Leaderboard

I'll rob from Paul here to pay Peter. Paul makes an important point in emphasizing negative consent, which from a plan participant's perspective looks very different from Peter's perspective of advising a plan sponsor. In evaluating a course of action for my own clients, I always put on opposing counsel's hat to determine what their responsive legal argument might be before I make my own argument. For example, if a plan participant is going sue a plan and its fiduciaries, that participant's counsel will home in on actions taken that are arguably not in the best interests of participants, which could be shown by introducing the kinds of evidence you list in your third post, Peter. In particular, negative consent-basis actions would appear to a litigant to be a ripe target for close scrutiny, especially if an end result has demonstrably detrimental effect on participants. So yes, from a legal perspective, I would think a prudent plan fiduciary has a responsibility to consider those possible outcomes before instituting a practice that has many known unknowns and the result of which have the potential for damaging participants. If a plan participant sues, be prepared in discovery to show plan fiduciaries considered potential outcomes. Even with lots of plan policy communications to participants, jurists will consider whether the average plan participant is likely to understand them.

The terms “separate interest” and “shared interest” are artificial and derived. They are not used in any of the relevant statutes or regulations. I believe that their use in an order (or in written QDRO procedures) can create difficulties in interpretation. For people who know what they are talking about, the terms can be nice shortcuts in informal discussion, but they are terrible for defining an interest in a defined benefit. Nothing on the face of the decision appears to be wrong. The only way to quarrel would be to see the actual language in the QDRO that describes the alternate payee’s interest. I doubt that the ABC got it wrong.

The real question is, who do we bill it to??

Another we possibility might be to disclaim the check. We’ve already spent $95 worth of time discussing it!

I talked to Schwab and was told I could deposit the check online to my IRA or personal brokerage account. I did and it took. I put it in my IRA, so no lunch for a few more years.

Audit lottery. Put the check in the personal account. If you get a 1099-R you treat it the way that reflects. If you don't get a 1099-R don't report anything. If the IRS comes along and hits you up how much can the tax and penalty be? This is the perfect case for playing the audit lottery.

The employer might fear enforcement from workers and organized labor even more than enforcement by the US Labor department’s Employee Benefits Security Administration. The employer might want its bankruptcy lawyer’s advice about which debts are nondischargeable. Each of the employer’s owners and executives might want one’s lawyer’s advice about the extent to which the individual might be personally liable regarding the employer’s debts. This is not advice to anyone.