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Congrats! Enjoy those new challenges - I think it is important to retire TO something rather than FROM something. Good luck!

Non-elective, yes, but for nondiscrimination I think you have a problem if the amendment benefited only or primarily HCEs.

The employer wanted a list of their own active and former participants with balances

for The Finway Group (Remote)View the full text of this job opportunity

ESOP Guy, your information aids my thinking; thank you. I advise plans, typically with tens of thousands of participants, for which a plan’s administrator does almost no work beyond instructing and overseeing the recordkeeper’s services. Because a recordkeeper wants no discretion, everything has to be specified as rules-based procedures, often so a computer-system record can apply the procedure, or at least signal beginning the procedure.

We do help our clients look for lost people who need an RMD as no one likes an uncashed check hanging on the books. We don't do it until very close to the RMD date or if the check really does go uncashed.

Thank you! And I'd love to have BenefitsLink take over that page. I've e-mailed you with information. Thanks, Bill! This is definitely bittersweet for me. I've been practicing employee benefits law for 46 years now, and maintaining my site for 28, and it's hard to walk away from all that. But I am 72, and it's time for a new chapter in my life. I've been accepted as a volunteer EMT trainee with a local fire department. That will be about a year of classes, practical training, and helping out the EMTs, after which I'll be certified as an EMT myself. Some questions have been raised as to whether I actually understand the meaning of "retire," which I hear is supposed to mean relaxing and playing golf or something. But I'm excited about the new challenges.

for DWC - The 401(k) Experts (Remote)View the full text of this job opportunity

Well, this would be a wonderful thing!

Hi Carol -- We'd love to have the database and create a page on BenefitsLink, with credit to you. Let me know how I can get it and make it easy for you. What is this retirement thing of which you speak? I thought it was only mythology 🙂 CONGRATULATIONS!

Thanks Peter, I have an earlier edition of that, and also Shulman's handbook, both of which are helpful but neither of which provide much insight on this issue. I also haven't had any luck with searching similar cases on Fastcase or even Google scholar. I think that of PA's who want to insist on particular benefit division formats, most of which are reasonable, they do not get much pushback precisely because they are reasonable, and if one makes the point that under some circumstance or another that accommodation needs to made, most are reasonably accommodating. It is only in this case among the thousands of others I have come across that the PA's position is unsupportable. As none of our neighbors here have identified any authority that might support the PA's position either, I think what happens next is, if the plan's counsel wants to back the PA's decision, a judge will qualify the order, which will then be served, prequalified, on the plan. The plan will then either do the calculation or continue to refuse, prompting a formal claim for benefits, which the PA may also refuse, at which point the remaining option is federal court. My experience with federal courts is that they tend to read the federal statutes strictly, though of course past experience doesn't guarantee future results. A strict reading of § 206(d)(3)(C)'s subsection (ii), with its multiple "or"s, and a lack of published legal interpretation supporting the PA's refusal, could be helpful, but hopefully it won't get that far if the PA wants to avoid litigation. Sigh. Thank you all for your input and insights, and if you think of anything else, I'll be grateful to hear it, even if critical.

If you want to look for courts’ decisions that might help support or attack an interpretation, consider: Mark W. Dundee, Qualified Domestic Relations Answer Book https://law-store.wolterskluwer.com/s/product/qualified-domestic-relations-order-qdro-answer-bk-pen-3-mo-subvitallaw-3r/01t0f00000J3FByAAN?srsltid=AfmBOoqOrI9sEYDQdNBQKGeaMsNfmf1vqBytfIqS2U9Ir2r27Y6QV2bE. There are not many appeals opinions. A Federal district court’s opinion is not a binding precedent anywhere, not even in the same district or even with the same judge. E.g., Camreta v. Greene, 563 U.S. 692, 709 n. 7 (2011) (“A decision of a federal district court judge is not binding precedent in either a different judicial district, the same judicial district, or even upon the same judge in a different case.”, quoting Moore’s Federal Practice § 134.02[1][d] (3d ed. 2011). See also Bryan A. Garner et al., The Law of Judicial Precedent § 3 (Horizontal Precedents) at page 40 (2016) (collecting citations and quotations).

Ms Carol, I don’t blame you but this makes me very sad. That page has been saved as a shortcut on my iPhone for years. I’ve referenced it countless times. Many, many thanks for doing this and saving me a small amount of brain space to use on other issues. I hope retirement is wonderful and lasts a very long time.

Pam Shoup, yesterday’s notice of proposed rulemaking does not answer, at least not clearly, your question. https://www.govinfo.gov/content/pkg/FR-2026-02-25/pdf/2026-03723.pdf ERISA’s § 105(a)(2)(E) is susceptible to several possible interpretations. That might be specially so at least until the rules and other guidance Congress directs in SECURE 2022 § 338 are published, effective, and applicable. About looking to an employer for an individual’s postal address if the individual still is the employer’s employee, many employers have records that are no more complete and no more accurate than the retirement plan’s recorkeeper’s records. Some employers’ records might be more outdated, and some might have false records. ESOP Guy, for a plan that has no small-balance cash-out and has an involuntary distribution only to the extent of a § 401(a)(9)-required distribution, what do you think about a plan-administration regime that doesn’t begin its extra efforts to refresh a no-longer-employed participant’s postal address until three years before one’s applicable age—thus, for someone born in 1960 or later, don’t search until the participant reaches age 72?

You would be right @Artie M that amending a QDRO would be easier, assuming the numbers are available to an alternate payee with which to do the math. The problem arises when the denominator is not available to an alternate payee. The numbers for a benefit in pay status are always available to a PA though, in this case one who refuses to cite any authority for rejecting a coverture fraction, making writing a QDRO that carries out a garden-variety property division impossible for such an alternate payee. Do you know of any authority permitting an ERISA plan administrator to reject DB orders using such a fraction, without citing any justification other than they just won't do it?

The rule for QDROs and RMDs is odd. See https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401(a)(9)-8#p-1.401(a)(9)-8(d)(2). YOu would think that once in a separate account it would be treated as the alternative payee's, but for RMD purposes it isn't. don't know why but that is what the Reg says. The alternate payee should consider @fmsinc's suggestion and roll the account balance into an IRA or she may be subject to this same RMD treatment next year, etc. That said, probably won't help with this year as the amount that is required to be an RMD this year normally cannot be rolled over. So, there likely would be two 1099-Rs issued, one with the RMD non-eligible rollover amount and one with the remaining eligible rollover amount.

I have now retired, and will no longer be updating my site. So for all of you who have been relying on my maximum benefits and contributions page for historical limits, it is unlikely I will be updating it and I may take it down at some point. However, I do have the database with all the limits back to 1996. If anyone wants it so that they can develop their own page, let me know.

I assume the participant had a 401(k) plan. To what type of plan did the alternate payee transfer his/her interest? To his/her exiting eligible retirement account that happened to be a 401(k)? Why not suggest to the alternate payee that he/she move his/her account to an IRA so he/she will be happy. On top of the foregoing, I am pretty sure the Fidelity table is a single life annuity. https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/UniformLifetimeTable.pdf Table I (Single Life Expectancy) is used for beneficiaries who are not the spouse of the IRA owner - whatever that means, and your client is not the spouse. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds So it may be that one time in the history of the universe Fidelity is right. David

I did not read all of the posts in the thread but the OP states that payments are "in pay status". Maybe one of the posts stated that benefits are not in pay status... if so, disregard my post. This is because I view a coverture fraction only helpful when benefits are not "in pay status", i.e., benefits are going to start at a later date. Like you said, it is used because you know the numerator but do not know the denominator. The fraction allows for adjustments for the participant's additional service time post-divorce for which the alternate payee should not receive a benefit. For example, QDRO issued in YR 1 awards 50% of the coverture fraction. QDRO states at divorce the participant has 10 years of service and the alternate payee and participant were married for all of those years. When the participant retires in YR 21, they would have an additional 20 years of service. Benefits begin to be paid, so the alternate payee's portion of the monthly benefit payment would be 50% x 10/30 of the monthly benefit. The coverture fraction is needed to ensure the alternate payee does not benefit from the additional service when the payment start. If, as stated in the OP, payments are already started, I don't see a problem with amending the QDRO to do the math... using the example... the QDRO would simply state that the alternate payee should receive 16.67% of the monthly benefit. I am not saying the plan administrator is correct, I am just saying, practically speaking, amending the QDRO would be easier than arguing with the plan administrator or taking them to court.

@Peter Gulia I have met those judges too Peter. The question remains though, can you or any neighbors here think of any authority that permits an ERISA plan administrator to reject DB orders using a coverture fraction, without providing any justification whatever, other than they just won't do it? If anyone can think of such authority, I am open to learning what it is. I agree that less expensive and more effective means are usually preferable (particularly in the current political climate), and certainly there are never any guarantees in litigation. However, it seems to me that forced means are not limited to subverting parties' rights, a plan administrator's 'meh' undermining many states' domestic relations schemes without any authority is a problem much larger than one QDRO. @fmsinc Thanks for relaying your experience David. Like you, I push back, and in this case already requested they escalate the matter to plan counsel. We'll see what that individual has to say.

The delinquent filing of a 5500 form would be under the DFVCP, an operational failure (i.e., an IRS issue) would be under the VCP as contained in EPCRS, and if there is a fiduciary breach regarding the real estate held in an ERISA-governed plan that would be under the VFCP (it the breach is eligible for correction under that program). Alphabet soup.... If your fear is a potential fiduciary breach or prohibited transaction regarding the purchase or sale of real estate using plan assets, your client should at some point contact an ERISA attorney. If you are not an attorney, you should not engage in the practice of law.

I had Fidelity pull that on me with respect to an ERISA qualified defined benefit plan. Their model order (that they consider sacrosanct) required that the Alternate Payee's share be ___________% or $______________. No option for what we call in Maryland, the Bangs formula: 50% of the gross annuity multiplied by a fraction where the numerator is the number of months during the marriage that the Participant accrued creditable service toward retirement, and the demoninator of which is the total number of month of creditable service at the time of retirement = equals the amount due to the Alternate Payee. I wrote to them and patiently explained that 26 USC 414(p)(1)(B)(2) [IRS equivalent of 1056(d)(C)(ii)] provided --- “(2) Order must clearly specify certain facts - A domestic relations order meets the requirements of this paragraph only if such order clearly specifies— “(A) the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order, “(B) the amount or percentage of the participant’s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined, “(C) the number of payments or period to which such order applies, and “(D) each plan to which such order applies." ...and suggested that neither they nor the Plan Sponsor nor the in house Plan Administrator had to right reject a simple formula that has been adopted almost universally in the USA. They went through a few layers and it finally got to their attorneys you approved my language. But it took almost a year and my pointed out to them that they have a fiduciary duty to the Participant and the Alternate Payee and BTW who is your resident agent for service of process. On the other hand I can see where a Plan would not accept a coverture fraction QDRO if the allocation was in the form of a separate interest and was already in pay status. I am pretty sure that you can only use a coverture fraction with a shared interest allocation. There may be another wrinkle since ERISA plans don't require a divorce in order to transfer pension and retirement plan benefits so long as the parties a "legally separated" pursuant to a Court Order. In the absence of a divorce how do you compute the numerator of the coverture fraction or do they use the date of the legal separation. In South Carolina they use the date the Court approved the Marital Settlement Agreement even though it may another period of time that they have to wait until the divorce becomes final. Go to: https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/division-of-retirement-benefits-through-qualified-domestic-relations-orders.pdf and find Q 1-8: Must a domestic relations order be issued as part of a divorce proceeding to be a QDRO? "No. A domestic relations order that provides for child support or recognizes marital property rights may be a QDRO, without regard to the existence of a divorce proceeding. Such an order, however, must be issued pursuant to state domestic relations law and create or recognize the rights of an individual who is an “alternate payee” (spouse, former spouse, child, or other dependent of a participant). And see - https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/qdros.pdf [Reference: ERISA § 206(d)(3)(B); IRC § 414(p)(1); Advisory Opinion 90-46A*; see Egelhoff v. Egelhoff 121 S. Ct. 1322, 149 L. Ed. 2d 264 (2001); see Boggs v. Boggs, No. 97-79 (S. Ct. June 2, 1997), see Boggs v. Boggs, 520 U.S. 833, 117 S. Ct. 1754 (1997)] *You can find this at - https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/advisory-opinions/1990-46a.pdf David Goldberg 301-947-0500

Add another voice that is objecting to the annual part of this idea. We look for or advise our clients to look for people when it is relevant. Although places like Inspira people send a lot of forced out to IRAs to them does an annual search. Not sure if it is part of the base fee they charge those IRAs or an add on What I do know is that a few hundred in an Inspira IRA needs to have an incredible rate of return to not have the balance go down annually.

In the current environment of online enrollment/automatic enrollment and estatement delivery, getting employee addresses for mailing purposes can be like pulling teeth. Years ago, we requested W-2s for plan testing purposes and could get addresses from those. Today, everything is done electronically, and address information is not necessarily provided. I know that this question is specifically with regard to participant distributions. However, with the upcoming regulations about once a year paper statements coming into effect, that is going to add an additional burden on someone (PA or outsourced to the RK) to keep track of missing participants. If statements get returned by the post office with no forwarding address, what is the regulation going to specify about lost participants and their paper statement delivery? If the participant is active, a request is going to need to go to the employer for an address update and there should not be a fee for that. RKs should be asking employers to update addresses to prepare for the paper statement rules. If the participant is terminated and the employer does not have a good address, an address search will need to be conducted and $30 to cover that cost is probably reasonable, considering all the possible steps that need to be followed, including any locator search fee.

that depends. by current participants do you mean people with balances? actives with balance? terminated people with balances? actives who are eligible but do not have a balance? if the MEP is relying on the individual employers to send them a census each year, they might not know who the current participant are, just who has balances and who was current as of the most recent year end. If the MEP is also the recordkeeper/custodian/and 3(16) provider it will vary.