david rigby

IMHO, yes. However, that does not automatically mean the resulting DRO will be qualified by the PA. Just an opinion.

Before doing that (he said, not knowing if such action is legit), one might try a gentler approach. One might "suggest" to the participant that escheat might happen, thus making it even more difficult for him/her to get the money. Such communication might be more effective if the PA enlists the assistance of some other party (sibling perhaps?) that is more effective in getting the point across. Such communication will likely emphasize the above facts: (1) each payment has already been reported to the IRS, and (2) each payment is already taxable income (along with the corollary fact that the IRS "frowns upon" the avoidance of paying taxes and the avoidance of filing or declaring taxable income). Also, such gentle communication might suggest that the participant can get all of the (remaining) money via direct rollover to an IRA. (Taxation might not change since the IRA must also do an RMD.)

In what way has the Plan failed to "get them their money"? From your post, it appears the RMD has been paid and the 1099-R has been provided, but the participant has failed to cash the checks. Is it the responsibility of the Plan or trustee to force a participant to cash the check? Perhaps a gentle reminder that the cashing of a check is not what alerts "the government", but it's the filing of the 1099 form, and he/she has taxable income?

Has the DRO been qualified (ie, approved) by the plan sponsor? I'm skeptical that the plan can provide some retroactive payment in this case. BTW, your second sentence might be backwards: most DB plans pay from plan assets rather than from annuity contracts.

I'm not sure this young man has considered other alternatives. If available, he should discuss the situation with a local Senior Services agency, maybe also with an elder-law attorney.

Agree with @C. B. Zeller. However, who messed up? Was it your responsibility to prepare the QDRO? Ex's responsibility? Was it done and delivered to the plan sponsor? Maybe there is someone with fault other than you? Based on your mention of $34K, it may be most efficient to solve this without additional legal fees.

Your "thinking" and any opinions here are probably not the best source of information. 😄 Does the plan allow anything like a "return"? Does the plan accept a rollover from any other source?

Get a study partner.

I've seen many, many plans that define the benefit as $ x Service, one of them as low as a $2 multiplier. NOT union plans. Some of these are approximately equal to a compensation-based accrual rate of about 0.25%.

To provide a response, more information is needed.

To be clear, the term "meaningful benefits" does not appear in the 410a26 statute. It does appear in the regulation at § 1.401(a)(26)-3. Subsection (c)(2) includes the text: The Paul Schulz memo might have effect on how IRS employees approach their job, but it has no specific authority over any plan design.

They are stalling. Remind them again of your request and ask for a reply within 2 weeks. You might be able to identify the TPA/recordkeeper at this site, https://www.efast.dol.gov/5500Search/. Search by plan name or sponsor name, then identify the precise plan. The name of the recordkeeper might (not required) be included on Schedule C or somewhere within the attached audit report.

Embedded in the original question is an implication of something else going on. Perhaps, "owners" trying to hide the "new plan" from other employees? Failure to identically communicate to all participants? Other subterfuge?

Under @Peter Gulia's (not so) hypothetical situation, I would do as instructed by the plan's PA: process as if the reported compensation meets the required plan definition. Why? Because I have already done my consulting duty to point out the potential problem with the 1099, which means I know (not suspect) that the potential problem has been identified and communicated to the proper person. It's not my job to police a correction. Note my use of the word "potential". It's not my job to know or determine if the original information (ie, the 1099) was a mistake. IOW, I would be making a consulting mistake if I assume the first information is correct; perhaps it was not. I'm not faulting @Paul I's response above, but my read of his comment is that he is assuming the first census data is "more correct" than later data, which I will not do. That said, I would alert my E&O insurance carrier and my own legal counsel. And, in case you are wondering, I am an Enrolled Actuary so I have a right to practice before the IRS, or at least I could before my retirement and change to inactive status.

I'm unsure why you care. It appears the original questioner is recording census data for a DB and/or DC plan. But, after you have provided your annual reminder of the plan definition, isn't it the job of the PA to provide the census data, not your job to audit it? It appears the PA has done more than that, by telling you about a 1099. Your proper response is (might be) to say, "That's not what the plan says. So, if you want me to include this, I will assume, unless you tell me otherwise, that you are correcting the 1099 and issuing a W-2, but that is your task to do, not mine. I don't need to see any of the form(s), but if you later tell me it was not done, then I will use that information to exclude this compensation per section X.x of the plan document." OR, you could say the opposite, "Per x.x of the plan document, this is excluded. When you tell me it has been corrected, I will include it." IOW, you have done your consulting duty to remind the PA about the possible error/inconsistency, and that only the PA can fix it. If you have a relationship with the plan sponsor's accountant and/or ERISA counsel and/or payroll vendor, you might casually mention this, hoping a comment from that other person will also carry some weight to get it fixed, whatever that fix is.