Leaderboard

Attached is a very well written explanation of the start-up plan tax credits. It does not answer 100% of all questions, but does provide a good summary of points to consider in deciding in the credits are available. In Zoey's initial case, it is not likely that a credit can be claimed because the plan is not a new plan. There are two plausible scenarios about how the plan of the acquired company was handled and neither leads to the plan being a new plan. This was a stock transaction so the seller's plan survived and became an existing plan sponsored by the buyer (or a member of a controlled group of the buyer). If the EIN change was made to reflect the EIN of the buyer as the plan sponsor, that change would be reported on the 5500 or 5500SF on line 4 as a change in EIN. If the buyer set up a new plan and merged the seller's plan into the new plan, then the merger would be reported when the assets were transferred from the buyer's plan to the seller's new plan. This latter scenario is a more plausible argument for trying to take the credit, but given the facts is not likely to succeed. If the buyer's plan was kept separate and apart from the seller's plan, the buyer's plan could have a plausible argument to taking a credit for the buyer's plan. The strategy of creating new plans for each seller's plans going forward likely will become unavailable fairly quickly as the buyer's employee count grows. The tax credit is available to small businesses, not small plans. The tax credit starts phasing out between 50 and 100 employees. I suggest paying careful attention to the rules where the seller has made contributions to a SIMPLE or SEP IRA. It is easy to overlook these arrangements in planning for an acquisition. Changing topics from tax credits to auto enrollment/escalation, if the acquiring company established (or added) a new 401(k) feature on or after December 29, 2022, the plan needs to implement auto enrollment/escalation starting in 2025. There are rules in Notice 2024-02 about grandfathering plans of acquired companies that did not have a 401(k) feature prior to SECURE 2.0 enactment. This is an equally vexing topic to consider in doing mergers. tax_credits_under_secure-2.0-easy_reading_version_from_gps-2023-02.pdf

IRC 45E(c) defines who is an "eligible employer" for purposes of the credit: Paragraph (2) excludes employers which are a member of a controlled group if there was another plan in that controlled group covering "substantially the same employees." Presumably, if the plan being adopted for the newly-acquired company covered a separate group of employees, then the credit could still be allowed. I'll admit that my initial reaction was the same as Bill's - that you couldn't get the credit multiple times just by adopting multiple plans. However a closer reading of the statute seems that it might not be impossible after all. I wouldn't want to be the one making the call on this though. Pass this code section off to the accountant and let them interpret it. Or maybe they have a tax attorney consulting on all these acquisitions? They could hopefully offer an opinion. If they are doing multiple acquisitions, remember that they have to stay under 100 employees across the entire controlled group in order to be eligible for the credit at all.

Some suggest that a revision (whether a restated SPD, or a summary of material modifications) need explain only those plan provisions that are “material”. “Material” is awkward legalese for “it matters” (to inform some choice a participant, beneficiary, or alternate payee could make). If a plan is amended to discontinue contributions and get ready for a single-sum final distribution, some provisions included in an otherwise boilerplate plan amendment might never apply.

VAT - only the basis stays after-tax, the earnings are taxable. If they want it to grow and include the earnings as post-tax, it has to be converted to Roth. And yes, it also starts the Roth clocks.

In theory that would be allowed. But keep in mind that a) the carrier probably has minimum employer contribution requirements, b) if this is an ALE, they would be exposing the company to "B Penalty" liability because the offer would be unaffordable for most, and c) the Section 125 uniform election rule may present an issue from an NDT perspective (overview here: https://www.newfront.com/blog/designing-health-plans-with-different-strategies). Also note that you can have a substantive eligibility condition of up to one month (referred to as a "bona fide orientation period") before application of the 90-day waiting period. You just have to be careful to coordinate that with the employer mandate limited non-assessment period rules if it's an ALE. More discussion here: https://www.newfront.com/blog/aca-first-day-of-the-fourth-full-calendar-month-rule

Paul, that IS very well written. This was the first company purchased for this owner (so no controlled group yet), but he is looking to buy more soon. Very good point on the SIMPLE or SEP, and the auto-enroll! Thanks! And thanks for giving me more to think about... GAH!

I’m just spitballing here, but I’m going to say it’s a no for all your various scenarios. None of them are new plans.

I refer all to ERISA counsel when its ASG or complicated CGs. We don't always require a formal opinion if its fairly simple and a memo is enough.

I am not really sure what you are asking, but I think you are asking about the immediate annuity that needs to be offered because the plan is now paying a lump sum? The 417(e) lump sum needs to be the present value of the accrued benefit payable at NRD. It is not required to include any early retirement subsidies. However, the value of those subsidies needs to be disclosed in the relative value disclosures given to the participant with their election form. You must at least offer an immediate QPSA and QOSA, and any other options they are eligible for at the time of lump sum payment. If the plan does not contain any early retirement provisions for ages below ERD, you will need to add them. IOW, if the plan allows early retirement at 55/10, but the participant is 45, you need to know how to determine the immediate annuity at age 45. Typically, we would use the standard early retirement factors until Early Retirement Age (if otherwise eligible), then use the plan's actuarial equivalents (not 417(e) for ages below that, but that should be part of the window amendment. Then, for relative value disclosures you would compare the value of the immediate benefit using 417(e) factors to the value of the actual lump sum and disclose the difference to the participant. You have lots of options with this, but that is the way we typically do it. I believe you could also determine the lump sum based on the annuity at NRD, then divide it by the immediate QPSA factor using 417(e) rates and offer that as the immediate annuity, but you need to be careful about those who might otherwise be eligible for early retirement and your participant disclosures would need to explain that if they waited until they were eligible for an early retirement benefit that their monthly benefit might be significantly higher. We generally don't do it that way because of the inconsistencies, but if your plan doesn't have any early retirement provisions, that may be a simple solution. No matter what you do, you need to follow plan provisions.

Be careful here. Does the plan say the allocation period is per payroll, or is it funded each payroll as a cash flow consideration? FWIW I can't imagine setting up a PS plan with a fixed formula and no allocation conditions.

I don't believe a 204(h) notice is required for a profit sharing plan, EVEN if the PS plan has a fixed formula. Check ERISA 204(8)(B), Treasury regulation 54.4980F-1, and IRC 4980F(f)(2). But maybe I'm missing something. Certainly won't hurt anything if you give one - I just don't think it is necessary.

Well you can have in-service distributions with some restrictions (age, service, etc) as well as different requirements based on the source of money (deferrals, match, ps, etc). But the OP question was related to money the participant rolled into the plan from an IRA or another plan. We generally design the plans to allow those funds to be distributed whenever the participant desires.

As implied, there could be a 411(d)(6) violation in the proposed change. As @CuseFan points out, "It's the plan language that is important here..." so this plan sponsor would benefit from review by ERISA counsel. In addition, this sponsor could benefit from some experienced consulting advice about: the details of the benefit structure within the plan, what minimums and/or maximums could apply, defining the covered group(s), what non-discrimination testing is relevant, how to build in future flexibility, etc. I'm mostly retired, so that advice would not come from me, but I can offer some recommendations if needed.

This may help: Page 441 of General Explanation of Tax Legislation Enacted in the 117th Congress (December 2023) 17. Retroactive first year elective deferrals for sole proprietors (sec. 317 of the Act and sec. 401(b) of the Code) Present Law Present law provides a remedial amendment period during which, under certain circumstances, a retirement plan may be amended retroactively in order to comply with the tax qualification requirements.2030 Plan amendments to reflect changes in the law generally must be made by the time prescribed by law for filing the income tax return of the employer for the employer’s taxable year in which the change in law occurs (including extensions). The Secretary may extend the time by which plan amendments need to be made. Section 201 of the SECURE Act 2031 provides that if an employer adopts a qualified retirement plan after the close of a taxable year but before the time prescribed by law for filing the return of tax of the employer for the taxable year (including extensions thereof), the employer may elect to treat the plan as having been adopted as of the last day of the taxable year. That provision permits employers to establish and fund a qualified plan by the due date for filing the employer’s return for the preceding plan year. However, that provision does not override rules requiring certain plan provisions to be in effect during a plan year, such as the provision for elective deferrals under a qualified cash or deferral arrangement (generally referred to as a ‘‘section 401(k) plan’’). Under present law, if a section 401(k) plan is established by a sole proprietor after the end of the individual’s taxable year, then the plan can be funded with employer contributions as of the due date for the business’s return (including extensions), However, any election to make an elective deferral must be made by the end of the individual’s taxable year (i.e., generally by December 31 of the prior year). In contrast, an individual who contributes to an IRA is deemed to have made a contribution to the IRA for a taxable year if it is contributed after the taxable year has ended but is made ‘‘on account of’’ that year and before the due date for filing the IRA owner’s tax return for that year without extensions (generally, April 15). Explanation of Provision Under the provision, in the case of an individual who owns the entire interest in an unincorporated trade or business, and who is the only employee of such trade or business, any elective deferral 2034 under a section 401(k) plan to which the election under section 201 of the SECURE Act applies which is made by such individual is treated as having been made before the end of the plan’s first plan year if the election to make the elective deferral is made before the time for filing the return of such individual (determined without regard to any extensions) for the taxable year ending after or with the end of the plan’s first plan year. This extension of time would only apply to the first plan year the section 401(k) plan is established. Effective Date The provision is effective for plan years beginning after the date of enactment (December 29, 2022).

You're right I must have read it somewhere else. But I did find several other referenced that all seem to read something like this and the summaries seem to agree with both our recollection on timing. Section 317, Retroactive first year elective deferrals for sole proprietors. Under the SECURE Act, an employer may establish a new 401(k) plan after the end of the taxable year, but before the employer’s tax filing date and treat the plan as having been established on the last day of the taxable year. Such plans may be funded by employer contributions up to the employer’s tax filing date. Section 317 allows these plans, when they are sponsored by sole proprietors or single-member LLCs, to receive employee contributions up to the date of the employee’s tax return filing date for the initial year. Section 317 is effective for plan years beginning after the date of enactment of this Act.

You aren't confused, just sounds like they want to avoid taxes on the gains on the VAT account without rolling out the VAT account and steering to two IRAs - Roth and traditional.

If the plan says 8% annually w/o conditions then everyone gets 8% for 2024 and cannot change that until 2025. However, if the allocation period is not annual and the plan says each payroll period is 8%, then you may have a case for amending future payroll periods. It's the plan language that is important here, not their payroll/deposit/allocation practices. If you are able to amend, I think you need to provide ERISA 204(h) notices to those seeing the future reduction, which must be done 45 days (large plans) or 15 days (small plans) in advance.

Then everyone's earned the right to the 8% already simply by being employed. I don't know for sure how aggressive it's considered to say, okay you'll get 8% of your pay up through the date we make the change but then some other stated X% after that effective date through the end of the year.

Amend the plan to clear this up (if necessary or appropriate) and make sure participants have timely notice of the change and how it will be put into effect.

I think the 1/29 date is the date the payroll is being run. If accurate, that date doesn't matter. The ones that matter are 1/30 (termination date) and 1/31 (check date). If the plan terminates on 1/30 and no further contributions are allowed, then the 1/31 check date is outside that parameter and no deductions should be processed. Time to fix the dates. Might mean they need to move the payroll check date to 1/30.

Statutorily, the 417(e) factors exist to be a minimum lump sum amount. Many plans adopt them as the sole basis for lump sum determinations, but plans can use other actuarial equivalents if they wish. Therefore, lump sums can be greater than those determined using 417(e) factors, but not less, except in the case of maximum benefits under Section 415. Since you mentioned "window", if the plan has no stated actuarial equivalence for determining lump sums (because they never offered them), and they want to add a lump sum window, they do have some flexibility in choosing the Applicable Interest Rate within the 417(e) regulations. The existing actuarial equivalence factors do not need to be used to determine lump sums unless the plan specifically states they apply for that purpose.

I think I would have made the term date 1/31 to eliminate these Qs. Having said that, I think I would include the 1/31 pay. "The pay period is until 01/31/2024, the Plan sponsor will deduct the employee contribution on 01/29/2024 which will include the 01/31/2024 contribution," Do you mean "the pay period ends 1/29 but the pay date is 1/31"? Otherwise I can't make sense of that statement.

Lou S, I agree with everything else you said, but I don't think this is true. kcarter430, the communication says that you had a benefit in the plan. The way the system works is this - a plan "has to" (it isn't always done) report to the Social Security Administration if you leave a vested benefit behind after you terminate. There is a corresponding way to delete that notification if you are subsequently paid, but that isn't always done and I'm not sure the system works 100% when it is done, so receiving the notice is not definitive proof that you have a benefit in the plan. The idea is that SSA can provide this info when you go to claim SS as something that might be out there. As Paul I notes, you may have been paid a small amount in cash, or your account may have been rolled into an IRA that you know nothing about. There is a slim chance that they improperly forfeited (took away) the money. It's worth trying to follow up through the methods noted by Lou S and Paul I, and through the plan itself (to the extent you can follow that trail since it was terminated.)

Read the document. It will say if they can or can't. We (almost) always code plans to allow that.

It should be feasible to control this with the plan sponsor’s careful writing of the plan’s governing documents and the plan administrator’s careful writing of communications to participants. If the plan sponsor prefers that implied-assent elections in effect just before an amendment’s effectiveness remain in effect (despite the amendment providing no more implied-assent elections), it should be feasible for the documents and communications to specify that. An implied-assent regime presumes, if there is no opt-out, the communicated-to person’s assent to the provisions communicated to her. The rule for a cash-or-deferred election states: “For purposes of determining whether an election is a cash or deferred election, it is irrelevant whether the default that applies in the absence of an affirmative election is [that] the employee receives an amount in cash or some other taxable benefit[] or [that] the employer contributes an amount to a trust or provides an accrual or other benefit under a plan deferring the receipt of compensation[].” 26 C.F.R. § 1.401(k)-1(a)(3)(ii) https://www.ecfr.gov/current/title-26/part-1/section-1.401(k)-1#p-1.401(k)-1(a)(3)(ii). If the plan’s governing document is unclear about which election—implied-assent deferral or no-longer-implied-assent, and so “cash”—applies, the administrator might use whatever discretionary authority the plan’s governing document grants to the administrator for it to interpret (loyally and prudently) which election the plan provides. This is not accounting, tax, or legal advice to anyone.

JH, your description suggests there might not have been a change in the plan’s legally named administrator. (The word has different meanings following whether the usage is ordinary English, business English, or the Federal statutes’ specially defined term.) Rather, a change might be about a service provider. Even if there is no change in the plan’s administrator, follow the cautions about a possibility (many might say a likelihood) of change in the plan’s domestic-relations-order procedures. If you want a division processed (or a hold or freeze lifted), consider that a lawyer might navigate the plan’s provisions and procedures (perhaps practically including the service provider’s ways) more skillfully than you might. Nothing in this is accounting, tax, or legal advice to anyone.

You should not have to do anything new with a domestic relations order that has been submitted. The plan is required to process it. However, the new "processor" might derail what was on track for qualification and decide it is not qualified. Then you have to resubmit within whatever new legitimate administrative policies and limitations apply under the new processor. Or you can challenge. The decision might rest, unfairly, on the style and arrogance of the processor. We could talk about how a lot of the processors, like Fidelity, suck to the point that the plan may not comply with the law. And we could speculate about whether or not your DRO can be whipsawed by changes at this point. But the plan usually holds the better cards unless you have either lots of resources or a a very confident aggressive competent lawyer who is willing to work for an attorney's fee award. If you have submitted a DRO, just wait for the plan to make its move based on the determination of qualification that it is required to perform, and then decide what to do. You will have to be given a written explanation, which you can challenge, or you can choose to conform. Don't listen to informal buzz outside of the actual terms of the formal determination, the Summary Plan Description, and and written QDRO procedures. If you are somewhere else in the process, such as having informally submitted a draft DRO for "pre-qualification" (it pains me to use that phrase) then you might get jerked around more. The plan still has to follow the written QDRO procedures. You are entitled to them. Check them against what you are being told. By the way, the plan's written QDRO procedures probably also suck. Sorry. This is not an area where third-party providers (the big ones, anyway) are very enlightened. This is also an opportunity to gratuitously knock the Department of Labor. It just can't get QDRO stuff right. But at least its bias tends to be against the plan because it gets asked for help mostly from would-be alternate payees, and plans -- especially union plans -- can be obtuse), so for you it might be considered an ally. You probably don't have a fight yet, and chances are the DOL is not itching to get in one with you.

I'm confused. Has something changed with After-Tax -> ROTH conversions? My understanding is you can convert all or part of the After-Tax source to ROTH (without touching the Pre-Tax Source). But any distribution from the After-tax source including a ROTH conversion has to the prorated between after-tax basis and previously untaxed gains. The basis is tax-free, the gains are subject to taxation in the year of conversion but then become ROTH basis

I believe recent Notice 2024-2 clarifies that and is in agreement with your statement.

kcarter430, as you may have surmised from Lou S.'s comments, the information used by the SSA is collected and maintained by processes that are not very controlled. If you know or think you have a benefit due, the place to start is with your own records. Some facts or documents you should gather include: Termination date from the company with the plan in which you participated (to set your time frame). Any participant statement reporting to you your account balance or accrued benefits in that plan before or after your termination date. If the amounts are significant to you or you are just curious, then you may decide to keep going. Otherwise, there is a high probability that the cost to you in time and effort is not worth pursuing this further. Next: Review any bank statements you may have for a few years starting from your termination date and going forward, looking for deposits that you do not recognize. Review any tax returns you may have for a few years starting from your termination day and going forward, looking for amounts reported on a Form 1099R or on the pension income line on the tax return. If you find deposits or reported pension income, then very likely you were paid and can put the issue to rest. Moving forward, here are some avenues to pursue: Look up the final Form 5500 filing for your plan here https://www.efast.dol.gov/5500search/ You should be able to find the filing for 2010 or possibly 2011. If the plan was subject to a plan audit, the audit report will be included in the download. The audit report may reveal information about the plan termination including if the account balances were rolled into the acquiring company or sent to an IRA provider. Make contact with these organizations and explain what you have done that led you to them. (They may or may not make an attempt to help.) Contact the National Registry of Unclaimed Retirement Benefits at https://unclaimedretirementbenefits.com/ - they exist to help people find money and it's free. Contact the Pension Benefit Guaranty Corporation at https://www.pbgc.gov/wr/find-unclaimed-retirement-benefits - they will search their records of terminated plans that sent them unclaimed benefits. They also have tips for people finding unclaimed benefits. Contact the Administration for Community Living at https://acl.gov/programs/retirement-planning-support/pension-counseling-and-information-program - this is a government funded group with a mission "AoA’s Pension Counseling and Information Program promotes the financial security of older individuals and enhances their independence by empowering them to make wise decisions with respect to pensions and savings plans. The program assists older Americans in accessing information about their retirement benefits and helps them to negotiate with former employers or pension plans for due compensation." May you have good luck and good fortune!

You said it is W-2 comp which implies this is a corporation. I'm going to assume S-corp, since that's more common for small businesses. I'm also assuming you (and your client) are aware of the issues with reasonable compensation for S-corp shareholder employees. If there was no passthrough income from the corp to the shareholder in those years then it's probably not an issue. Just to clarify, what was his comp for 2023? You wrote $300,000 in the first paragraph but used $330,000 for your calculation. I'll assume that $330,000 is correct and that $300,000 was a typo. Under the circumstances, I would have no problem including the pre-2023 years of service for 415. However I would include them for 415 comp as well. The comp limit is the high 3-year average comp prorated for less than 10 years of service. So his comp limit at 12/31/2023 is (0 + 0 + 330,000) / 36 months = 9,167 * .5 = 4,583.

The onus will be on them to show they paid you but it may be difficult to track down the responsible party for a plan terminated in 2010. It's possible you were paid from the original plan and you forgot but they never removed you from the SSA rolls, or they did remove you but SSA didn't update. It's possible you were paid from the acquiring plan and the same thing happened. It's possible you were a lost participant at the time of termination and your benefit was sent to an IRA in your name when the Plan was terminated, if that's the case the Plan should have records as to where the funds were sent and you could take it up with that custodian. The above is all just speculation on my part and may or may not reflect what happened in your particular case. At this point you are looking for records that are at least 13 years old on a terminated retirement plan where all the assets have presumably long since been paid out. This is a great example of why you shouldn't leave funds at your prior companies retirement plan if you can help it or if you do, make sure you keep tabs on the balance in the Plan.

I think you answered your own question. The plan clearly says that the allocation will be reduced so as not to violate 415. I would recommend changing the formula to individual allocation groups for the next plan year.

Agree. All makes sense now.

If those contributions from the 12/29/23 payroll are attached to the 2024 plan year (i.e., available only for expenses incurred on or after 1/1/24), I think you could reasonably take the position that the contributions were not attributable to the 2023 plan year and therefore did not exceed the 2023 limit. Otherwise, the more conservative route would be to treat this as an excess contribution that's taxable in 2024 when refunded. IRS Notice 2012-40: https://www.irs.gov/pub/irs-drop/n-12-40.pdf If a cafeteria plan timely complies with the written plan requirement limiting health FSA salary reduction contributions as set forth in section IV, below, but one or more employees are erroneously allowed to elect a salary reduction of more than $2,500 (as indexed for inflation) for a plan year, the cafeteria plan will continue to be a § 125 cafeteria plan for that plan year if (1) the terms of the plan apply uniformly to all participants (consistent with Prop. Treas. Reg. § 1.125-1(c)(1)); (2) the error results from a reasonable mistake by the employer (or the employer’s agent) and is not due to willful neglect by the employer (or the employer’s agent); and (3) salary reduction contributions in excess of $2,500 (as indexed for inflation) are paid to the employee and reported as wages for income tax withholding and employment tax purposes on the employee’s Form W-2, Wage and Tax Statement (or Form W-2c, Corrected Wage and Tax Statement) for the employee’s taxable year in which, or with which, ends the cafeteria plan year in which the correction is made.

Effen and Peter, as you see, provide excellent input and your subsequent attainment of the facts now give sense to the situation. The plan could certainly have allowed a life annuity with period certain for the AP and allow the AP to name a beneficiary for any remaining guaranteed payments after his death. The plan could not have provided for a survivor life annuity to AP's beneficiary (i.e., APs cannot elect a J&S with a new spouse or other beneficiary).

Dianna912, if other efforts (including some Effen suggests) don’t result in clarifying the participant’s benefit to her satisfaction, and you seek to help your friend evaluate her potential courses of action: Consider whether the circumstances you describe suggest enough potential for clarifying (and so improving) the participant’s benefit that it could be worthwhile to pay for at least an initial consultation with a knowledgeable employee-benefits lawyer. If the pension plan is ERISA-governed: One possible interpretation of ERISA § 206(d)(3) is that a qualified domestic relations order—to the extent (if any) that an order may provide for a successor-in-interest to an original alternate payee—may so provide only if the order restricts such an alternate payee to a spouse, former spouse, child, or other dependent of the participant. (I’m imagining that the deceased’s nephew is not the participant’s dependent.) See, for example, In re Marriage of Janet D. & Gene T. Shelstead, 66 Cal. App. 4th 893, 78 Cal. Rptr. 2d 365, 22 Empl. Benefits Cas. (BL) 1906 (Cal. Ct. App. Sept. 15, 1998) (interpreting ERISA § 206(d)(3), and applying ERISA § 206(d)(3)(K)). But recognize that this decision is no precedent. One might use it in an effort to persuade a decision-maker—whether the pension plan’s administrator or a reviewing court—that an order is not a QDRO. A further possible interpretation of ERISA § 206(d)(3) is that a qualified domestic relations order cannot designate an alternate payee’s successor-in-interest if, under the pension plan’s provisions, a participant cannot designate the participant’s successor-in-interest. That also might be so if there is no remaining interest to dispose of after the relevant person’s death. Recognize that the pension plan’s provisions might matter greatly. Consider that the participant might use the pension plan’s DRO and claims procedures to question the administrator’s interpretation, and to request the participant’s interpretation. (Some courts might say one must exhaust the plan’s procedures before asking a court to declare that a domestic-relations court’s order is not a QDRO.) Using the plan’s internal procedures might be less burdensome than litigation in a Federal court. None of this is legal advice to anyone.

A few things: 1) Doesn't really matter what the divorce decree says, it matters what the QDRO says. 2) Both participant and AP would have signed the QDRO to accept it (or at least their attorney did). Doesn't mean they understood it, but they should have. 3) Often, but not always, the APs share is based on the # years married / total years working * final benefit. Sometimes it is 50% of the benefit at the time of divorce. Depends on the wording in the QDRO. 4) She has a right to see a copy of their QDRO procedures. 5) The QDRO should have a specific section that address what happens if one of the parties die before benefits commencement. If it was a true "separate interest" QDRO, the APs share would just be forfeit if they died before commencement. If it was a pure "shared interest", the benefit reverts to the participant. Many are a blend of the two where they are shared until commencement, then they become separate. In those cases, if the AP dies before commencement, the benefit typically reverts to the participant. 6) Seems like the only way the AP's portion could be paid to someone other than the participant would be if it was a separate interest QDRO (since they are treated as 2 separate plan participants) and the plan had a death benefit for non-married participants. So, maybe a lump sum or a period certain annuity? Not logical that it would be a life annuity. 7) Easiest/cheapest thing is to read the QDRO. If she doesn't have it, request a copy from the Plan Administrator. She probably only needs to hire a lawyer if the PA isn't following the QDRO.