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Can a non-electing (non-ERISA) church plan pay a benefit to a former spouse while the participant is still employed and has not yet reached age 50?


Guest Patrick Foley
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Guest Patrick Foley

Can a non-electing (non-ERISA) church plan pay a benefit to a former spouse while the participant is still employed and has not yet reached age 50? I think so.

I don't believe an ERISA plan could pay the benefit before the participant reaches age 50 or terminates (due to Code section 414(p)(4)(B)), but for a church plan, 414(p)(11) appears to treat a DRO as a QDRO without regard to 414(p)(4). And 414(p)(13) appears to shield the plan from any 401(a) violation in connection with an order treated as a QDRO. Based on that, distribution to the former spouse of a 35-year-old active participant should be OK.

Am I missing anything here?

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The nonalienation provisons of IRC 401(a)(13) do not apply to church plans which are exempt from vesting under ERISA. See last sentence following the end of IRC 401(a)(34). Therefore there is no prohibition on paying benefits to an ex spouse under a church plan. Second reg 1.401(a)-(13)(g)(3) permits payment of retirement benefits under a QDRO to a ex-spouse prior to the date the benefits would otherwise be payable under the plan. Also (p)(4)(A)(ii) deems the date payments begin under the QDRO as the date the participant retired.

mjb

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