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An order to pay a person other than an alternate payee is not a QDRO. But a QDRO may direct payment to an alternate payee in an amount that reflects attorneys’ (or a guardian’s) fees within the child support ordered. See Trustees of Directors Guild of Am. Producer Pension Benefits Plans v. Tise, 234 F.3d 415 (9th Cir. 2000), amended by 255 F.3d 661 (9th Cir. 2001); see also Orlowski v. Orlowski, 459 N.J. Super. 95, 208 A.3d 1 (N.J. Super. 2019) (including in an amount awarded to a former spouse alternate payee an amount for the portions of attorneys’ and accountants’ fees allocable to their work in enforcing rights that could themselves be a subject of a QDRO). The smarter lawyers figure this out before one sends you a draft order. Others learn how to do it after you say an order that calls for a payment to a person other than an alternate payee would not be approved.

Does the plan document have language authorizing a LS upon plan termination? Or could it be amended so?

If the plan’s provision is no more restrictive than the tax-law rule: One hopes the claim form has the claimant state, under penalties of perjury and other false-statement crimes, that the hardship distribution is for: “Costs directly related to the purchase of a principal residence for the [participant][.]” 26 C.F.R. § 1.401(k)-1(d)(3)(ii)(B)(2) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401(k)-1#p-1.401(k)-1(d)(3)(ii)(B)(2) I read the phrase’s syntax to set a condition that the property bought, or to be bought, be or become the participant’s principal residence. I do not read it to require that the participant be or become an owner of that property. Others might interpret the rule differently. I do not give advice to anyone.

That is the question asked by seekers of the Holy Grail.

😂😂

Also, I'm not a lawyer, but is it a factor if the state is a community property state, so the primary residence is technically hers? Sometimes if the spouse has debt in their name, a better interest rate can be obtained through the lender if only one spouse applies, and they meet all of the income requirements by themselves.

Maybe its me, but if the installment payments were not irrevocable then they're not really installment payments. What is the duration of the installment payments that is problematic? Or are we talking about someone who started taking distributions before age 59 1/2 and did installments to avoid the premature distribution penalty?

I think it satisfies the "principal residence" criteria but I am not a lawyer. That said taking a hardship distribution to buy a property in someone else's name seems like the height of financial stupidity on the participant's part but it's not my money.

Were the (so-called) installment payments elected irrevocably? I'm not really sure what to make of this; if we have RMDs we pay them one at a time and don't call them installment payments. Also not sure how a MP plan would not be subject to QJSA rules.

On the "Leaderboard", if you have the white banner just below the main blue menu

Just read Q35 to DOL FAB 2008-04, it's 10% of the prior year's amount "handled", so unless one wants to get retentive and look for the highest asset value at any point during the prior year, I like the prior EOY/current BOY thinking.

For the micro market (in the 1990s), I saw fidelity-bond insurance contracts that stated the coverage limit not by an amount but by a formula. For example: The Coverage Limit is the lesser of $500,000 or 10 percent of the funds the Insured handled, but no less than $1,000. Is it still done that way?

We see this very consistently now.

In my experience they say the plan is covered for $X but the coverage will increase to the amount required by ERISA (which is 10% of BOY assets). That's why I generally put 10% of opening assets for the bond.

Building on Peter's latest response, another factor worth considering is whether the church or association or convention of churches made the election described in Code Section 410(d)(1). If it did, then the nondiscrimination provisions would nevertheless apply. Please note that, once made, the election is irrevocable.

Typically the inflation guard rider requires the bond to cover 10% at the time it's purchased, and only then would the increase be in play if needed. (Still waiting for my first claim on their bond.) I used to do 10% of the BOY asset value on the 5500, but I forget the specifics as to why it wouldn't have been the EOY value.

I thought they were quite common in the small plan market. I'd report 10% of the assets as the bond amount as I'm fairly certain that most of those increase bond protections are capped at the lessor of 10% of assets or $500,000 if you read the fine print.

I think either is acceptable, though with one man plan, I believe it is more common to open a separate ROTH brokerage sub-account to easily track the G/L between sources and transfer from the non-roth to the roth on the conversions. and if the brokerage house will be responsible for 1099-Rs I would absolutely want to set up a 2nd account for the ROTH piece rather than try to argue with them when the eventual distributions are done.

The American Institute of Certified Public Accountants’ Auditing Standards Boards’ Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, Statement on Auditing Standards No. 136 (July 2019) applies only for audits of the financial statements of an ERISA-governed employee-benefit plan. Its first numbered paragraph states: “This SAS should not be adapted for plans that are not subject to ERISA.” If your engagement’s scope is only an audit of a church plan’s financial statements with no added agreed-upon procedures, your firm might evaluate whether it is necessary or appropriate to consider whether the plan meets or fails an Internal Revenue Code § 403(b)(1)(D) non-discrimination condition. Even a failure of such a condition might be immaterial, insignificant, or even irrelevant, in some circumstances, to a plan’s financial statements. Consider also, in a particular church plan’s facts and circumstances, whether a § 403(b)(1)(D) nondiscrimination condition applies. See I.R.C. (26 U.S.C.) §§ 403(b)(1)(D), 403(b)(12)(B), 3121(w)(3)(A) (referring to “an elementary or secondary school which is controlled, operated, or principally supported by a church or by a convention or association of churches”).

Assuming you have tracked the sources, generally speaking yes you can convert the after tax source and not the pre-tax source assuming the plan doesn't further restrict this. Basis converted is not taxable, gains on the after tax tax funds converted are taxable and I'm not 100% sure but I think if you are not converting 100% of the after tax source (basis and gains) I believe your need to prorate which potion is basis converted to Roth (non-taxable) and which portion is gains converted to Roth (taxable). And each conversion has it's own 5 year aging period.

Unless you’re already confident that the school’s plan is administered by or under the control of a church so that it is a church plan not governed by ERISA, your firm might evaluate whether the plan is “non-ERISA”. The plan provisions you describe seem logically inconsistent with saying there is no plan the employer established or maintains. After you’ve sorted out what kind of plan this is (and the scope of your engagement), you’d consider whether you should consider a nondiscrimination issue, and (if you do) which tax-law provision governs.

My plan document has 4 choices for coordinating language. I'm pretty sure you need to address how the T-H minimum is provided if you don't provide it in both plans. This is from our DC plan, but there is similar coordinating language in the DB plan. We almost always use B. A - The full top–heavy minimum will be provided in each plan (if selected, Plan Section 4.3(i) will not apply). B - 5% defined contribution minimum C - 2% defined benefit minimum will be made in the (enter the name of the other plan) D - Specify the method under which the plans will provide top-heavy minimum benefits for Non-Key Employees:(enter method here) (Must be nondiscriminatory, preclude Employer discretion, and avoid inadvertent omissions).

What do the documents say? If the documents says the 5% TH minimum is provided in the DC plan than the 5% TH minimum is provided in the DC plan even if it is more than what is required for gateway or 401(a)(4) testing.

I think they'd just be on the hook for a THM, then. Whether that's 3 or 5 depends on whether he's in an excluded class of employees, versus just being a participant with a 0% benefit formula on the DB side. If you make him completely ineligible from the DC plan, too, then you owe him nothing, and he still counts in the tests as a zero.

If the GAL fees are considered to be in the nature of child support, a QDRO can be used to collect them. See In re: Blaemire, 229 B.R. 665 (1999), - that you can find at https://scholar.google.com/scholar_case?case=7414914616513795651&q=goldberg+v.+miller&hl=en&as_sdt=4,21 holding that attorney fees awarded for representation of children are in the nature of child support and are not dischargeable in Bankruptcy. It contains a very comprehensive analysis of case law relating to this issue. On the other hand, Goldberg* v. Miller, 371 Md. 591, 810 A.2d 947 (2002) https://scholar.google.com/scholar_case?case=7414914616513795651&q=goldberg+v.+miller&hl=en&as_sdt=4,21 held that Maryland did not consider the fees of a GAL to be in the nature of child support. *The "Goldberg" was me, and I never collected a dime. At the legal judgment rate of interest of 10% he owes me north of $45,000 but made himself judgment proof. But I keep renewing the judgment every 12 years.