If the ex-spouse awarded benefits per a QDRO begins payment before the employee quits and becomes entitled to an early retirement subsidy, the ex-spouse gets no part of the subsidy later earned by the employee. The question is how much does the employee get by way of the early retirement subsidy?

Suppose A is the employee, A is age 50 as of the date of divorce when he had accrued benefits of $2,000/month at age 65. The QDRO awarded 1/2 of that to B, the ex-spouse. When A reaches age 55 and could then quit and qualify for early retirement, A continues working. When A turns age 55, B chooses to being taking her awarded $1,000/month at EE's age 65. The actuarial equivalent for taking 10 years early nets B a $620/month payout.

A year later, A takes early retirement and earns a 25% subsidy. From the time of divorce to retirement, A had accrued another $600/month at age 65. With the $1,000/month at age 65 that accrued to time of divorce and A was allowed to keep, A's total benefit when he quits (age 56) is $1,600/month at age 65. Obviously, the 25% subsidy applies to the $1,600/month at age 65, and A is entitled to that $400 early subsidy.

The question is whether A should also get additional early subsidy of $250/month (25% of the $1,000/per month at age 65 awarded to B)? This $250 is part of A's total benefits, and it was not awarded to B by the QDRO because B began withdrawal of her awarded benefits before A became entitled to the early retirement subsidy.

Should A's benefits be the total, less just what was awarded to B by the QDRO? Or does the plan save that $250/month subsidy, as a windfall to the plan, not having to pay it to A since that $250/month relates to benefits that have been awarded to someone other than A?

How definite must a deferral election be? Partners have until 12/31 each year to make a deferral election w/respect to self-earned income, the amount of which won't be final in amount until after the end of the year; as ADP testing will be performed by the time the contribution must be funded (i.e., deadline for 1040) is there any reason the partner's annual deferral election can't be defined as "the maximum dollar amount permitted for an HCE under final ADP testing"?

What about a deferral election stated as a flat dollar amount equal to the annual 402(g) limit, or, "if lesser, the maximum permitted under ADP testing"?

Or is this just too "cute" an end-run around maintaining a safe-harbor plan?

I am looking for an extensive list of issues when a public sector utility, airport authority, or insurance authority goes private. For example, as private sector employees, what happens with those who are vested in their public sector pension system, but are not yet retired? I am guessing that even if there was a single employer pension system, it can't/won't transform into a private sector system, but a new private sector system might be created.

Can a rehab plan change vesting from 5 years to 10 years ? Would changing the vesting improve the liability outlook for the plan?

There are lots of references to "church plans" out there, but am I right in thinking that they must all be set up under some section of the code, such as a 403(b) church plan, 401(a) church plan, etc? So, that if someone starts talking about a church plan, it's important to determine what type of church plan we're discussing because 403(b) regs aren't the same as those under 401(a). Can there be a 457 church plan? I know that churches can be electing or non-electing when it comes to ERISA, and that in many cases they don't even need to have a plan document, but doesn't there have to be some set of rules to go by other than saying they have a church plan?

I continue to struggle with the differences between 401(k) and 403(b) plans. I would think that there has to be a compensation cap, but I've put my foot in my mouth enough times when it comes to 403(b) plans because I keep applying 401(k) logic. Thanks to anybody who chimes in.

An employer maintains a medical plan as one of the options available under a cafeteria plan. Under the plan, the children of a domestic partner are considered eligible dependents under the plan. Under pre HCERA law, there were many hurdles which made it difficult (if not impossible) for a child of a domestic partner to qualify as a dependent for purposes of Code Sections 105 and 106. Under the law as amended by HCERA, a dependent includes any child (as defined in Code Section 152(f)(1)) who has not attained the age of 27 as of the end of the taxable year. The child definition includes a stephchild. Since it is likely that the child of a domestic partner will be a stepchild to the employee, would the employee's coverage of such individual be tax-free?

We have not been able to get a satisfactory answer from Relius as to whether Relius Administration 15.0 works under the Microsoft Windows 7 operating system. Any input would be helpful.

Is anyone currently running Relius Administration 15 standalone version on a computer with MS Windows 7 as its operating system?

A client has a 457 Plan with Employer contributions. The client is a governmental agency (local township office). The contribution is a Matching contribution that is given as a flat percentage of compensation (4%) to any one who is making salary deferral contributions, regardless of their rate of participation.

Does a 457 plan have to perform ACP Testing for this match?

Is anybody else involved in the submitting for approval letter from the IRS on IRAs/SEP/SIMPLE documents? I currently have applications that are over a year old and I can't even get somebody to answer my calls/emails. I am just wondering if this is a wide spread problem?

Thanks

Plan has a termination date of 3/31/10. It is considered Top Heavy for 2010. The company has not closed down, so, most everyone was still employed on the Plan Term Date.

Do I use comp through 3/31 for all those employed on that date? (There were a few people who left the company in Jan & Feb.)

I'm looking for a good explanation of why I would pick an R6 share, over a R1, R2, R3, etc. I know there is a difference in the expense ratio and operating expense. Is there anything else?

Are governmental money purchase plans required to offer annuities as a form of distribution?

What % of pension plans reduce normal benefits for alternative payments (ie. 50% survivor) by the same % for every retired employee vs. based on PBGC interest rates. For example. a 89% reduction for 50% survivor no matter when you retire.

After December 31, 2010, will medical supplies such as blood pressure monitors, reading glasses to correct far-sightedness, fever thermometers, etc. still be reimbursable under an FSA?

Thanks.

An Employer went to all the work to establish a 401(k) plan with a 4% Safe Harbor matching formula but never announced the plan to their employees. Now they have decided they don't want to proceed and the plan has been in effect since the beginning of the year. Do they need to file a 2010 Form 5500? Would your answer change had they elected the 3% Non-Elective Safe Harbor formula?

Custodial accounts that are investe solely in mutual funds are one of the permisisble funding arrangements in a 403(b) plan. If a target date fund in the 403(b) plan is unitized may it still be considered a mutual fund?

Money Purchase Pension Plan - how do you correct an RMD if participant was required to begin receiving and never received. This happened in 2007. In late 2008, he passed away and the plan has been sitting ever since. I understand it is an orphan plan and you go under VCP - but what about the RMD? I know you can correct RMDs under VCP, but not sure how to go about it in this case.

Thank you!

Can the trustees of a Taft Hartley trust alter the trust document to prevent the employer and the union from removing and/or choosing trustees?

my employer (in California) recently switched health insurance plans. previously, we had a choice between an HMO and PPO. now, there is only one plan. benefits are the same to everybody who enrolls, however, the employee's contribution is based on what plan they were enrolled in previously with the old insurance provider. if you had the HMO before, you pay less than employee's who had the PPO before (even though the benefits are exactly the same).

can they do this? are there any discrimination laws that are being violated? how can you make different employees pay different amounts when they are receiving the same benefits? I can understand if it was based on something like date of hire, but this seems rather arbitrary. I had no idea that my plan choice for the last year was going to effect my payments for the future.