Have you ever had a case where no DRO or QDRO was ever done, yet the participant is demanding a distribution? This is a first for me. One of our clients has a 401(k) plan with a participant who was an unwilling party to his divorce. He says his ex wife "did it all" -- hired the lawyer and paid for the divorce. The lawyer made a one paragraph passing reference to the participant's retirement account in the Marital Settlement agreement. "Respondent has a retirement plan with XX Company. Upon distribution of the funds in this plan, Respondent will direct the Plan Administrator to divide the funds equally between the Respondent and the Petitioner, that being 50% to each party, however distributed." That's it. The participant has now terminated employment and claims to be in very dire straits and wants his half of his money RIGHT NOW so he can move in two weeks. He does not know or care how a DRO or a QDRO might eventually be created and he does not particularly care about the rules and regulations we are all trying patiently to explain to him. He has stated that he most certainly is not going to pay any lawyer to do a DRO. His HR department knew enough to call me as the TPA, send me a copy of the marital agreement and question whether he wasn't supposed to have a QDRO before anybody could get paid. I knew enough to alert John Hancock not to process any termination requests from this person and effectively "freeze" his account until we can get this all sorted out. What the participant wants is for the Plan Administrator (the employer/ Trustee, effectively) to liquidate his account, send half to his ex and half to him, tomorrow if at all possible. I do not know of any legal way to accommodate this participant, but I thought I would run it up the flagpole to see if any of you have ever processed a marital division of an account without a QDRO. I have certainly never heard of any such thing. Your advice is appreciated, as always.

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ERISA 403b plan. We've been merrily excluding a few participants from the 5500 count for the past few years because they terminated in 2004 and 2005 and had their balances in old annuity contracts. Plan is looking to terminate. All of the other participants with balances are active on the mutual fund platform so we were all excited to have an easy plan termination... and then someone remembered those stragglers. Any way to consider them to be already in possession of their accounts so that the plan can be terminated and paid out? Maybe with a notice to them to give them a heads-up that the plan is officially terminated?

PS plan effective 1/1/2017 added 401(k) and QACA SH on 3/1/18. What compensation am I using for the SH? Plan compensation definition says full year and not participation compensation.

An employer previously filed Form 5310-A notifying the IRS of its two QSLOBs. In that filing, the employer included an attachment listing each member of its controlled group and assigning each member to either QSLOB #1 or QSLOB #2. The employer is contemplating adding a new subsidiary to its controlled group. The new subsidiary will be part of QSLOB #1. The addition of the new subsidiary will not impact the number of QSLOBs the employer operates. Does the employer need to file a new Form 5310-A due to the change to the employer’s controlled group? Or can the employer continue to rely upon its previously filed Form 5310-A since there will be no change to the number of QSLOBs it operates? The example in the Form 5310-A instructions of a "modification" necessitating a new filing includes a change to the number of the QSLOBs being operated. I have not been able to find any specific guidance on whether a new filing is needed if the only change is to the controlled group members described in the previous 5310-A attachment.

A plan has a tiered match formula. Each participant is eligible for one of the tiers (30%, 40%, 50%, or 75%). We understand we have to do a Benefits, Rights, and Features coverage test on each tier of match. Our understanding is that anyone who is benefiting at the same or greater level of match as the tier being tested, is deemed to be benefiting in that tier (e.g., if you get a 50% match, you’re considered benefiting in the tests for the 30%, 40%, and 50% tiers). In this plan, only the 30% tier passes. As would be expected, the 75% tier fails the worst. We are going to bump up an additional 17 participants from their current level of match to 75% to pass coverage. We believe that these 17 participants, who are now benefiting at the 75% level, should be considered as benefiting in all the lower tiers, which would make those tiers pass as well. However, the provider doing their BRF testing believes that different participants must be used to make each tier pass; e.g., even if someone was bumped up from 30% to 75%, you would still not consider them benefiting in the 40% and 50% tiers. What do you think? Can you find anything in the regs (or elsewhere) that addresses this situation?

We have a long-term balance-forward client plan where we as TPA prepare the distribution paperwork and subsequent reporting (i.e., 1096, 1099-Rs, 945 etc.). The client handles the actual payout from the investment funds based on the completed distribution form when returned. Said plan is now terminating. The client has valid contact information for the vast majority of the participants -- address and such -- so we'll prepare distribution paperwork for those folks. There are a few former employee participants, however, where the client has no valid contact information and only "old" addresses. Let's say there are 5 people and the total of their balances is only about $13k. (Each individual balance is over $1,000.) We're hoping to be able to send those funds to a vendor and they will set up the IRAs and take it from there. I have contact information for Penchecks and plan to call them, but am more or less wondering if others have experience with Penchecks or any of the vendors that have these services and what is the opinion on the process? Don't have many balance-forward plans left and plans that have terminated with the usual large 401k vendors (e.g., Nationwide, AF, John Hancock, Empower, etc.) have a pretty straightforward process for these types of "lost" participants to get them into an IRA or cashed out as applicable so that the plan can close down.

Plan covers only the 100% owner and his wife. The Plan has to be aggregated with another plan to pass coverage (i.e., the other plan covers nonexcludable employees). What's really happening is there are leased employees who are benefiting in a plan that has an identical design (which is why we can aggregate). But is my plan a one-participant-plan eligible for the 5500-EZ? Is it exempt from ERISA?

A brokerage firm holds SIMPLE IRA accounts for a firm. The employees' 2018 deferrals were deposited timely, but the owners' (a married couple) deferrals were withheld in a December 31, 2018 payroll but not deposited by January 30, 2019. They went to deposit them in February and the brokerage firm won't take them. It says it's too late. We showed them the IRS "fixing mistakes" web site which discusses a correction by depositing lost earnings, but it doesn't explicitly say the actual contribution has to be deposited. So they won't accept it. Yes, seriously. Anyone have experience with a better-informed brokerage firm they can transfer to and still make their 2018 contributions that were withheld?

In calculating whether the plan has $250K, does one count receivables?

If somebody is making both pre-tax and Roth deferrals, what's the hierarchy for the SH match? If they are deferring 5% pre-tax and 5% Roth, does the match go 2.25% pre-tax and 2.25% Roth? What if it's like 8% pre-tax and 1% Roth? 4% pre-tax match and 1/2 % Roth? Would it be in the document?

Company A sponsors a plan with several participating employers. All companies are part of the controlled group. The plan allocates a basic safe harbor matching contribution that is based on annual compensation. An employee left Company A to work for Company B. While employed with Company A, the employee contributed and was receiving the safe harbor match. With Company B, the employee no longer deferred and therefore was not receiving the match during that time. When calculating the true-up, is the safe harbor match calculated using total compensation from both companies, or using only the compensation from the time at Company A when contributing?

Governmental (Indian Tribal) 401(k) Plan is using an FIS VS document. The FIS Volume Submitter document removes all ERISA items, but DOES NOT remove the IRS requirements normal for private plans. So, even though normal nondiscrimination testing, for example, is not REQUIRED by the IRS, the document requires it. To overcome this, the TPA did an "omnibus" type of amendment that, to paraphrase, says that notwithstanding any other language in the document to the contrary, the requirements of the IRC and regulations from which Governmental plans are exempt, shall not apply to this plan, specifically including but not limited to 401(a)(4), 410(a), 401(b), etc. Now, this probably works OK, but it would clearly take it out of pre-approved VS status and the corresponding automatic reliance. Should they have applied for a determination letter?

Does anyone have experience with 'post-Appeals mediation' with the IRS? Culd the mediation result in overturning the Appeals Office decision altogether or would it only be likely to reduce the liability assessed by Appeals (or affirm the Appeals position)?