RatherBeGolfing

Yes, the law is inconvenient at times

I guess you could be a directed trustee but take an action that would be a fiduciary action (See OPs earlier question on education vs advice). But to rely on BICE, I think you would have to accept that you are a fiduciary but fulfill the requirements of the BICE and be exempt, I don't think it can function as a backstop while claiming that you are not a fiduciary...

Just curious, does the plan actually say deposited on a payroll basis, or allocated on a payroll basis?

There is nothing philosophical about 72(p). If you approve a a loan in excess of the costs that can qualify for a principal residency loan, you are 100% guaranteed to violate 72(p). No time machine needed.

Belgarath points to the same concern I have here. If the loan terms exceed 5 years and it does not qualify as a principal residence loan, you fail to satisfy IRC §72(p)and the consequence is a deemed distribution or VCP to correct. Whether the loan qualifies as a principal residence loan is not a needs tests like in a hardship situation, it is a best practices issue to make sure that you do not issue loans in violation of IRC §72(p) that could be detrimental to the plan and participant.

Ok so in your opinion the actual costs incident to the acquisition of a principal residence are irrelevant?

Sure, but your headaches still make for interesting discussion starters for the rest of us

So you approve loans amortized over more than 5 years based on what?

I have heard tales of ink testing and carbon dating paper to catch back dating, but I don't know how much truth there is to that. I had a conversation with someone at a conference once who jokingly said that it might be a good idea to save and label paper each year so that you would have the correct paper for the whatever document you may need in the future...

I don't disagree with anything in your post. My comment was simply addressing the point that if the "last known" on file is the same as the participant, a different address in the QDRO is most likely a more recent address. I have also seen the address on the QDRO be wrong for various reasons. As QDROphile pointed out, the statute requires certain things to be in the QDRO, one of them being the APs address . The statute also requires that the PA notifies the AP of the receipt of the DRO, its procedure for determining qualified states, and to notify the AP when the determination is done. The statute does NOT require that the notification be made to to the address in the QDRO, but this is where the requirement for a plan to establish reasonable procedures to determine qualified status and administer distributions come into play. Does the plan have a procedure for where to send the notice? Does it have a procedure for a case where the address on file is different from the one in the QDRO? Does it sound reasonable for the PA to simply send it to an address different than the one in the QDRO with no verification that it is the correct address? I think you need a pretty good reason to use an address other than the address in the QDRO, maybe something like written verification? Based on the few facts we have, it seems pretty clear that the PA made a mistake. What is not clear is whether that mistake caused a loss to the AP or whether there is liability attached.

But if you have one address on file for the AP (possibly same as participant) and you get a new address in the QDRO, wouldn't the QDRO address be the "last known address" since it is newer than the address previously on file?

where there's a will there's a way...

Ha, but since they are not my cows they are not my problem :)

I am now a little sad because I don't get random cow messages...

What Bill said... What I am seeing in practice is 2-3 prior years depending on the auditor. It really should not be a complicated process and most auditors will have a checklist or something similar that you can go through step by step.

I agree with the above. Always good to have options and I'm sure some will prefer the alternative layout. I like the default :)

Your what is the actual language in your document (AA, base document, loan policy, loan note, etc)

I would prefer to not defend either

Informally (conference panels) the IRS has said you can do it. I think it is a gray area, but like you said, everybody does it.

But there isn't a need to prevent eviction anymore because you already made the payment. It kind of brings you full circle if you want to approve the second hardship since you are either 1) approving it based on the same bill twice , or 2) approving it for a bill that has already been paid which means there is no actual need anymore.

I agree with Lou. They missed their chance at making a match contribution, which means they are top-heavy for 2015 and 2016. As for them timing of the TH contribution, it gets a little tricky. We discussed the timing of the TH contribution in this thread earlier this year. Some highlights from the EOB (Ch. 3B - Part 2 - Section IV - Part A - Item 5): There is not a specified due date for top heavy contributions In order for the contribution to be deductible for a particular tax year of the employer, IRC §404(a)(6) requires that the contribution be made no later than the due date (including extensions) for filing the federal income tax return for such tax year. Under the IRC §415 regulations, an employer contribution is generally treated as an annual addition for a particular limitation year if it is actually made no later than 30 days following the due date (including extensions) of the federal income tax return for the employer’s taxable year in which the limitation year ends. See Treas. Reg. §1.415-6(b)(7). Use deduction deadline or IRC §415 deadline as informal deadline. If the two deadlines discussed above are used as an informal deadline, then top heavy contributions made after such dates should include an adjustment for lost earnings. A reasonable approach is to use the IRC §415 deadline if the employer has not made the contribution for any non-key employees and to use the deduction deadline if the employer has missed one or more, but not all, non-key employees in making the top heavy contribution. This approach also would be consistent with a reasonable approach for making employees “whole” through the self-correction mechanisms under the EPCRS program. In the latter case, the earlier deadline is used because other non-key employees had the benefit of the contribution by such deadline for earnings purposes. So yes, they need to make the TH contribution for 2015 and 2016 plus lost earnings at this point.

In the first example, the distribution was correct because at the time, there was a legitimate hardship. The fact that the purchase fell through doesn't matter, and you can't return a hardship that was correctly distributed. There is no error to correct and you can't just return a legitimate hardship because you no longer need the money. In the second example (this thread) the hardship was approved in error, and the participant was never actually entitled to the distribution. What Luke and Peter has pointed out is that the distribution would be an operational defect that can be corrected by reversing the error, or in other words, returning the money.

What about the participant that is unable to return the money to the plan?

It is only different for me when I go to my bookmark which defaults on the main message board page. Once I click on my custom stream it all looks pretty much the same. I don't mind the new look, it is just a little different.

Sure! When you end up saying it often enough people stop jumping the gun because they just don't want to hear you say "I told you so!". Or my personal favorite "I informed you thusly!"