GMK

And the clamoring in post #16 is for the good parts (a technical term), not for these parts, right?

And some of us will get to revel in the new Schedule J (Group Health Plan Information) as well. As much as I'd like to hang around for all this fun, I am old enough, and Feb. 3 is the 'GMK Out' date (ready or not as far as the wealth part goes)..

There are fines and penalties for hiring or continuing to employ persons who are not authorized to work in the USA, for failing to comply with I-9 regulations, etc. Similarly, there are fines and penalties for discriminating against someone who is authorized in the USA. https://www.uscis.gov/i-9-central/penalties So, usually the best option for the employer is not to dilly dally in resolving the status of the employees who have an SSN mismatch.

^ I agree with Ivena. and keep reading everything on BenefitsLink.

Another point of view is that the first deferral is to be from the pay for the first pay period that occurs after the entry date, because that money is earned after one becomes a Participant, not before. From previous discussions on BenefitsLink, it's not a big compliance concern either way. What Lou S. says is right, be clear and consistent in how the Plan does it, and you're OK.

I read that it's a breach of fiduciary responsibility (imprudence) and a loss of 404© protection.

Just curious, where did you read that the 5 year requirement (for qualified distributions, I presume) is waived for the Roth portion? Thanks.

Agreed that amendments affecting rights, duties, or responsibilities are usually signed by a representative of the Employer and by the appropriate representative(s) of the Plan, but I haven't seen this applied to the appointment of trustees ... but maybe it does sometimes. Another of the many reasons to read the Plan Doc.

Just curious, is this by law or per plan provisions?

Sure, we all love Sally and think that Jane is a d**k. But that happens all the time in the real world. You just have to do your fiduciary duties and stand up for what's right for the Plan when you're wearing the trustee hat. What both need to focus on first is finding an advisor who understands the Plan way more better than this:

Just curious, is this allowed for payments to Participants who are still employed by the Employer?

I agree with what's already been said and would add that I would be surprised if trustee Sally has the authority (in the role of trustee) to appoint other trustees. The Plan Document will specify who appoints the trustees. I'm used to seeing that the Employer appoints the trustees. That says to me that the Board votes on it, but maybe Jane can decide on her own (as Bird says), depending on how much authority she has. A Plan Doc may include wording to the effect that if the Employer does not appoint someone within so many days, then the highest ranking officer of the Employer becomes the successor trustee. I don't know if this is typical of all plan docs. I think the person being appointed as trustee can sign for the company, as long as the appointment of the trustee is consistent with the Plan Doc. Two different hats, if you will. The important and sometimes tricky part is when the trustee puts on the fiduciary hat and makes decisions for the Plan, solely for the benefit of the Plan and without regard for the company.

While they have a balance in the Plan, Participants need to be counted as Participants, no? It won't help this year, but for next year, it's time to start processing small balance distributions (and hope you can get to 99 again to go back to the small plan 5500).

Splitting hairs, the rule is that if you are over 100 but under 121, you can file the same format (small plan or large plan) form that you filed last year. For fully insured welfare plans, however, you don't file a 5500 when you're under 100, so I believe that you file the large plan form when you're over a 100. But no audit, I think.

We don't have a requirement about who pays the QDRO fee. We let the Participant and Alternate Payee decide how they want to split it up between them.

Agreed. If you have the wrong SSN on file, then now would be a better time than later to correct the FICA and income tax withholding payments that have gone to the wrong SSN. If the SSN is not the employee's, then other steps may be in order, perhaps through e-verify. In any case, I wouldn't sit around waiting for additional IRS notices.

My understanding is that periodic payments look like installments paid on a prearranged regular schedule (first of each month, fifth of every July, and like that) in substantially equal amounts, like payments on a loan or from an annuity. RMD's are paid when the Participant requests them (could be in January, could be in December), not on a prearranged schedule. And while RMD's might turn out to be substantially equal from year to year, they can vary significantly, for example, if the market rockets up or down or the Participant takes additional distributions that substantially reduce the account balance. Line 2 on the W-4P is for withholding from a string of payments that are on a known, regular schedule.

Thanks. I don't suppose there is anything I can point to to show this guy that such a thing is kosher? Well, lots of places offer a substitute W-4P (google "substitute w-4p"). But the W-4P should be A-OK for you, because at the end of the first page of instructions in: https://www.irs.gov/pub/irs-pdf/fw4p.pdf (bottom of second column on page 3 of the pdf), it says that you can't use line 2 for non-periodic payments, so if the recipient uses the form W-4P, then the recipient can only select no withholding (line 1) or a dollar amount (line 3).

Withholding on RMD's is 10% unless the recipient elects 0% or more than 10%.

The part of your distribution form where the Participant can indicate a percentage or amount to withhold on the RMD is a substitute form for the Form W-4P. If they send a W-4P with information in item 2, you have to calculate withholding from the tax tables, the same as for payroll income tax withholding. (Yeah, kind of a pain.)

The divorce decree, if it mentions splitting your 401(k) account and is signed by the judge, is a domestic relations order (DRO), but it is likely not a Qualified DRO. The 401(k) should have responded to your ex-wife's lawyer, stating that the DRO (the divorce decree) is not a Qualified DRO and sending the 401(k)'s QDRO Procedures. The 401(k) should have notified you that it received a DRO and is supposed to send you a copy of whatever the 401(k) sends her lawyer. I think you are correct that you simply wait until the 6 months is over. If, in the meantime, the 401(k) receives another DRO, perhaps prepared by lawyers for her beneficiaries or her estate, then the 401(k) will determine if it is qualified or not, and the process will continue from there. If the lawyer does not send an updated DRO, then your account will be unfrozen, at least for a while. In my experience, QDRO and probate lawyers wait until the very last minute to file their papers, so don't get your hopes up. And even if nothing happens by December, it is possible for a DRO to show up after December. There's no time limit on filing a DRO, although the status of your account may change (like if you pull all the money out). If the 401(k) no longer has the money to satisfy the DRO, then the lawyers will likely come after your other assets to find a way to satisfy the division of the account assets as required by the divorce decree.

Oops. Maybe they can get a refund from their attorneys, because they aren't getting an "undo" from the Plan ... except in the unlikely event that the plan allows Participants who have received a distribution to change their minds and put the distribution back into their account in the Plan. The DRO can't make the plan do anything it isn't already allowed to do.

Speaking of revealing, tomorrow (June 17) is the day OJ made John Elway famous ... something about a slow moving white Bronco, I think. June 17 is also Watergate day (or to some, Frank Willis Day), but who remembers that?

Looking at it from both sides, maybe this means it's "cloud illusions" week.