Leaderboard

You can't cross test but you can do an Average Benefits Test still. You can also do a General Test based upon allocation rates you just can't convert to benefits. In all seriousness if you are having 409p issues and having to invoke the parts of the plan document that call for adjustments the issues are serious enough the client ought to be willing to pay to have an ERISA attorney who is very knowable of ESOPs involved. I work for a firm that specializes in ESOPs and we are full of people, myself included, who have worked on ESOPs for decades. We would be recommending to the client to get the attorney in the loop.

What does the plan document say? In our document, the definition of "Annual Addition" includes the following:

Peter, Empower has self certification procedures that state ... For Self-certified hardships, the participant must agree to retain all documentation substantiating the hardship. In the event a participant requests three or more hardships within a plan year, the participant must provide additional information about the third (and all subsequent) hardship requests as described in these Procedures.

I think this falls under the "unless the employer has knowledge to the contrary" part of the statute. We've discussed this internally (we are a recordkeeper) and have decided not to offer self-certification to our clients who use our "outsourced" services for hardship processing. When an "apparent" abuse exists, does that constitute "knowledge" that this isn't a real hardship? This is what we need the regulators to provide guidance on.

Sounds like all you have is a draft DRO, not a QDRO.

This is to share with you the happy news that today is the 25th anniversary of the first day on which the BenefitsLink Newsletter began daily publication. I didn't see this coming when I decided to go daily in 1999, at age 41. (The newletters had begun four years earlier, but they weren't being published every day.) The free information must be helping employee benefits practitioners to help their clients, which translates to the ability of employers to effectively run and fund programs that improve the lives of so many millions of working people (and retirees, and beneficiaries), even if most of them wouldn't know (or want to know) the difference between an ERISA and an eraser. What a noble endeavor, to be an employee benefits practitioner! Some lawyers and TPAs and other benefits practitioners have found work through our job board that's been running since 1996, which means they've gone to new workplaces and sometimes new cities, which means some of them have met people they wouldn't have met otherwise, which means some of them have fallen in love and then had children... which means there are people walking around on the planet now who wouldn't be here but for this "web site" thingie that started in 1995, and then the idea of sending "newsletters" by "email." None of that would have been possible without readers. The existence of "BenefitsLink babies" didn't occur to me until one day about 10 years ago, but I kept it quiet -- at that time, they were still teenagers! True to form, I and my business partner and wife Lois Baker (formerly an employee benefits lawyer, whom I met on CompuServe in 1990 while trading ERISA questions using dial-up modems) have failed to do any marketing of this happy day. But as I sat here at the keyboard today I had the idea that we would get so much joy by celebrating the occasion with readers. I hope this hasn't come across as a commercial but instead is the lifting of an E-flute of cyber-champagne -- here's to employee benefits practitioners everywhere! It's a wonderful community, and for 25 years now and still counting, we are so happy to be a part of it.

Thanks Peter - the employer is questioning the validity of the request and asking if they can deny it. I did not ask any further details. Also, partly what prompted the question is we received an email from Empower the other day.... it states, that a participant may self certify up to 2 hardships per year. If the participant requests 3 or more, administrative review and approval is required. Plans have the option to limit the number of hardships a participant may take in a plan year to 2.

What does the Plan Document say about distributions to non-spouse beneficiaries and their options?