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This is a matter of "where you draw the line" but I disagree (I think) with ETA. 99% of the time we (as a bundled service provider who provides QDRO services) receive DRAFT orders from an attorney for review PRIOR to getting the court to actually issue the order. The policy "sample" we provide indicates "If the Plan Administrator is on notice (verbal or written) regarding a Participant's pending domestic relations action..." then a "90 day" hold *may* be placed on the participant's account to protect the rights of the potential AP. If after 90 days something more substantial isn't forthcoming (a draft DRO or something else sufficient to cause the PA to protect the rights of the AP) then the hold is released. Sorry, but I don't think this is an area where "hard and fast" rules (eliminating discretion) are necessarily appropriate. Good judgment is a must.

In addition, may employers cover through the end of the month, regardless of when you terminate employment. Your daughter should definitely find out if that is the case with her current employer (they should tell her during her exit interview, but it doesn't hurt to find out sooner).

There was some discussion on this topic just a few weeks ago. http://benefitslink.com/boards/index.php/topic/59219-one-participant-plan-or-not/

Now, you can provide the additional $6,000 in nonelective (which may result in having to provide additional non-elective contributions to other NHCEs). If his election was to defer only $18,000; then you'd normally need another $35K in employer contributions to get to his $53,000 limit. You can, instead, provide $41,000 in nonelective to get to his overall $59,000 limit (and make $6,000 of the $18,000 deferred become catchup). You'd, then, have to contend with a larger reduction to his "Earned Income" after the additional $6,000 in nonelective plus whatever else is provided to NHCEs in order to pass nondiscrmination. Call me lame, but doesn't this get you pumped (at least a little) :-) Good Luck!

It seems to me that there are two issues being confused. I agree that true segregation requires a QDRO. But a hold only requires a QDRO procedure authorizing same. I thought there was case law on the issue. A very hazy memory tells me it was a Unisys case. Could be wrong.

Receipt of a DRO is easy. It's when you get the document signed by the judge. Receipt of "notice" of a coming DRO is the grey area. Best is to have procedures for both cases in your plan's QDRO Procedures. Until you get the signed DRO from the court, you are not required to do anything for the eventual AP. As you say, however, there is the spirit of the law factor. So, our procedure has a 90 hold after receipt of notice if the Participant is eligible to receive a distribution (if there's no possibility of a distribution, there's nothing to hold). There's no judgement call (no "may"), so it applies uniformly. We understand that this hold is not justified by the law and regulations, but only by the spirit of the law.

She will be eligible for COBRA from employer 1 to continue that coverage after that employment ends. She has 60 days to sign up for this COBRA coverage which will apply retroactively to the day she loses the employer-provided coverage, so she waits to see if she needs it. If it turns out she needs the COBRA continuation coverage to cover something that happens before employer 2's coverage starts, then she signs up for COBRA and pays a month's premium. While it's expensive coverage for the gap period, she doesn't have to sign up and pay for it unless she needs it. Stay safe.

I'm shocked, shocked I say, that someone from the IRS would give incorrect information! We could probably all fill volumes about some of these trials and tribulations...