JamesK

I think you are being generous. Very generous. If your attorney is not experienced with DROs, then consider a change. At the least, you have the former spouse over a barrel and are not taking advantage of it. The equitable defense of laches comes to mind. This defense applies when there has been an unreasonable delay in making claim. Arguably, the settlement only provides her rights vis a vis the plan. And I think that's a pretty strong position. Therefore your husband really has nothing to do with the plan's failure to make payments on a claim she did not pursue. In any case, she doesn't need your husband's approval to submit a DRO to the plan (although cooperation is always nice). I would consider not wasting any more money on your attorney and let her waste her time and money arguing about this with the plan. If she decides to pursue the matter further, then you can consider the cost of settlement (if she has a claim at all) taking into consideration that there is likely a statute of limitations in GA for such claims. In case it hasn't been mentioned, the plan will inform your husband that a DRO has been lodged with the plan and it will explain any appeal rights he with respect to the plan's determination. It's nice to be nice. But it just doesn't pay very well.

As for information you might want or need, find out if this check has been reported as income. The most likely answer is "yes" and code it appropriately so it is not taxed a second time.

Here is a more thoughtful approach which focuses on the employment tax issues: https://www.ey.com/Publication/vwLUAssets/ey-managing-wage-repayments/$FILE/ey-managing-wage-repayments.pdf

No, there needs to be withholding as well. Since presumably the FICA has already been withheld, that shouldn't be a problem. The problem will be recovering the FICA amount withheld on the repayment.

I would just like to emphasize what the others above have stated: obtain a statement with the calculation of all the relevant amounts including your husband's pension, his first wife's share, and your share. Based on what you've said, it doesn't add up, but without seeing the numbers, it is too abstract for anyone here to be helpful.

Since any entity's tax liability is determined on an annual basis, it is indeed possible to return or pay back income and receive an offset for the amount repaid -- so long as it all done in the same taxable year. But getting the money out of the 401(k) plan is an entirely different kettle of fish. I can't think of any good reason for distributing it from the plan back to either the employer or the employee. In the end, the employee should have received a W-2 with $18,000 in salary deferrals, social security wages, etc., but zero in wages. Thinking about the corrections for over withholding, it sounds like a real pain in the ass.

This is from the IRS Examination Guidelines: "Contributions do not fail to be annual additions merely because they are excess deferrals, excess contributions, excess aggregate contributions or merely because excess contributions are corrected through distribution or recharacterization. See 26 CFR 1.415(c)-1(b)(1)(ii). However, excess deferrals distributed in accordance with 26 CFR 1.402(g)-1(e)(2) or (3) are not annual additions. See 26 CFR 1.415(c)-1(b)(2)(ii)(D)." https://www.irs.gov/irm/part4/irm_04-072-007

If you want to put the blame on the government rather than the plan, point to the required minimum distribution rules as the source of a rule making suspension impossible. The situation is quite ironic considering the work that went into protecting workers' benefits

FWIW, I am not real estate lawyer, but I would be sensitive to how the deeds are structured. It seems to me that only the portion being sold needs a new title. A title search would reveal that the what remains is the original tract less the portion sold. The reason is that there can be transfer taxes on each deed and you wouldn't want to pay twice for the same property. Different rules often apply to farm land. As Luke said above, consult a good real estate lawyer.

I agree with @CuseFan and have seen this practice in my experience. Key, I think, are making sure that the current occupant of the respective offices are aware of and acknowledge their responsibilities and that the participants know or can find out who occupies those positions.

Interesting question. And my answer is "I don't know" with respect to the general qualification requirements, but reusing the compensation from the end of the 2017 plan year may violate the consistency requirement under Code section 414(s). Treas. Reg. 1.401(a)(4)-12 (definition of "determination period") provides that "Whether an underlying definition of compensation satisfies section 414(s) is determined on a year-by-year basis." I read that to limit compensation for purposes of 401(a)(4) and 414(s) to the six-month period ending 6/30/18.

Since the Plan provides no further explanation of the meaning of "returns to employment with the Employer," it is the Plan Administrator's responsibility to interpret the meaning of the phrase as applied to these facts. The PA should document its reasons for interpreting the Plan document one way or the other and then apply this provision consistently going forward. That said, I agree with the other comments here that the participant will not have returned to employment until they show up for work. Until that day, the participant and the employer both presumably have the power to change their mind (at-will employment). In addition, and I base this on my recollection of the ERISA Committee report, pension payments are meant to be a replacement for wage payments. Therefore, until the day the participant is returned to the payroll, it is justifiable to make pension payment since it will be paid for its intended purpose.

Barbara , I suggest that you create a separate post under the correct topic for this question. That way it will be seen by more people who either have an interest in or experience with your issue. Also, if possible, state what particular issue is relevant (e.g., taxation, governance, insurance law).

You would, of course, absolutely, positively want to obtain a determination letter for the plan. Even so, I would discourage your client from adopting a plan design which, in my experience, is unique. The contribution, forfeiture, and vesting requirements are in place do not seem to contemplate this sort of design. Since qualification under section 401(a) provides significant benefits to the participants, why take a chance that your unique design may not be up to snuff? As for what is specifically wrong, I would suggest that it violates the exclusive benefit rule since it allows the employer to use money for three years which has been putatively allocated to a participant. Beyond that, it simply does not seem to fit the definition of a profit sharing plan since the participants do not receive the benefit of the gains or losses on the account for that three year period. I suspect that there are other problems with this design as well. There is no reason to make more difficult what is already a challenging compliance and risk management issue for the employer.

I experienced something similar with an employer which filed Form 5500 for a pension plan that was never funded. We did exactly what you suggested: filed an amended Form 5500, marked it as the final return, and attached a letter explaining the circumstances. There was no follow up from the IRS or DOL. For my client, it was a good result and there was some anxiety about since funding a qualified plan would have been a very expensive mistake. Of course, , but your experience may be different!