401(k) Q&A | Plan & Industry Content From DWC - The 401(k) Experts

Can a Charitable Organization be Named as a Plan Beneficiary?

DWC 09/25/18

Facts Our company sponsors both a 401(k) plan and a cash balance plan. One of our employees is a strong supporter of a local charity. She does not have a spouse or children, so she would like to name the charity she supports as her beneficiary for both of our retirement plans.

Can a Company Freeze a 401(K) Account if an Employee Is Suspected of Stealing From the Company?

DWC 05/22/18

QOTW - 5.22.2018 - Can a Company Freeze a 401k Account if an Employee is Suspected of Stealing - Plan Distributions

Facts We just discovered that one of our employees has been stealing money from the company for quite some time. We fired him as soon as we discovered the theft, and we are working with the police and our attorney to determine what recourse we have. The employee has enough in his 401(k) account with us to cover most of what he stole, but he has ...

401(k) Distribution Rules: After Taking a Hardship Distribution, How Quickly Must a Participant Stop 401(k) Contributions?

DWC 05/8/18

Facts A participant in our 401(k) plan recently took a hardship distribution. We know we are supposed to suspend his deferrals for six months following the distribution, but we are not entirely clear on how strict that timing is and what happens at the end of the six months.

Is it Possible for a 401(k) Beneficiary to Waive Benefits?

DWC 05/1/18

Facts One of our employees who was a participant in our 401(k) plan recently passed away. He never submitted a beneficiary designation form; however, since he was married, we understand that his spouse is automatically his beneficiary. According to his spouse, there are enough other assets such that she does not want to accept the death benefit ...

Hardship Distributions Will Soon Be Less of a Hardship

Adam C. Pozek 02/9/18

In the wee hours of this morning, Congress passed a spending bill to end the most recent government shutdown that had just begun at midnight. Although the bill was focused on funding the government and dealt with military spending and other items, a couple of retirement-plan-related provisions managed to find their way in.

How Should a Plan Sponsor Handle Required Minimum Distributions For Missing or Nonresponsive Participants?

DWC 01/16/18

Facts One of our employees retired on July 31, 2017 at age 73. During her tenure with the company she was an active participant in the 401(k) plan, accumulating a balance while having never taken a distribution to date. Now that she’s terminated, I understand she’s subject to required minimum distributions, with the first one due by April 1, 2018.

What Are 401(k) Plan Forfeitures and How Can They Be Used?

DWC 10/17/17

Facts We have a 401(k) plan that includes several different types of contributions—employee deferrals, a company-provided safe harbor match, and a profit sharing contribution. The plan has a 6-year graded vesting schedule.

Who Must Receive Retirement Plan Blackout Notices?

DWC 10/3/17

Facts We have selected a new recordkeeper for our 401(k) plan. We are told that there will be a period of eight business days when our participants are not able to log in and manage their accounts. We know that we have to provide notice at least 30 days ahead of time to everyone who is affected.

Retirement Plan Termination: Are There Special Rules for Paying Out Account Balances?

DWC 09/26/17

Facts The owner of our company is retiring next year, and the business will close as a result. We sponsor a 401(k) plan that we know we need to terminate, and we want to get started right away so that we have plenty of time to wrap things up before the company is dissolved next year. There are several former employees who still have balances in ...

Is There a Specific Format or Required Content for a Beneficiary Designation Form?

DWC 09/19/17

Facts A participant in our retirement plan just passed away. When we were reviewing our files, we were glad to see that he had completed a beneficiary designation form. On closer review, however, we noticed that the form does not have the name of the plan listed. It has his name, details about his intended beneficiaries and even a stamp showing ...

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