A participant in a large 401(k) plan passed away earlier this year. There is a legal case pending regarding his beneficiary designation. (The girlfriend appears to have gone online and changed it to herself the day before participant passed away; family is contesting it.) The lawyer for the girlfriend has sent a letter to the plan sponsor telling them that they should invest the account balance in a QDIA. So a couple of questions have come up. [1] What fiduciary duty would there be for the account when the participant has died and beneficiary is unknown? (This plan has full participant-directed accounts.) [2] Should access to the deceased participant account be closed to others? (It appears the girlfriend still has view-only access to the deceased participant"s login information.) Additional information on the investments -- the overall earnings on the account year-to-date are over 20%. Market fluctuations recently have decreased the value.

Is there ever a disadvantage in having a safe harbor match plan based on compensation from the date of entry?

For purposes of determining whether a participant has a permissible distribution event under Code section 457(d)(1)(A)(ii) due to severance from employment with the employer, do the controlled group rules apply? In other words, must a participant terminate employment with all members of the controlled group in order to be eligible for a distribution? I would think so, since Treas. Reg. section 1.457-6(b)(1) references the regulations under Code section 401(k) (which obviously require a termination with all employers in the controlled group). Is anyone aware of more specific guidance on this point?

Suppose a Standing Election was signed by plan sponsor in 2016 that includes language that the plan will use the COB/PFB to apply towards the minimum required contribution in order to avoid an unpaid required contribution. The 2018 minimum required contribution is $100k and the plan has a $150k prefunding balance. The prior year use balance percentage is over 80%. Can the prefunding balance be used to satisfy the 2018 minimum contribution relying on the standing election that's in place? Or does a new election need to be signed that specifically states the amount of the prefunding balance that will be used to satisfy the minimum for the year?

John owned Company A and had a DB Plan for six years. He sold Company A in an asset sale (not a stock sale). John, after the sale, immediately opened Company B that does different services than what A offered (i.e., it's a new type of company). He wants to contribute this year and get a deduction. [1] Can his Company B just become an additional sponsor and adopt the DB Plan that his original company A had? If he starts a new DB for his new company then he will not have any prior service for the first year of this plan and his maximum contribution will be low. Company B is most likely in a controled group with A because both are owned 100% by John, but we would rather have Company B join the plan of Company A by becoming an additional sponsor of Company A's plan. John wants to close down company A. [2] If he can adopt and becomes a new sponsor of the Plan that Company A had, can he close down Company A or should he keep it open?

Company 1 sponsors a 401(k) plan with a safe harbor match with a 12/31 plan year end. Company 2 is a participating employer. Companies 1 and 2 were members of a controlled group until Company 2 was sold in a stock sale to unrelated parties in January 2019. The new owners of Company 2 mistakenly thought they could continue to participate, so they remitted January deferrals to the plan. Those deferrals were returned by Company 1, essentially freezing them from participating in the plan, and Company 2 returned the deferrals to the employees, with a notice that deferrals are not being accepted into the plan. Company 2 now is looking to establish its own safe harbor plan. There is the question of whether this should be started as a new 401(k) plan with a safe harbor match or a spin-off of an existing plan. If a new plan, I think there would be an issue of violation of the successor plan rules. If a spin-off, then you have the operational failure of the missed opportunity for deferrals and missed safe harbor contribution issue. I guess if spin-off, it is possible to use the safe harbor correction under EPCRS of 25% of missed deferrals and 100% of missed match, plus earnings if provide notice within 45 days of correct deferrals. I would appreciate hearing your thoughts on this.