsheet” https://benefitslink.com/boards/topic/80456-how-to-inflation-adjust-amounts-not-designed-in-tom-poje%E2%80%99s-spreadsheet/#comment-354056.

In sharing observations to help Santo Gold answer the question, it seems the three of us suggest reasonings under which an automatic-contribution arrangement would be neither a protected benefit (for ERISA title I and tax Code vesting provisions) nor a “benefit, right, or feature” (for I.R.C. § 401(a)(4) nondiscrimination). I’m unaware of a Labor or Treasury rule, whether legislative or interpretative, that confirms that an automatic-contribution arrangement is not such a benefit. (That’s not surprising considering that the agencies made relevant rules before automatic-contribution arrangements became much more common after the 2006 Act.) This is not advice to anyone. Consider CuseFan’s practical suggestions.

For years, John Feldt has generously given us inflation updates using Tom Poje’s spreadsheet. But that spreadsheet might not do everything we now use. That’s for at least a few reasons: The spreadsheet likely was designed for to-be-adjusted items then known, not for laws Congress enacted later. Not all adjustments, even those for points a retirement-plans practitioner cares about, fall in with § 415(d)’s regime; many refer to an adjustment regime under Internal Revenue Code § 1 or something else. Even beyond those points, the spreadsheet might have been designed based on expected users’ business interests. Some BenefitsLink neighbors already have asked about adjustments not in the spreadsheet. Let’s crowdsource some recent measures. I’ll start: (Organized by Internal Revenue Code section; original amount; rounding increment, and rounding down or nearest; and text of the adjustment provision, with highlighting on the base-period year.) I.R.C. § 45E(f)(2)(C)(iii)(II) [Small employer pension plan startup costs]; $100,000; $5,000, rounded down; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” But in November 2024 the IRS stated: “Pursuant to section 45E(f)(2)(C)(iii), for a taxable year beginning in a calendar year after 2023, this limitation is equal to the initial limitation of $100,000, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in section 1(f)(3)(A)(ii). Because the specification of a 2007 base period to be used for computing an adjustment that is first made for 2024 appears to be an error that has been identified as the subject of future legislative correction, the IRS will calculate and apply the limitation in section 45E(f)(2)(C) by substituting ‘calendar year 2022’ for ‘calendar year 2007’ in section 45E(f)(2)(C)(iii). Using that substitution, the limitation for 2024 was [and for 2025 is] $105,000. IRS Notice 2024-80, 2024–47 I.R.B. 1120 (Nov. 18, 2024), https://www.irs.gov/pub/irs-irbs/irb24-47.pdf (emphasis added). (Some practitioners, especially those proposing services for a startup plan, want to know this adjustment now because it affects an employer’s tax credit, which might affect whether the employer sees service providers’ fees as affordable.) I guess the amount remains $105,000 for 2026. I.R.C. § 72(t)(2)(K)(vii)(I) [eligible distribution to a domestic abuse victim]; $10,000; $100, rounded nearest; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2023’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” {So, $10,500 or $10,600?} I.R.C. § 219(b)(5)(C)(i)(II) [IRA contribution]; $5,000; $500, rounded down; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” I.R.C. § 219(b)(5)(C)(iii)(II) [age 50 extension for IRA]; $1,000; $100, rounded down; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2022’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” 401(a)(39)(B)(ii)(II) [qualified long-term care distribution]; $2,500; $100, rounded nearest; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2023’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” I.R.C. § 408(d)(8)(G)(i)(II) [qualified charitable distribution]; $100,000 / $50,000; $1,000, rounded nearest; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2022’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” I.R.C. § 457(e)(11)(B)(ii) [length-of-service award]; $6,000; $500, rounded down; “In the case of taxable years beginning after December 31, 2017, the Secretary shall adjust the $6,000 amount under clause (ii) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2016, and any increase under this paragraph that is not a multiple of $500 shall be rounded to the next lowest multiple of $500.” Instead of § 415(d)’s July-August-September measures, Internal Revenue Code § 1(f)(4) provides: “For purposes of [I.R.C. § 1(f)](3), the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on August 31 of such calendar year.” On October 9, the Internal Revenue Service released 2025 amended amounts (following the July 4, 2025 budget-reconciliation Act) and tax-year 2026 inflation adjustments for 63 tax provisions. Rev. Proc. 2025-32 (not yet published in the Internal Revenue Bulletin), available at https://www.irs.gov/pub/irs-drop/rp-25-32.pdf. Among others, 2026’s § 125(i) limit on salary reductions to a health flexible spending arrangement is $3,400, with a $680 maximum carryover. In the Bureau of Labor Statistics website, a search on [“Consumer Price Index” AND August] calls up many earlier years September releases of August-close measures. https://data.bls.gov/search/query/results?q=%22Consumer%20Price%20Index%22%20AND%20August BenefitsLink neighbors, with a little work we can figure any not-yet-released inflation adjustment. Inflation.docx

Does $145,000 inflation-adjust to $150,000? For the tax law that a higher-wage participant’s age-based catch-up deferrals must be Roth contributions, the unadjusted § 414(v)(7)(A) amount was $145,000. For 2024, the first tax year § 414(v)(7) applied (even if not enforced), a participant was § 414(v)(7)-affected if her 2023 wages was more than $145,000. Despite the IRS’s nonenforcement relief, the IRS published the § 414(v)(7)(A) amount for 2025: “The Roth catch-up wage threshold for 2024, which under section 414(v)(7)(A) is used to determine whether an individual’s catch-up contributions to an applicable employer plan . . . for 2025 must be designated Roth contributions, remains $145,000. IRS Notice 2024-80, 2024–47 I.R.B. 1120 (Nov. 18, 2024), https://www.irs.gov/pub/irs-irbs/irb24-47.pdf (emphasis added). In that 2024 Notice, the IRS said “remains” sixteen times. Four of those uses were for amounts the IRS identified as “not subject to an annual cost-of-living adjustment[.]” I infer the other twelve uses were about measures for which the CPI-U changes were not wide enough to reach a rounding increment. Because the § 414(v)(7)(A) amount was among those twelve, I presume CPI-U changes from 2023Q3 to 2024Q3 were not enough to reach § 414(v)(7)(E)’s $5,000 rounding increment. Yet, with no adjustment and despite the nonenforcement relief, the IRS explained how to apply § 414(v)(7) for 2025, looking to the preceding year’s wages. To adjust the § 414(v)(7)(A) amount to be used to apply § 414(v)(7) for 2026 deferrals: The base period is July-August-September 2023. The adjustment period is July-August-September 2025. [For the statute and Treasury regulations, see https://benefitslink.com/boards/topic/80061-is-150000-the-limit-on-2025-fica-wages-before-a-participant-must-make-2026-age-based-catch-up-elective-deferrals-as-roth-contributions/.] Consumer Price Index for All Urban Consumers (CPI-U) 2023 July-August-September: 305.691 + 307.026 + 307.789 2025 July-August-September: 323.048 + 323.976 + 324.800 Applying those changes, John Feldt’s math (generously given to us) puts the unrounded amount at $153,077, and the to-be-published amount as $150,000. https://benefitslink.com/boards/topic/80106-2026-cola-projection-of-dollar-limits/ An ambiguity (if any) results not from that math, but from interpreting Congress’s text. The tax statute reads: “[I]n the case of an eligible participant whose wages (as defined in section 3121(a)) for the preceding calendar year from the employer sponsoring the plan exceed $145,000, [I.R.C. § 414(v)](1) shall apply only if any additional elective deferrals are designated Roth contributions (as defined in section 402A(c)(1)) made pursuant to an employee election.” I read § 414(v)(7)(E)’s (the adjustment provision’s) reference to “the $145,000 amount in subparagraph (A)” as referring to § 414(v)(7)(A)’s reference to “wages . . . for the preceding calendar year[.]” So, a participant will be § 414(v)(7)-affected for 2026 if her 2025 wages was more than $150,000. BenefitsLink neighbors, do you read the law the way I read it? Without waiting for an IRS release (which might be shutdown-delayed), many employers, plan administrators, and service providers want now the estimate—even if one explains it’s not yet official—to communicate with might-be affected participants and to help payroll managers prepare to identify 2026’s affected participants.

I’m familiar with Nevin’s views on many topics, including his recent things-that-make-me-mad lists. Especially his observations about illogical or intemperate extrapolations and observations. Rather, I’m thinking about stuff that might lead an EBSA employee to think it’s worthwhile to start an EBSA investigation, or at least an inquiry. And I’m not thinking about queries that might lead to a subtle point, but rather those that can suggest a realistic possibility of a breach. For example: late contributions? Did the plan have any non-cash contributions? Did the plan fail to provide required blackout disclosures? Did the plan have any (nonexempt) reportable transactions? Is the plan covered by fidelity-bond insurance? My time since I last regularly advised a Form 5500 work group likely is longer than yours. But I remember how often a customer furnished for the service provider’s assembly responses that were factually wrong for the question asked. And often perversely so, suggesting a possible violation or breach when none there was. I suggest there’s an opportunity for service providers to do a value-add for customers, especially those that administer small plans. And guarding against unconsidered responses to a Form 5500 query might help service providers too. (I don’t intend anything that would aid those who sell to fear, or exploiting perceived or even actual weaknesses in a retirement plan’s administration.)

Whatever ERISA and the Internal Revenue Code might permit a plan to provide, there might be three layers of documents to read. Do the plan’s governing documents provide for using forfeitures to pay or reimburse plan expenses? (Just yesterday, I reviewed a set of plan documents, made using a big recordkeeper’s IRS-preapproved documents, that read strictly preclude using forfeitures on plan expenses.) Does the service agreement obligate the recordkeeper to process the plan trustee’s reimbursement of a plan expense the employer paid? Does the service agreement set restrictions or conditions on processing amounts from forfeitures? (Recognizing that many plan sponsor-administrators get little or no legal advice, a service provider might narrow its obligations or set conditions to manage risks that the service provider is criticized for “allowing” a plan’s administrator to do something it ought not to have done.) Does the trust agreement or custodial-account agreement provide for the trustee or custodian to reimburse a plan expense the employer paid? If a reimbursement is provided or not precluded, what conditions does the agreement set for showing the trustee or custodian that the reimbursement is proper? This is not advice to anyone.

If a payroll service provider charges its fee for processing participant loan repayments, who pays that fee--the employer or the employee?

Yes, users of Tom Poje’s spreadsheet or another method now have the September Consumer Price Index measure. And here’s a BenefitsLink discussion that anticipated the government shutdown: https://benefitslink.com/boards/topic/80346-how-would-lacking-official-inflation-adjusted-amounts-affect-your-work/.

Another BenefitsLink discussion includes my inquiry about whether an automatic-contribution arrangement is a benefit, a burden, or neutral. https://benefitslink.com/boards/topic/73902-is-auto-enroll-an-actual-feature/ To consider whether either kind of election regime—affirmative or default—might be a protected benefit for a plan’s vesting provisions, one might consider that under either regime a participant retains a right to elect for or against deferrals. This is not advice to anyone.

The Bureau of Labor Statistics slightly varied Labor’s shutdown plan to allow work on the Consumer Price Index measure as needed to set increases in Social Security payments. Today BLS announced September’s CPI measure. https://www.bls.gov/ But the IRS people who apply CPI measures to form the adjustments the Internal Revenue Code calls for won’t be available to work on this until after the government shutdown ends. Now that September’s CPI measure is announced, unofficial estimates might complete the arithmetic. Some of us observed in July some adjustments that would be within rounding bands, even if August’s and September’s inflation would be much higher than expected. Over the past dozen weeks, I’ve advised some clients to prepare for Thanksgiving arriving with the IRS not having released inflation-adjusted amounts.

The forms for an employee-benefit plan’s annual report ask questions designed to check some points about whether the plan’s fiduciaries meet their responsibility. Imagine a recordkeeper, third-party administrator, auditor, or other service provider now is thinking about a value-add for next year’s 5500 services. The idea: List all Form 5500, including Schedules, queries that ask something for which a report’s reader could use the response to detect or suspect a possible breach of a fiduciary’s responsibility. (Not a tax-qualification failure, unless it also involves some other breach of an ERISA fiduciary responsibility.) https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500 Isolating those Form 5500 queries in one list would aid a service provider’s review to spot responses that could lead to government or private enforcement. Let’s crowd-source the list, with each BenefitsLink neighbor noting one query. Don’t repeat a query already noted. Quicker responders might note the obvious queries; later responders are challenged to find more subtle queries. If enough of us add one item, we’ll collect a complete list. I volunteer to assemble the whole list, in a table format—with Form or Schedule, part, and line numbers; the query; and an explanation.

EBSA’s bulletin states only that the Labor department “will not pursue [a] violation[]” under the conditions the FAB describes. That nonenforcement policy does not excuse a fiduciary’s breach. If a retirement plan’s administrator has already found that the participant’s purported identifying number is false—and might suspect that the purported or ostensible name also is false, how would an administrator meet all five conditions (including having conducted a prudent search for the missing or nonresponsive participant)? How would a fiduciary have conducted a prudent search for someone whose identity is unknown? Even if the applicable State’s abandoned-property regime (to be chosen following the participant’s “last known address”) meets all nine conditions for an “eligible state fund”, how would a fiduciary using the experienced “care, skill, prudence, and diligence” ERISA § 404(a) requires form a finding that the abandoned-property regime “is a prudent destination for the participant’s or beneficiary’s retirement benefit payments”? (I’m not saying a fiduciary could not reason through to the finding, only that the reasoning might not be obvious.) I don’t suggest that anyone ask the Labor department for guidance. And I don’t suggest asking anything of Congress or of any executive agency.

Unless the pension plan defines a QDRO more generously than ERISA § 206(d)(3) requires, the plan’s administrator might consider (and get its lawyer’s and actuary’s advice on) the QDRO regime’s general principle that a QDRO does not provide a benefit the plan does not otherwise provide. If the plan’s only death benefit is (or was at the relevant time) a QPSA for a participant’s surviving spouse, what benefit could a court’s order attempt to provide to a participant’s former spouse who was not the participant’s spouse (or deemed surviving spouse) when the participant died? This is not advice to anyone.

After the Immigration Reform and Control Act of 1986, the problem of employments processed with false identifiers and resulting retirement plan accounts has persisted. This difficulty might be something for a SPARK working group to sort out.

ratherbereading, thank you for this vote of confidence. Even if the April 2023 discussion was about similar facts and circumstances, I didn’t suggest a particular conclusion, but rather that the plan’s administrator might want its lawyer’s advice. While I suggest that a person not alter, discard, or conceal records, that does not by itself suggest there is a duty to report a crime or other violation. Consider that, for a situation that involves matters beyond Federal tax law, evidence law might privilege lawyer-client confidential communications, but does not privilege communications with another kind of practitioner. Consider how a retirement plan’s administrator would identify that a potential distributee now is the same person as the one who earned the benefit. Beyond the false identification number, there might have been other false identifiers. This is not advice to anyone.