Leaderboard

It is uncommon because of administrative complexity, such as monitoring for delinquent payments, and the ability of a participant to elect to default. There is nothing wrong with payment arrangements other than payroll deduction, but they increase potential concerns for the fiduciary..

1. What does this have to do with the Form 5500 filing? 2. If you are talking about a defined benefit plan, I don't think that either the participant or the alternate payee can be required to pay for the expense of administering the QDRO.

Why do you even bother get involved in this question? The plan sponsor and plan administrator have engaged you to do a service. They ought to pay you for that service. if they want to collect from the participant or alt payee (or some combo) that is their business. The sponsors I work with have always accepted the idea they are going to pay us. Everyone has agreed this is what is meant by an "out of scope service" that is part of our engagement letter. The EA is clear they will pay time and expenses for requested out of scope services. We do enough QDRO reviews I can tell him the amount of time it will take to do a normal review and I let them know if something comes up that will make this beyond a normal review.

Look in the document for provisions allowing a transfer of assets. If it is there, it should let you transfer this participant's entire balance from Plan A to Plan B. Our VS document allows this type of transfer if Trustees of both plans agree to the transfer. If the plans have different provisions, there may be some features of the transferred funds that have to be maintained after the transfer. Giving service credit for service with an unrelated entity can be done. Any pre-approved document should have that as an option.

Unless those other employees never worked more than 1,000 hours in a year, I don't see how the plan doesn't fail coverage each and every year. Remember, they may have waived participation, but they are still counted in 410(b) coverage testing as eligible, not benefiting. Do the owners make 401(k) contributions? If so, how can the ADP test pass any given year? [side note: did they irrevocably waive participation, or just chose not to make deferrals? If the former, something doesn't seem right. ]