mbozek

More practical question is why would a plan fiduciary add an annuity product to a 401k plan for active participants because the cost of the annuity benefits can add 1 % or more to fees which simply reduce the account balance that compounds tax free. Don't need a tax deferred wrapper in a tax deferred plan. Its better for participants to invest in low cost funds with long term investment goals and purchase an annuity if it is needed at retirement instead of having a small amount invested in an annuity contract that will pay a minimal monthly benefit.

My view: Purchasing an annuity (as noted above, it must retain the distribution options and factors available under the plan) is the only option, unless she elects to be paid the lump sum equivalent of the benefit as defined by the plan (with spousal consent if the participant is married). Rollovers to IRAs without proper consent are impermissible if the benefit is worth more than $5,000. The annuity will cost more, but under no circumstances would she be entitled to the higher amount it would cost to purchase the annuity. The plan must define the benefit and also the lump sum equivalent thereof. Buy an irrevocable annuity to cover the benefit if the participant will not elect to receive the lump sum equivalent as defined by the plan. No election = default action. The participant has no authority to delay the distribution of benefits to complete the termination.
If she is being offered an immediate lump sum, she should have the option to receive an immediate annuity, but if she will make no election and has not reached normal retirement age, it is a deferred annuity that should be purchased.
As for the legal action, it is a free country, and you can't stop people from wasting their money on pointless lawsuits. In saying that, I am presuming that you have double checked the benefit calculations for that participant and are prepared to defend them in court.

I would treat the rollover back to Plan A as a non taxable rollover. If it is treated as taxable income how can it be rolled back to the plan? As far as Plan B is concerned the amount returned is part of a rollover distribution from Plan A. Since plan A made the mistake of distributing an incorrect amount the employee should be held harmless.
Plan B should file a 1099 for a rollover back to plan A since Plan B is treating the returned amount as pre tax rollover.
I don't see any reason for different treatment if the returned amount comes from an IRA.

I know of nothing prohibiting the elimination of automatic enrollment. Seems a simple plan amendment could address it though you might want to be clear whether if it applies only to new employess or removes the auto enrollment for folks who don't have any election.

Since the business of the decedent was his property, upon his death the business is part of his estate which is to be administered by the executor or administrator of the estate. The executor can be the plan fiduciary or can appoint a fiduciary/PA to wind up the plan. Otherwise the plan becomes an orphan plan whis is not a preferred outcome since the owner's estate wants the benefits under the plan so that distributions can be made to the beneficaries. In order to pay distributions someone must become the plan fiducary under ERISA with authority to distribute plan assets.
The fact that the party who winds up the plan and authorized distributions did not accept fiduciary responsibility is meaningless. Under ERISA anyone performing a fiduciaty function such as distribution of plan assets is a fiduciary under ERISA, regardless of a denial of acting in a fiduciary capacity under the plan.
In other words anyone performing a fiduciary duty under ERISA is a fiduciary regardless of whether they accept no fiduciary responsibility in any written document they sign.