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Full auditor's report. This might be the first time I have even heard of someone just putting the letter out there. We tend to repeat the attachments. It might be we take the report's version of the attachment and just use those if they are real long to save time but we repeat them.

Please ignore this post. I found an old topic and responses regarding this question. My search skills are getting better.

No.

1. My 2 Cents said earlier: "How do you get around the ERISA/regulatory mandate that in-service withdrawals can only be made if the hardship rules are met?" The Service has said this isn't an issue. 1.72(p)-1, Q&A 12: "Q-12: Is a deemed distribution under section 72(p) treated as an actual distribution for purposes of the qualification requirements of section 401...? A-12: No; thus, for example, if a participant in a money purchase plan who is an active employee has a deemed distribution under section 72(p), the plan will not be considered to have made an in-service distribution to the participant in violation of the qualification requirements applicable to money purchase plans. Similarly, the deemed distribution is not eligible to be rolled over to an eligible retirement plan and is not considered an impermissible distribution of an amount attributable to elective contributions in a section 401(k) plan. See also § 1.402(c)-2, Q&A-4(d) and § 1.401(k)-1(d)(5)(iii)." 2. As to the general issue, this has been debated forever (as can be seen by the number of topics devoted to it here). I don't have much to add to the above, except that 1.72(p)-1, Q&A 19 requires that after a default, subsequent loans must be repaid by payroll deduction pursuant to an agreement "enforceable under applicable law." However, this is conditioned on the following: "For this purpose, an arrangement will not fail to be enforceable merely because a party has the right to revoke the arrangement prospectively."

Tom, I hung several of your Grinch relatives on the tree last night. MY relatives also hang from trees, but they are hanging by one arm, while eating bananas with the other... FWIW - We've always taken the IRS approach for exactly the reasons specified.

Addressing only the first question: I know of no rules that would prevent assignment of more than 50% to the alternate payee. As a QDRO cannot increase the plan's liability, it would seem that 100% of the account balance to the alternate payee is the absolute limit for a QDRO. Perhaps the participant is keeping the $250,000 house, and the divorce agreement may (among other things) give the $30,000 car, 100% of the 401(k) balance, and other assets to the alternate payee to reach an equitable distribution of the joint assets. Presuming that both sides agree to the distribution of assets, it is not for the plan administrator to worry about the QDRO giving most or all of the plan balance to the alternate payee. Concerning the second, and not being an attorney, I would be a bit leery of a request to provide such a draft QDRO, especially if I did not know for sure that it was consciously agreed to by both sides. Wouldn't want to aid one side in defrauding the other! Would you still get paid if you sent the draft to both parties, pointing out the change in the cover letter?

Thanks, Dave! If we see a name of "ClevelandIndiansFan", we'll know who it is.

I'm saying no, preemption does not exist so that you can ignore or disregard state law. Preemption exists because federal law is supreme, and conflicts with state law is resolved in favor of the federal law. ERISA also expressly prohibits state law from governing an employee benefit plan. A state law requiring specific coverage under an ERISA health plan is preempted because it sought to govern an employee benefit plan. The issue in our thread is not as clear-cut. There is no ERISA requirement that the loan has to be repaid via payroll deduction. A state law prohibiting an employer from disregarding an employee direction to stop withholding from their pay governs payroll (or possibly employee rights), it does not govern employee benefit plans. Is it possible that a court could apply general or express preemption so broad that it would preempt a state payroll law that does is not in conflict with an ERISA requirement? Sure, it is possible. But absent that, I would not advise a client to disregard state law because of the general principle of preemption.

Offering lump sums to people 20 years out of the workforce is playing with fire. If the participant elected a straight life annuity in 1997 with spousal consent, would spousal consent be required in 2017 to switch the payment from a life annuity to a lump sum? Does your answer depend on whether the participant's current spouse is the same person who waived the QJSA in 1997? The participant may have been single then but is married now. If the participant was married, was divorced, and remarried, it is possible that the consent of both the former spouse (if living) and the current spouse would be required. It would, without question, be required if the elected benefit was a joint and survivor form (with the spouse as of 1997 being the joint annuitant). Please don't tell me that people with joint and survivor forms would not be able to elect lump sums if people with life annuity forms could! How can you make sure that the participant (and spouse, if married) completely understand the consequences of the election? The participant has been long retired and is advanced in age. Can an election to change the payment form from a life annuity to a lump sum be made by someone with a power of attorney or guardianship or can such an election only be made by the participant (and spouse) themselves? If someone is living in a nursing home that has guardianship over the retired participant, any idiot can easily see that the nursing home being able to act to switch from a life annuity to a lump sum is fraught with conflicts of interest. If it were up to me, the sponsor should bite the bullet and buy annuities, however much more they would cost. Making the offer should only be done after obtaining an IRS PLR that says it's OK.

Maybe it's a typo and they meant 'bungled'