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Cuse - Jimmy Hoffa's body can undoubtedly be found in my wife's pocketbook, along with the lost city of Atlantis, several hundred pounds of loose change, pay stubs and sales slips dating back to 1981, rotten bananas, several dozen pens, and a Civil War cannon. And that's not even the main compartment!

I was reluctant to ever raise fees, but my business partner made me see the light. Rather than just implement a simple fee increase, we used this as an opportunity to rethink and rework our fee structure. Among the changes: 1. Moved from billing annually after the annual report is delivered, to quarterly (in advance) on the first day of each calendar quarter. 2. Increased fees under the new quarterly billing cycle - we didn’t flinch about substantial increases to ensure that the new fees were fair to us and to clients. 3. Implemented 100% offset of any revenue sharing to quarterly billings. 4. Started annual fee increases - so it was expected by clients. We rolled the changes out with a special mailing to all clients - about 4 or 5 months before 1/1 explaining the changes and included what the new quarterly fee would be. Then we followed that with new service agreements and updated plan level and participant level fee disclosures, as needed. Our objective was to get it right so we wouldn’t have to go through this again. The changes were a huge improvement in cash flow, reduced complaints about large annual billings and enhanced us as an attractive acquisition when it was time to sell.

But the embarrassment or frustration of whichever person advised or decided the reporting of the nonemployee compensation might fade if it is feasible to design a separate retirement plan for each director, perhaps with annual additions up to the § 415(c) limit or accruals up to the § 415(b) limit (but subject to coverage and nondiscrimination conditions).

According to a report from the Pension Benefit Guaranty Corporation’s Office of Inspector General, the US overpaid the Central States teamsters pension plan about $127 million because an application for special financial assistance reported 3,479 participants who had died. “While the [PBGC]’s review process required Central States to provide a list of all Plan participants and proof of a search for deceased participants (death audit), the [PBGC] did not cross-check the information against the Social Security Administration’s (SSA) Full Death Master File (DMF)—the source recommended by the U.S. Government Accountability Office for reducing improper payments to deceased people. (The Full DMF is more accurate than any database private pension plans have access to[,] and is used by the [PBGC] in its other insurance programs to ensure proper payments of pension benefits to plan participants).” Deceased Participants in the Central States' Special Financial Assistance Calculation.pdf

Isn't this simple? They are not employees. So why should they be eligible to participate?

I think you can honor the contemplated second QDRO, if a state court is willing to issue it. The QDRO regulations specifically provide that a QDRO does not fail to be a QDRO merely because it alters a prior QDRO to reduce the amount of the benefit that is payable. 29 CFR § 2530.206(b): (b) Subsequent domestic relations orders. (1) Subject to paragraph (d)(1) of this section, a domestic relations order shall not fail to be treated as a qualified domestic relations order solely because the order is issued after, or revises, another domestic relations order or qualified domestic relations order. (2) The rule described in paragraph (b)(1) of this section is illustrated by the following examples: Example (1). Subsequent domestic relations order between the same parties. Participant and Spouse divorce, and the administrator of Participant's 401(k) plan receives a domestic relations order. The administrator determines that the order is a QDRO. The QDRO allocates a portion of Participant's benefits to Spouse as the alternate payee. Subsequently, before benefit payments have commenced, Participant and Spouse seek and receive a second domestic relations order. The second order reduces the portion of Participant's benefits that Spouse was to receive under the QDRO. The second order does not fail to be treated as a QDRO solely because the second order is issued after, and reduces the prior assignment contained in, the first order. The result would be the same if the order were instead to increase the prior assignment contained in the first order. A prior commenter noted that the contemplated DRO may not qualify as a QDRO because it does not technically assign any benefits to the AP. However, even if that is a correct reading of the law, you could effectively get around it by assigning $0.01/m to the AP (and then if you really wanted to get it to zero--which is probably not necessary as a practical matter when you are only worried about a Medicaid income threshold--you could simply have her disclaim the $0.01/m benefit). Or, if benefit payments have already commenced, you could argue that the new QDRO does assign a benefit--it assigns the monthly benefits that are payable through a particular cutoff date. You could also argue that the requirement is satisfied because the second DRO "recognizes" the existence of the AP's rights to any benefits that were previously assigned and which have already been paid, even as it revokes the AP's right to future payments. There are also several arguments you could make for simply recognizing the subsequent DRO directly. Three possible options occur to me: (1) permit the ex-spouse to disclaim her benefits under the QDRO, and take the position that the result is that the benefits are payable to the participant, rather than simply ceasing to be payable altogether (which is not immediately clear to me), (2) treat the new order as a new QDRO and determine whether it satisfies the requirements to be a QDRO, or (3) treat the new order as a modification of the prior QDRO and determine that the modification can be taken into account. Disclaimers of retirement benefits are generally permissible if permitted under plan terms/procedures which are complied with. The result is that the benefit is payable as though the disclaimant died prior to the date the benefit became payable. The original QDRO likely specifies what happens when the AP dies. Take a look at those terms and see if they would provide the desired result if triggered early. As a practical matter, who is going to sue? The parties agree on what they want to happen. It doesn't result in increased benefits payable from the plan. The IRS or DOL could theoretically take an interest on audit, but that seems unlikely. The biggest risk, from my perspective, is that the AP will turn around several years from now and argue that the second DRO was invalid, and thus she is entitled to the benefit payments after all. Given that the plan stopped paying the benefits to her at her express request when they see the complaint, the judge is likely going to raise several eyebrows (however many eyebrows they possess).

Agreed. This is not a sign of fraud in any way. Central States has 360,000 participants so they found < 1% were deceased. They received $36 B in SFA. Yes, $127M is a big number but it is only .35% of what they received. Also, not like that money goes into anyone's pocket - other than truckers and other pensioners who use it to live on. PBGC has changed their procedures and now do their own data scrubs before the SFA filing is reviewed. Previously, funds needed to show documentation that they scrubbed the data, but now, PBGC does it for them.

To correct my post, the Relius document does give a choice to exclude or include LTPT employees in automatic enrollment. So it appears the employees who can be treated differently for automatic enrollment are (1) LTPT employees and (2) disaggregated employees. This is based on the automatic enrollment uniformity requirement.

I am assuming you are talking about a defined contribution plan. I am assuming that the divorce is final, and that the QDRO was signed by the Court. and that a certified copy of the QDRO and was sent to the Plan Administrator, and that the Plan Administrator approved the QDRO, and that no appeal of the Divorce Decree was filed by either party. If I am incorrect in any of these assumption, let me know. A timeline is essential. Some states provide that the court will lose jurisdiction to modify (including a recission) a QDRO within a certain number of days after the entry of the QDRO (e.g. after the time to revise a Court Order has expired), or after the expiration of the applicable statute of limitation that can be many years down the road. Res judicata will apply. Some states will not permit a modification (including a rescission) of a QDRO under any circumstance if it changes the terms of the underlying Divorce Decree. Res judicata will apply. Some states will permit a modification (including a rescission) of a QDRO even though it changes the terms of the underlying Divorce Decree but only if the Court has reserved jurisdiction in the Divorce Decree to do so. Some states view a QDRO as the source of the obligation to transfer pension and retirement assets from one party to the other. Other states view a QDRO as a tool, like an attachment or a garnishment, to enforce the Divorce Decree. The ability to modify it or rescind it will differ depending how they view it. I found this online: "The question of whether retirement savings plans, such as IRAs, 401(k)s, and pensions, impact Medicaid eligibility is complicated. There are no federally set rules on these plans and Medicaid eligibility; each state sets its own rules. Adding to the complexity are other variables, such as the type of retirement savings plan, payout status, payout amount, one’s other income and assets, and marital status. "The bad news is that it is likely an applicant’s retirement savings plan will be considered by Medicaid as either income or an asset when determining eligibility for long-term care. The good news is that most candidates can still gain Medicaid eligibility and preserve some or all of their savings for a spouse or another family member. "In states that consider a Medicaid applicant’s retirement savings account as an asset, it will count against Medicaid’s asset limit for eligibility. Some states will exempt one’s retirement account if it is in payout status, and therefore generating income. However, the payments are considered as income and will count against Medicaid’s income limit for eligibility. While this does not automatically mean the candidate will be Medicaid-ineligible, this is common because Medicaid’s income and asset limits are so low." You need to check with the eligibility requirements for Medicaid in the jurisdiction in which she resides. It may not be as onerous as she imagines. It may be that she can elect to take her 401(k) as an annuity. The payments will count as income, but the total amount will not impact Medicaid eligibility. And it may only impact long term care eligibility. See - https://www.medicaidplanningassistance.org/medicaid-eligibility-401k-ira/#:~:text=California%2C Florida%2C Georgia%2C and,payments are counted as income. Good luck, DSG

Jokes and laughs aside, in fairness the report did not suggest a failing of Central States, Southeast & Southwest Areas Pension Plan. Rather, the report criticizes the PBGC for not using the full death master file, a resource not available to Central States. https://oig.pbgc.gov/pdfs/SR-2023-10.pdf

Wait, teamsters and possible pension fraud? Never would have crossed my mind in a million years, where is Jimmy Hoffa when you need him? If I end up next to him in the next few days you all know who did it - you won't find me, though, but if you a paint imperfection in the NY Giants or Jets logo in the Meadowlands end zone, that's probably where I'll be - LOL!

I agree with Paul I. And would add that you can monkey-do this, i.e. just follow the document and not question it, or you can ask what they would like and either find out that the allocations conditions should be changed (e.g. to 0 hours), or not, or that they are thinking about work and actually do work 1000 hours or could reasonably thought to work 1000 hours. Some of it depends on the size and nature of the workforce. FWIW we almost use "everyone in their own group" and no hours requirement for cross tested plans (more accurately, general-tested plans). That way you can control exactly who gets what, down to 0 if desired.

Yeah that will work as long as you take care of it by the tax filing deadline (4/15) to avoid the 6% excise tax on the excess. I posted a walkthrough on the steps to take a corrective distribution of the excess here: https://www.newfront.com/blog/correcting-excess-hsa-contributions

Instead of looking to a secondary source, it might be simpler to read the Treasury’s rule. It includes a subsection on “Effect of failure”. 26 C.F.R. § 1.403(b)-3(d) https://www.ecfr.gov/current/title-26/part-1/section-1.403(b)-3#p-1.403(b)-3(d). About a failure, Treasury’s rule sends you to Internal Revenue Code sections 61, 72, 83, 402(b), and 403(c). A 403(b)-failed annuity contract still might be an annuity contract. While a contribution that gets no § 403(b) exclusion counts in income, a build-up under an annuity contract might not be taxed until paid, distributed, or made available. See 26 C.F.R. § 1.403(b)-3(d)(1)(i)-(iii). 26 C.F.R. § 1.403(b)-3(d)(1)(ii) describes which failures affect a whole plan, which affect a class of individuals, and which affect only a particular individual.

Correct. There's no requirement of which I'm aware. We have some plans, sponsored by a couple of related, but not controlled, entities and the name is a unique descriptor of the relationship. I've also worked with some that wanted to keep as much anonymity as possible and merely named the plan "401(k) Plan" without anything else. I've never had any pushback from any IRS or DOL person. The one thing I do try to encourage is brevity in the name choice. "and Trust" at the end burns me up.