401(j)

I have a client who made a 2014 distribution to a participant's ex-wife without a proper QDRO. The divorce decree called for the distribution but it did not contain the required language for a QDRO; they are now in the process of having the a QDRO prepared. Question 1: To correct the situation, do the funds have to be repaid to the Plan and distributed again after the QDRO, or can it be corrected by not having a repayment but merely having the QDRO prepared after the fact, acknowledging that the distributed amount was correct? Question 2: Should a form 1099-R be issued by the Plan for 2014, and if so, who should be shown as the recipient on the 1099-R -- the participant or the ex-wife who received the funds? Thanks in advance for any help.

It occurs to me that one way around this, in a climate where interest rates have gone down, is for, a couple of years into the amortization schedule on an initial five-year loan, the participant to take out a second five-year loan (with lower monthly payments) to pay off the first loan. In effect, this turns that original five-year loan into a seven-year loan -- and I can't find anything to say this is improper. Anyone aware of anything that would thwart this type of arrangement? Thanks in advance.

Hello all, Is anyone aware of any precedent that would change a plan's responsibility under VCP procedures based on assigning fault to the participant? The specific situation I have is an employee who sought to increase his contribution level in 2011, but the HR department never made the change until it recently, when it discovered the oversight on its own. It now wants to know whether it can save any make-up costs by arguing that the employee went two years (and counting) without noticing or commenting on the lack of change in contribution and therefore bears some responsibility for the mistake. I'm thinking the answer is a resounding no, but I figured I would at least throw the question out and see if anyone has ever come across anything to the contrary. Thanks in advance, everyone!