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I’m hoping for some guidance. If Divorce Decree states 3/22nds of military retirement for ex spouse and 29/22nds for military retiree, I assume the denominator of these two fractionis is 32, not 22. no dollar amount and no QDRO. Military retirement benefits not enforced by a QDRO. They are enforced by a Military Retired Pay Division Order ("MRPDO") that used to be called a Constituted Pension Order ("CPO"). If no such Order was entered, DFAS will not make any payments to your ex-. You are making such payments voluntarily and that's fine since the source of the obligation is the Divorce Decree. The MRPDO is just an enforcement tool and if such an Order has been entered DFAS would have automatically added COLAs. Should ex spouse receive COLAs too? In most states COLAs are considered to be marital property. But beyond that, if she is to receive 3/32nds of your Retired Pay and your Retired Pay increases because you have received a COLA, then the amount she will recieve will increase proportionally. DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 1, Section 2.7 provides: "Both retired pay and survivor annuities are adjusted annually by the change in the Consumer Price Index." Figure 29-1, the Military Retired Pay Division Order states: "Please note that all awards expressed as a percentage of disposable retired pay, including hypothetical awards, will automatically include a proportionate share of the member's COLA regardless of any language in a court order to the contrary." The fraction 3/32nds is 9.375%. So this language applies to you. You can find historical COLAs in the attached DoD regulations. Example: divorced 15 years and had been paying out, same amount of retirement pension, (at beginning of divorce) until now. Should I have been adding the COLAs I have received to ex spouses monthly payment too? DoD FMR Volume07b- 01-31-24.pdf

In Maryland it is not required that the parties sign or approve a QDRO. It is customary, but only as a courtesy. If a party refuses to initial each page and sign the QDRO we submit the QDRO with the word "Declined" written everywhere where the uncooperative party's initial or signature should be, and we file a Motion for Entry of Retirement Benefit Order. See attached. The Motion, attached, cites Maryland law classifying a QDRO as an tool for enforcing another Court Order, the Judgment of Absolute Divorce, very much like a wage garnishment or an attachement or property, neither of which require advance approval by the debtor, and it also points out the Department of Labor pamphlet at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/qdros.pdf where Question 1.2, 6th paragraph on page 5, says, "There is no requirement that both parties to a marital proceeding sign or otherwise endorse or approve an order." See also https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/qdro-overview.pdf I have literally never seen the Court refuse to enter a QDRO under these circumstances. If necessary, I have been available to testify as an expert witness at the time of the hearing on the Motion. DSG Motion for Entry of QDRO 05-16-2021 (2).docx

Completely but definitely worth a shot to file all of them under DFVC even the one for which you did get the notice. I assume that the DOL notice received did not include any penalties anyway. I think the only scenario where rejection, etc. would be relevant would be an attempt to get them to waive any penalties assessed.

I would also quickly file under DFVCP. I agree that the goal is for people to comply, not to punish as many people as possible., Personally, I think it is allowed unless they have contacted you for that plan year since each return is limited to a specific plan year.

IRS just published a fact sheet about Qualified Disaster Recovery Distributions: https://www.irs.gov/newsroom/disaster-relief-frequent-asked-questions-retirement-plans-and-iras-under-the-secure-20-act-of-2022 (Thanks to the BenefitsLink bulletin for the timely notification!) Under Q9, "May an individual repay a qualified disaster recovery distribution?," the guidance given states I realize this guidance is in relation to QDRDs and not QBADs, but the statute under 72(t)(I)(vi) says that rules for repayments of QDRDs shall be "similar to" those for QBADs. So it seems reasonable that the same guidance would apply.

The attached article published in January 2023 notes that IRS Code section 6511 "prevents a refund from being provided after the limitations period, which is generally 3 years. Thus, there is not a mechanism that allows someone who took a QBAD to recontribute the distribution more than 3 years later and amend their return to receive a refund for taxes paid in the year of the withdrawal." A copy of the full article is attached and the QBAD comment appears on page 2. (It has a couple of other interesting, unrelated nuggets.) Keating Muething & Klekamp PLL WHAT EMPLOYERS NEED TO KNOW ABOUT SECURE 2.0.pdf

Wouldn't you just file a 1040-X, reduce your AGI, and explain the change in Part II (or III if electronic filing)? I've never done this, so I'm not certain, but it seems logical to me. I'm a little grumpy about IRS tax filings about now...

LMR, it sounds as if you're paying support in the form of an allotment. It is important to know whether your obligation is for property or for support. If your divorce decree only ordered you to share retirement benefits as property, then you should have pursued an MRPDO (military retired pay division order, which is the military version of a QDRO). This is because when paying a former spouse directly from retired pay by allotment, you are paying monies on which you've already paid tax, but with paying through an MRPDO, the DFAS will pay a former spouse directly, and the former spouse will have the tax liability rather than you. Examine your divorce decree to see whether the money you were ordered to pay was characterized as support or as property. If property, then you need an MRPDO, but if support then your allotment is proper. When the DFAS pays a portion of retired pay as property and the order is for a percentage, it will automatically include COLAs, but if the order is for a dollar amount, then DFAS will not add COLAs. If your decree is silent on the property vs support characterization (rare) but indicates COLAs should apply, then a reasonable interpretation is for property division rather than support.

I may be oversimplifying this but didn't SECURE ease the (a)(26) requirements for a frozen (either hard or soft) plan? My understanding is that the minimum participation requirements are deemed satisfied if: (1) the plan was amended to either cease all benefit accruals or close the class for benefit accruals, (2) the plan satisfied (a)(26) at the time of the freeze, and (3) there was not a substantial increase in coverage or benefits for the 5-year period preceding the freeze. If that's the case, then why do you need to provide any accrual for any new participants? If I have this wrong, please correct me. Thanks.

The last sentence of the original post implies that @LMR is paying some fraction of his retirement benefit directly to his ex-spouse. Is that accurate? If so, it is NOT what a QDRO (or other-named court order) is intended to do. But the post also says, "no QDRO", so perhaps the divorce decree and/or property settlement does expect such direct payment. If so, the comment above from @Effen makes sense: it is logical to assume the court meant COLAs to be included (ie, that's exactly why the court included a fraction rather than a dollar amount).

I don't know if there is anything special about the military's QDROs, but generally a QDRO would contain language related to future COLA's. In my experience, COLA's are typically provided to the AP, but not always.

I'd suggest consulting with a personal tax adviser on this one because the issues spans back multiple years and therefore there are potential excise taxes spanning multiple years. In general-- The spouse's general purpose health FSA was unfortunately disqualifying coverage for both the spouse and you. I've copied the relevant cite below for reference. Here's an overview: https://www.newfront.com/blog/hsa-interaction-health-fsa-2 For 2024 contributions, you will need to have the HSA custodian process a corrective distribution. That will avoid a 6% excise tax that would otherwise apply for the excess contributions. For 2023 contributions, you may be able to take advantage of a special rule outlined in the IRS Form 8889 Instructions providing individuals the opportunity to take a corrective distribution up to six months after the due date of the return, including extensions. Under that special rule, you can work with your personal tax advisor to file an amended return with the statement “Filed pursuant to section 301.9100-2” entered at the top. For contributions prior to 2023, you will still need a corrective distribution, but a 6% excise tax will apply on those ineligible contributions. The 6% excise tax reported on IRS Form 5329. Here's an overview: https://www.newfront.com/blog/correcting-excess-hsa-contributions IRS Notice 2005-86: https://www.irs.gov/pub/irs-drop/n-05-86.pdf Interaction Between HSAs and Health FSAs Section 223(a) allows a deduction for contributions to an HSA for an “eligible individual” for any month during the taxable year. An “eligible individual” is defined in § 223(c)(1)(A) and means, in general, with respect to any month, any individual who is covered under an HDHP on the first day of such month and is not, while covered under an HDHP, “covered under any health plan which is not a high-deductible health plan, and which provides coverage for any benefit which is covered under the high-deductible health plan.” In addition to coverage under an HDHP, § 223(c)(1)(B) provides that an eligible individual may have disregarded coverage, including “permitted insurance” and “permitted coverage.” Section 223(c)(2)(C) also provides a safe harbor for the absence of a preventive care deductible. See Notice 2004-23, 2004-1 C.B. 725. Therefore, under § 223, an individual who is eligible to contribute to an HSA must be covered by a health plan that is an HDHP, and may also have permitted insurance, permitted coverage and preventive care, but no other coverage. A health FSA that reimburses all qualified § 213(d) medical expenses without other restrictions is a health plan that constitutes other coverage. Consequently, an individual who is covered by a health FSA that pays or reimburses all qualified medical expenses is not an eligible individual for purposes of making contributions to an HSA. This result is the same even if the individual is covered by a health FSA sponsored by a spouse’s employer. Slide summary: 2024 Newfront Go All the Way with HSA Guide

I read it as having to be an actual dollar amount-- IRS Notice 2002-45: https://www.irs.gov/pub/irs-drop/n-02-45.pdf An HRA is an arrangement that: (1) is paid for solely by the employer and not provided pursuant to salary reduction election or otherwise under a § 125 cafeteria plan; (2) reimburses the employee for medical care expenses (as defined by § 213(d) of the Internal Revenue Code) incurred by the employee and the employee’s spouse and dependents (as defined in § 152); and (3) provides reimbursements up to a maximum dollar amount for a coverage period and any unused portion of the maximum dollar amount at the end of a coverage period is carried forward to increase the maximum reimbursement amount in subsequent coverage periods.

It has been happening a lot and that is the exact approach we have been taking - just throw all the entities into the Plan, check the CG box and change the adopting ER/main entity to be the most recent one. It requires participation/joinder agreement for other/old entities.

Do you use a pre-approved plan doc? Can you ask that provider? I think most have some kind of amendment system to generate a short amendment to change the Plan Sponsor. Is the EIN changing? If yes, there is a place to report the sponsorship change on the 5500. It might also be easier to just amend the Plan to have the FL LLC as an adopting employer (that seem a clear CG), then end the participation of the NY LLC when it dissolves and have the FL LLC take over as lead adopter.

Well if it were me, I would quickly file under DFVC and tell them so. My view of the matter is that they want people to comply and file the 5500's. They are not out to punish those who cooperate. No promises but I can't see how it hurts. I think technically it may not be allowed because one of the conditions is that th DOL has not reached out to you, but I just don't think they would reject the DFVC on that account.

Yeah I think it's borderline and could reasonably be interpreted as a change in residence each time depending on the specific facts and circumstances. Here's my thoughts I've posted on this issue: https://www.newfront.com/blog/spouse-relocates-outside-u-s-moves-u-s-2 Spouse Moves Into Country In this example, the employee’s spouse is moving into the country from an area where the plan does not provide full coverage. The employee’s spouse therefore will have a change in residence affecting eligibility for the plan. This means that the employee may change his or her election to cover the spouse upon the spouse’s change in residence to the U.S. Spouse Moves Out of Country In this example, the employee’s spouse is moving out of the country to an area where the plan does not provide full coverage. The employee’s spouse therefore will have a change in residence affecting eligibility for the plan. This means that the employee may change his or her election to revoke coverage for the spouse upon the spouse’s change in residence outside the U.S. What is a Change in Residence? There’s no formal definition or exact timeframe to determine “residence” that applies here. The analysis is based on all facts and circumstances. In other words, if the spouse is going somewhere on vacation, there’s no permitted election change event. If the spouse is changing residence for some period to the foreign country, then relocating to reside back in the U.S., there will be permitted election change event upon each event. This isn’t very precise, but it’s also generally not an issue in practice. The employee will certify to the change in residence in most cases, and there is no reason for the employer to question that certification unless the employer suspects fraud. Fraud would likely only be an issue if the employer had reason to believe that the dropping/re-enrolling request was really a based on the spouse’s short vacation.