A plan sponsor has been notified by Social Security that 2 of its employees have invalid SSNs. These 2 employees have worked for the plan sponsor for several years, W-2s have been issued, and both are plan participants. This notification has come as a surprise to the plan sponsor because, until now, there never has been a notice of any kind. The plan sponsor asked each employee if the SSN being used was provided in error and if either has another SSN (either due to typo or ascertaining a valid SSN), to which both said the SSN the plan sponsor has on record is correct and that they have filed tax returns. The plan sponsor is still trying to get to the bottom of this. [1] If either or both are in fact illegal aliens using invalid SSNs (stolen or otherwise), are they entitled to their plan accounts? [2] If so, what taxpayer ID number would the plan need to report on 1099-R when distributed, or would the plan use the one on record currently even though it is known to be invalid? [3] If not, is it a forfeiture or is there some other action necessary?

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