Nancy Keppelman

I had a situation like this years ago. I told them to put the non-top hat participants' benefits in a qualified plan (where they belonged in the first place). In that case, it was easy--the qualified plan was a cash balance DB plan. But you could probably put them into a DC plan employer contribution account (may require amendment of the DC plan to reflect full vesting). Does that solve everything? No, but it did make sure the non-top hat employees' benefits complied with ERISA's trust requirements and the problem went away (no unhappy employee was going to report, in that case.) The problem with a non-top hat top hat plan is that under ERISA, all employees who are non-top hat employees and who weren't in the plan have a cause of action to enforce benefits in a non-discriminatory way. In other words, if the top hat plan paid 5% of pay, all employees should have gotten 5% of pay (or some percent that complied with non-discrimination rules). Plus, the benefits in the plan should have been in an irrevocable trust.

This is probably too late to be helpful, but the answer is, "the loan IS the investment. It is an investment in YOU, which you chose to make."

This is surely too easy, but if no contributions were made in 2021 for keys (including no salary reduction contributions) there is no top heavy minimum contribution.

In order to avoid paying 100% of the account to the participant and then getting hit with a QDRO, I advise treating the Divorce Judgment as if it were a QDRO. The result is that both parties are advised that the judgment (as is usually the case) does not satisfy the requirements to be a QDRO. The determination says, the participant's account will be available for distribution as of x date unless the parties submit a QDRO. That allows both parties to submit a proper QDRO or they are on notice that the entire account will be distributed. This protects the plan and administrator without getting into the divorce case itself.