Thank you all for the information and advice that you have shared in these boards. I have learned so much but still have several questions in regards to a situation that has arisen so many years after my divorce. I live in the Pacific NW.

My divorce was final in 1990. A QDRO was entered pursuant to my decree, and all of the orders in the decree regarding property division, 401k payment, child support, etc. were fulfilled, except for the provision regarding my pension benefits. My ex-wife was named as the AP in the QDRO, designated as surviving spouse with rights to my pension account, entitled to a payment of $400. plus per month.

In 1991, the QDRO was presented to my pension plan administrator, and failed. My ex-wife, her attorney, and I received a letter from the plan administrator that explained the reason why the order was not acceptable, with specific instructions on how the QDRO must be reworded in order to be accepted by the plan. No further action was made my my ex-wife or her attorney. In 1998, I again received court papers that notified me of another attempt to secure my ex-wife's right to her portion of my pension plan. A new order was entered, and the QDRO was presented for the second time to my pension plan administrator. Again, we all received a letter from the plan administrator as to why the QDRO failed. Turns out that the my ex-wife's attorney simply re-sent the original QDRO to the plan administrator without heeding or amending a single word of the instructions that the plan administrator gave her the first time the QDRO was rejected. Compliant me, worried that it was somehow my responsibility, worried about an expensive court battle, or possible judgments, I contacted the plan administrator, asking why this matter had not yet been resolved in seven plus years, and I sent my ex-wife and her attorney a detailed written explanation of how they should proceed in order to obtain her survivor's rights to my pension plan. Again, no word, no other action taken. Flash forward, 12 years later. Upon the heels of my ex-wife's divorce from her third husband; a short-term marriage, where she received nothing in terms of alimony or property division, I recently received a draft of legal paperwork from my ex-wife's attorney in yet another attempt to secure her rights to my pension. The difference, at this point, is that I have been remarried for 12 years, and I retired two years ago, fully vested in my pension plan, with my wife designated as my surviving spouse. Along with the "not yet filed legal documents and motions," was a demand letter informing me that we needed to get this QDRO business done, and that I "owed" my ex-wife an immediate payment of $10,000 plus for the retirement pension that I had deprived her of since my retirement. Given the information that I have found on this message board, I am now adverse to comply with their demands. I am also looking for advice on finding the best legal representation for this complex issue. Thank you so much.

We have been tentatively been retained to file delinquent 5500s for a company that went bankrupt and ceased operations in 2005. The last 5500 filed was filed for 2004. Three plans are involved, with over 120 participants. To make this a really good story, profit sharing plan assets were invested primarily in company stock. Just before the bankruptcy filing, the two trustees were terminated and paid out their account balances with assets other than company stock since the stock was despressed. You can guess the rest.

The trustee in bankruptcy has filed an action against the two former trustees to recover the distributions for the plan participants. We have been retained to file the delinquest 5500s. There plan/bankruptcy estate has sufficient assets to pay us, but not the $12,000 in DFVCP fees and the audit fees. Has anyone had any experience negotiating with the DOL regarding these fees and/or waiving the audit requirement? Perhaps the filing fees could be delayed until a settlement is reached with the former trustees, which looks likely. If we cannot resolve this, we'll probably walk away, to no one's benefit. Thanks.

We give a discount to participants who smoke but sign up for our stop smoking campaign. Any thoughts on whether a COBRA person also has to be allowed to sign up for the stop smoking campaign so they can get the discount? Thanks!

For the $200 withholding threshold, does that include all distributions in a year? Or just those eligible for rollover?

For example, a participant's RMD for 2010 is $150. If that person took a $150 RMD in May, and later took a $150 in-service distribution (now eligible for rollover), am I over the $200 mark?

If someone's RMD is $500 and the person takes $750 from the plan paid in a lump sum, would there be one 1099-R done, or two? Assume the taxes are done correctly--participant election on RMD and 20% on amount over that.

I was hoping someone could send me in the right direction. I am charged with reviewing the health and welfare plans which include Section 125 plan components. I was hoping someone could send me a link with the required an optional amendments on or after plan years beginning 1/2010 and maybe some sample language for these amendments. Thank you!

An attorney prepared a QDRO and reported that the lump sum to be paid to the Alternate Payee was $300,000. It was intended to be based on 50% of the present value of the benefit accrued during marriage.

My understanding is that whatever the QDRO says is the amount to be provided to the Alt Payee and as the actuary for the plan I would compute an offset to the participant's benefit on a go forward basis for plan admin.

My question pertains to the accuracy of the benefit payable to the alt payee. That is, although I am not performing an actuarial valuation do I still need to review the accuracy or reasonability of the amount (especially to ensure that it does not exceed the total value of the benefit)? The accuracy or consistency between the intent to be paid and the value actually paid seems important to protect the participant and alt payee and to properly admin the plan.

So in conclusion, do I accept amount as correct, review for reasonability or review for accuracy?

Thanks

A small 501©(3) with only a couple of participants in the plan has asked us to help them get a written plan document in place (yes, we know it's late). The assets are invested in mutual funds at a couple of well known, big investment firms. When it comes to naming them as custodians under the plan and getting them to sign, they say they are not a custodian or trustee. They just hold the assets. Must the plan have a custodian or trustee?

How common is it for governments to submit their plans for a favorable letter? Do they generally choose not to submit?

Let's say Susie Tech works for Joe TPA. Joe TPA does not have Susie Tech get a PTIN, and Susie Tech continues to prepare 5500's.

Assuming she should have obtained a PTIN, who is in trouble? Joe TPA, Susie Tech or both?

Plan is pooled and has yearly valuations on 9/30/10. Distribution timing states 'as soon as administratively feasible following the time specified below', which then has 'immediately following severance' checked.

If a participant term'd on 11/1/10, submitted paperwork, I think that the distribution should be processed (based on prior 9/30/10 val) and if any other, EE, ER contributions come in for the current plan year pay them a second distribution (if needed) upon completion of the next valuation on 9/30/11. Normally I think this type of plan set up should have 'next valuation' for distribution timing but not the case here.

Even though it is a yearly valuation, I don't think it would be 'administratively feasible' to make a participant wait until the next valuation, almost a year with the immediately following severance option selected.

Just wondering how others approach this one.

Thanks all!

Plan with two participants, husband and wife. Had prior participants but have all been paid out. Assets in Plan about 1,100,000.

Plan loans $200,000 to husband for 6 weeks (until construction loan approved on vacation home in Mexico), is repaid with fmv interest.

Other than the excise tax for the prohibited transaction, any other repercussions to be concerned with? I do not think the loan proceeds are considered a distribution that makes it taxable. Is this a qualification issue?

Client wants to give a QNEC to satisfy ADP testing.

One of the employees eligible for the QNEC termed 1/08/2010.

The QNEC would cost $50 to this termed employee.

The client also does New Comp. PS at the end of the year.

if the termed EE receives the QNEC, she would then be required to receive the minimum gateway.

The minimum gateway is $46.94, less than the $50 QNEC.

QUESTION: Since the QNEC cannot be applied toward the gateway, that would mean this participant would need to receive BOTH the $50 QNEC and a minimum gateway of $46.94.

Correct?

The sustainability of Social Security is at issue so it makes perfect sense to reduce the employee's tax rate from 6.2% to 4.2% for 2011. Hey, and the SS deficit: Just for a thrill, add another "tril!"

Owner arbitrarily takes money from the plan; he thinks of it as a loan. The plan doesn't permit loans, which sort of doesn't matter because there was no effort to comply with what would have been in place anyway.

So...is it "just" a Prohibited Transaction, subject to penalties and interest and all that? All things considered, that's a relatively painless fix. That's how we see it.

Would there be further consequences or concern if there was a pattern?

I have a takeover plan (effective date of 1/1/2009) adopted 12/29/2009 with a Special effective date of 1/1/2010 for the salary deferral component. The employees were not offered the opportunity to defer until April. Is this considered a missed deferral opportunity?

I think I know the answer, but wondering what others do in this case.

I have a Corbel VS document with immediate vesting. The definition of "forfeiture" says: "Under this Plan, Participant accounts are 100% vested at all times."

So, for 2010, the only eligible employee is the owner. He has one employee who has worked part time since 2007, with 2010 being the first year in which he will work 1,000 hours, meaning he will meet the 1 YOS requirement and will enter on 1/1/2011.

If I amend the document now (before 1/1/2011) to go to a 6 year graded schedule, what impact does this have on his vesting. He does not have 3 years of vested service, so he does not have the option of using the old schedule.

The document, however, has language that says notwithstanding the new vesting schedule in the new document, "the Vesting percentage of a Participant's Account shall not be less than the Vested percentage attained as of the later of the effective date or the adoption date of this amendment and restatement".

Well, the employee doesn't have an account in 2010. If he did, it would be 100% vested, but since he doesn't, do we say he is "theoretically" 100% vested as of 12/31/10, so the amendment can not bring him back to being only 20% vested next year once he picks up his second year with 1,000 hours???

Any thoughts would be much appreciated.

Thanks.

James

Friendly discussion in the office:

Owner takes a participant loan from the plan, under the plan's participant loan provisions. The loan proceeds get deposited directly to his personal chekcing account. The loan, so far, clearly qualifies for all of the PT exemtpion requirements.

The question is, does a participant loan that is otherwise ok, become a PT merely because after the money is in their PERSONAL account, they loan money or invest money into their business for cash flow purposes.

My opinion is that there is no PT, but my esteemed colleague disagrees...

Hello everyone

I plan on taking a distribution from my Roth this year. The distribution will be less than my total contributions and my account was opened in 2005. Am I correct that there will be no income tax accessed and no penalty? There were no rollovers or conversions. The money in the account was just from my contributions of cash from 2005 to the present. Also, how do I prove to the IRS that my distribution was less than the total contributions put into the account?

Thanks as always!

I have a plan that failed ADP (passed ACP) - ADP correction method is to refund to HCE since participant is not catch up eligible. There is related match that needs to be refunded. The participant is 100% vested. Do I refund or forfeit related match? I've been reading some old posts on this and everything talks about running ACP first to correct and then you may not need to forfeit but might be able to distribute since participant is 100% vested. But I pass ACP, so how is running that first going to help me? I thought I needed to forfeit his match but am just further confusing myself now. I use Relius and there is no nice way to do forfeitures of related match so I wanted to make sure I was doing this right - I thought Relius would have a way to do this as it is not an uncommon thing, but apparently not.

thanks!