Tracking Source of money in Segregated Brokerage

[Guest DeePA]

Plan has segregated accounts (FBO accounts for each ee).

Plan used to have 401k deferrals only so no tracking of g/l by money type was done or needed.

Now they've added match.

All is fully vested.

Hardship allowed from ltd 401k def only (plan effective 1995). We track ltd contribs.

Is there a reason we need to track g/l by deferrals and match? Is there anything in the regulations that requires this?

Thanks

[Blinky the 3-eyed Fish]

There are distribution restrictions applicable to 401(k) dollars that are not applicable to match dollars. While this may not affect you with the current plan provisions, if you don't track the sources now, you will restrict the plan from certain future options in this area and many others.