It isn't entirely clear to me as to who can be excluded when performing the eligibility test. Treas. Reg. 1.105-11(c)(2)(iii) lists certain categories of employees who may be excluded. But if some of these people already are eligible to participate, it doesn't make sense to exclude them. For example, one can exclude employees with less than 3 years of service. Suppose the plan already allows everyone with 1 year of service to participate. I'd include anyone already eligible to participate, in the testing. Anyone else have a different opinion?

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I have an ESOP that defines Normal Retirement Age (NRA) as age 65 and 5th Anniversary of Participation. When the plan started it was a 9/30 PYE. The first PYE was 9/30/2015. In 2016 they switched to a 12/31 PYE. So they have a short plan year of 10/1/2016 to 12/31/2016. I have a person who entered on 10/1/2014 (the Effective Date of the Plan). As of 12/31/2018 he is over age 65. Does he have his 5th Anniversary year? Do you count it as PYE 9/30/2015, 9/30/2016, 12/31/2016, 12/31/2017 and 12/31/2018, which comes to 5, or do you count actual anniversaries 9/30/2015, 9/30/2016, 9/30/2017 and 9/30/2018, which comes to a count of 4 by the time the person terminates? It makes a difference because his YOS for vesting are at 5 (he got a YOS in the short plan year). But this is a 2/20 vesting schedule, so by YOS he is 80% vested. If he's hit his NRA, he's become 100% vested.

Company A acquired Company B in a stock transaction. Company B's ESOP was terminated by Company B just prior to the transaction, as required by the purchase agreement. Company A is now responsible for winding up the ESOP, right (because Company B no longer exists)? Company A executive keeps telling HR not to worry about the Company B ESOP because it was terminated before A bought B -- but in a stock transaction, that's irrelevant, isn't it?

ESOP was terminated August 1 due to an acquisition, and a request for favorable determination letter was filed. Trustees (execs of plan sponsor) have been operating as the Plan Administrator based on the plan terms stating that if the Company fails to appoint a Committee as Plan Administrator the Trustees shall act as the Plan Administrator. Is there any issue with appointing other individuals to serve on a Committee as the Plan Administrator after the plan has been terminated, in order to oversee the distribution and wind up activities? That's not something that must be "frozen" on the termination date, is it?

(New York state.) My ex-wife received a portion of my annuity (via the first executed QDRO), medical benefits through me for life, and cash as part of our divorce settlement in the '90s. The QDRO was signed by all parties, by the judge, and was filed. Flash forward to now. We recently began to process of receiving my pension and annuity. My union demanded that a waiver be sent to my ex-wife for her signature. She has refused to sign, has lawyered up, and has filed another DRO (already accepted by the plan administrator) with the judge ,who has also signed and delivered the papers to me. I would like to fight this, as I’ve seen the chances of her winning aren’t great, and I want to know what the logical and rational response to the judge should be. I had planned to file a motion indicating, among other things, that the pension was NOT a part of the divorce settlement. There are no minor children involved. Any help will be greatly appreciated!

The IRS says the Summary Plan Description has to be delivered within 90 days after a participant enters the plan. If the participant is given the SPD before becoming eligible for the plan, does that satisfy the delivery requirement?

It was discovered in 2019 that a rollover received in 2017 from an outside plan into a 403b plan included after-tax contributions. The plan that received the rollover specifically says in its document and SPD that it does accept after-tax dollars as rollovers. Can the plan distribute the ineligible after-tax money to the participant, with earnings, and do a 1099-R for the current calendar year? Or does the plan try and send the ineligible after-tax funds back to the distributing plan and ask that plan to correct the 2017 1099-R? What about the earnings? Are they taxed in the year distributed, or in 2019? Could the participant do an In-Plan Roth Rollover or transfer in the current plan?

Would uncashed checks still be considered assets of the plan if they remained uncashed into a new plan year? For example, 401(k) plan terminates on September 15, 2018. All checks are written and other distributions made by September 14, 2019. Someone doesn't cash their check until January 2020. Does the plan need a 2020 5500 and audit? Does the uncashed check mean all assets are not out of the plan within 12 months and the original termination date of September 14, 2018, is no longer valid?