Hi,

Could somebody point me to the California state law that stipulates that county offices of education are the focal point for contributions to 403b/457b vendors of all school districts in that county.

Case in point: my employer says that its a state law that requires my K12 employer to send all contributions to the county office of education before going into TIAA CREF, therefore, slowing down the process. What specific law in California requires this?

Thanks,

Steve

Exceptional Site - Very Informative:

My rights as an Alternate Payee (AP) have been both ignored & denied. AZ. Legal Separation Decree 9/2003 w/30yrs. relationship, 21+ yrs. to marriage. Parties to retain pension attorney to divide the community interest of all employment related rights, including pension, disability or survivorship benefits by QDRO in Husbands Pension Plan. Date of employment to the date of service, 11/4/02.

Husband retired early 6/2005 @ 62yrs. filed Application for Benefits days before retiring. Delayed retaining pension attorney even after continous reminders/orders by court/attorney's.

07/05 - Husband's first monthly pension benefits includes my benefit amount.

08/05 - Back to court & husb. ordered to immediately hire pension atty.& informed my share of benefits once ordered husb. needs to pay back my awarded amounts.

09/05 - Receive pension atty.'s mailed documents - standard terms and conditions: wants my signatureto agreement, QDRO draft: wants my written approval of the draft Orders, QDRO draft & coverletter already sent to PA where pension atty. informs PA: Order calls for AP to receive her marital interest of the accrued benefit. He followed the Plan's model language although he varied the format slightly, Order prepared as a "separate interest" order & not sure if that option is still available to the AP.

I did not sign any of atty's.documents.

10/05 - Pension atty. had husband issue one of his personal checks to me - awarding me a different benefit amount. Gave no explanation/reason why. Refused Check. Asked husb. why he & atty. refuse to communicate with me & atty. represents his retirement interest only even going as far to take my awarded & entitled benefits.

Court reminds husb. again that he needs to refund my share of the benefits. I'm ordered to call pension atty.

10/31/05 - Leave voice mail for pension atty. - I remind atty. - Court order to equal division to "All" benefits, lengthly relationship, my disappointment in atty.'s refusal to advice/inform/provide/assist/represent my interest into pension plan, and knows nothing of me.

11/05 - Receive Application of Benefits from PA.

11/05 - Call PA next day. Inform PA of no understanding to retirement/pension Plan and his Application of Benefits. Discussed above issues. Told not to accept any form of benefits from husb. or atty., confirmed husb. already receives monthly benefits which he was unaware, thought he received a benefit amount just once. Company attorneys presently reviewing documents which could take a couple months or much longer, will contact me once he (PA) receives info. I'm to return his Application/direct deposit forms only my info. & signed.

Returned documents to PA, with copy to Legal Sep., atty's.,cover letter, divorce attorney's statement equal share of pension.

12/05 - Pension atty. files QDRO w/a complaint - took my words out of context from voice mail. Judge signs & he intials-11/10/05. Date I received PA's forms.

05/06 - I call PA - Plan ? does not represent me anymore. Given New PA locally - Unable to locate me in their system, denied any kind of help from new PA.

06/06 - Call union representative. PA contact name issued & to provide me document to Plan change. PA called - continued to be denied help. Eventually mail an SPD dated 01/1996, but did not contact first PA for my info. as promised. No one could tell me date or why Plan's changed.

01/06 thru present unsuccessful in obtaining legal representation. Told AZ has only three pension attorneys representing union plans.

11/06 - An atty. did contact PA for me. Atty. informs QDRO copy should not qualify as a 'separate order' Husb. receives monthly benefits, send a copy of filed QDRO w/court; send PA certified QDRO asking to determine if order complies w/terms & conditions of the Plan.

12/06 - After Xmas receive from PA - statement that certified Order & pension application copy given to Plan's attorney & actuaries to verify my portion of the pension is calculated correctly and my effective date of payment.

02/07 - Received check statements that Plan has made a direct deposit to my account from 12/05 - 02/07.

03/07 - Received another SPD date of 03/1999 w/ PA's statement that they have completed the processing of my QDRO pension payment. Effective date 12/01/05, direct deposit into my account as I have directed between the first and third of ea. month. If I have questions regarding payment calculation - to contact.

05/07 - On own filed an Appeal to Plan over 30days ago. Still have not heard from them.

Defined Benefit Plan.

I noted QDRO document says: AP may not elect the joint and survivor form of benefit. The following option is elected: single life annuity. I'm about sixteen years younger.

My question is: When & Who else can I appeal to? What documents am I entitled to? Where can I find legal representation/help with above issues? Exhausted AZ. lawyers for union pension plan. AZ. Firms tend to represent companies. Are attorneys advertising on the internet a safe option?

Information to retirement/pension plans is very confusing. What little I know I learned on own and with your websites help.

Won an appeal to the BAR on my divorce attorney, but the BAR dismissed complaint. Truly an injustice the documents speak for themselves. I even have atty's own handwritten document admitting to: (atty's words)

Did not go over her paperwork.

No AFI from Husband or other info.

Appts. lasted minutes.

Knew nothing of her or case.

Bankruptcy attorney & Pension attorney - is a continuation from the beginning of my case.

Any options I can research to save at least the pension benefits are greatly appreciated. Thanks Much.

Has anyone run into the following: QDRO acknowledged by Plan Administrator. Participant has been receiving retirement pension benefits for 9 years; alternative payee just contacted Plan to inquire when she can start receiving her benefits. Plan does investigation and acknowledges that due to an administrative error, the QDRO was not sent to the new Plan record keeper. Wants retiree to repay lump sum of overpayment from last 9 years, so it can send lump sum and monthly benefit to alternative payee in accordance with QDRO. Retiree was not aware of any overpymt until recent letter from Administrator. In fact, 9 years ago retiree requested a benefit calculation from Plan and accepted monthly benefit 9 years ago based on Plan's calculations. Is there anything relief for retiree or any law that protects Plan 'administrative error'? Thanks so very much.

Can a QDRO be used to collect attoney fees for opposing counsel from a TIAA CREF annuity account?

Sorry for the length of this post but I think this group will find my case interesting and unusual.

My ex wife and I were divorced Nov 21, 2000. Date of signed final order.

Per the MSA I was to transfer $97,500 from my TIAA CREF accounts to former wife.

I hired an actuary who contacted TIAA CREF and my Univerisity to draft the DRO and for approval by both.

Draft was approved and sent to court where it was signed June 28, 2001.

Singed QDRO was sent to both my attorney and opposing counsel, neither of who forwarded to TIAA CREF.

Oct 2001 my attorney realizes QDRO has not been sent and obtains certified copy from court and sends to TIAA CREF. TIAA CREF responds to me and former wife that they will set up new account for former wife with funds transferred on Nov 21, 2000.

Former wife's counsel faxes letter to TIAA CREF not to process. No appeal or other legal action was taken to stop QDRO processing. In Feb 2002 counsel for former wife produces AMENDED QDRO in court and has Judge sign with no hearing etc. We try everything in legal means to block AMENDED QDRO even appeal but it fails. (This is in Dade County FL)

TIAA CREF informs me in Feb 2002 that there are insufficent funds in the accounts listed in the AMENDED QDRO so that an amount less than $97,500 will be transferred. In Oct 2002 after appelate court ruling sending QDRO back to circuit court former wife sends Amended QDRO and appelate ruling to TIAA CREF for processing. My attorney informs former wife that Amended QDRO will transfer less money than original QDRO. She accepts Amended QDRO anyway which transfers approximately $90,800. Transfers are completed in Dec 2002.

Now my former wife and her new attorney have been litigating the shortage of the QDRO and other issues of now monetary value. The Judge in my case has always been the same Judge who has consistently ruled against me no matter what the facts are. Now the Judge says I am responsible for my former wifes post divorce attorney fees. However, at this time there is no order for a QDRO.

The only asset I have is my TIAA CREF account. I remaried in Dec 2001 and my current spouse is the alternate payee and beneficiary. The Amended QDRO removed my former spouse as alternate payee and beneficiary when TIAA CREF recieved the QDRO and processed it. It specifically states that all untransferred assets are now the sole property of the participant and all transferred assest are the sole property of the alternate payee.

Unknown to me and my attorney, a CPA firm in Coral Gables, FL has sent a fax to TIAA CREF as a Draft QDRO. TIAA CREF did not notify me of this contact and I became aware when TIAA CREF sent a response to the CPA firm saying the QDRO was OK. This is despite the fact that in the QDRO it states that the money is for Legal Fees and Other Fees and Interest and Income Taxes. Furthermore, there is no cashable portion of my TIAA CREF accounts as that was completely depleted by the AMENDED QDRO. This QDRO names my former spouse as the Alternate Payee and Beneficiary. (How can that be? It seems to me the executed AMENDED QDRO terminated those possiblilities.)

I am dealing with some very low level characters here and I want to know if there are any criminal charges I can file and whether I should go to Federal Court to get a blocking order should this QDRO be signed by this Judge who I believe will sign anything??? What other legal or other actions can I take? I have already reminded TIAA CREF and the University they are not to speak with anyone regarding my personal information or retirement benefits.

Does anyone know if there are any problems with the corporation who sponsors a 401(k) plan also serving as trustee of the underlying trust? I cannot find anything that either expressly allows or disallows employers from serving as trustees, although intuitively it seems that it should not be allowed.

Not really a question about the detailed overlap between the two sections, etc. but more a big picture question based on the interaction of the two rules and presumed increased regulatory focus / scrutiny on 457(f) arrangements as a result of 409A.

My question is this--does it really make any tax sense for an executive to want to have amounts go to a 457(f) plan as opposed to being able to get the same amounts paid currently. In this case, the company could probably be convinced to pay the same or nearly the same amounts now as it will set aside under the 457(f) Plan although that hasn't been officially decided.

Amounts going to the 457(f) plan will be subject to forfeiture if executive does not remain employed through x date which coincides with end of employment term and the individual's planned retirement. Deferred amounts will be paid to executive upon his "retirement" or shortly thereafter. It seems unlikely that the individual will leave the company before x date so, although real, the risk of forfeiture is not particularly great.

Executive desires to defer amounts on advice of financial consultant. The consultant thinks that deferring recognition of income (and thus taxes) until the executive's retirement is a good thing tax wise. I am no so certain that is the case in a 457(f) context though.

Given 409A and recent rumblings about the IRS's skepticism of, and likely future clarification to, the significant risk of forfeiture rules under 457(f), the employer is not interested in linking vesting / substantial risk of forfeiture under 457(f) to a noncompete. The Company also would not likely permit Exec to make a "rolling risk of forfeiture" if current plans change and the executive continues employment past x date. In short, the company fully intends that amounts going to the 457(f) plan will vest and be paid to executive on x date as long as the executive remains employed through such date.

In this scenario, the vesting / payment date is mid-year so that the deferred amounts (plus earnings) will all be paid to the individual in a year in which he will have earned significant income from his regular salary through mid-year. If, as planned, he retires after that time and has no other regular salary for the year, it may be that he has a lower overall income as compared to the prior year. However, he will undoubtedly have some salary increases over the next few years and there will be some special bonus payments in the retirement year that may jack total pay up. As a result, I suspect the Executive would have a significant income in his retirement year and thus is likely to be in roughly the same tax bracket as he is currently.

In short, there is no clear guarantee that the deferred amounts will be paid out in a tax year in which the Executive clearly has a much lower income. As a result, I don't see any clear tax advantage to deferring the amounts. If I were him, I would prefer to get the amounts now and invest on my own to try and get capital gain / dividend tax treatment instead of having all earnings taxed at ordinary income rates. And that doesn't even address the fact that the amounts going to the 457(f) plan will be subject to forfeiture.

What would be ideal----and what I suppose I'm really getting at with this question----is whether there is any way in having the deferred comp amounts vest and be paid out in the tax year following his retirement (or maybe even later) so that there is a real chance he will be in a lower tax bracket. Given the company's reluctance to try and tie vesting to a noncompete or permit some rolling risk of forfeiture and 457(f)'s requirement that amounts be taxed when they are no longer tied to a substantial risk of forfeiture (i.e., conditioned upon the future performance of substantial services), I'm just not getting where a 457(f) arrangement makes any sense. What does the financial consultant see that the company does not?

In small plans it's common in our firm to use NRA of 55 for those owners with compensation less than the 415(b) dollar limit at age 62 ($180,000) so as to increase the value of the accrual and thereby the funding cost. So the final regs on phased retirement put the onus on the employer to choose an NRA that is "reasonable" in their industry. 62 is a safe-harbor, between 55-62 is a facts and circumstances and the client is on the hook to provide supporting data that something like 55 is reasonable in their industry.

I'm not sure just how concerned to be here. While the Reg deals primarily with in-service (post NRA) distributions and what's a reasonable NRA for that purpose, It also presumably affects funding for those scenarios above. Anyone disagree or see any way around having to use NRA of 62 for funding for small employers who can't easily provide supporting data for an earlier NRA ?

Any thoughts out there as to whether some of the existing plans with NRAs of say 55 will be amending them to say 62 ? It seems in some small industries finding supporting data will be difficult.

I know that the IRS safeharbor 402(f) notice is too old to include Roth 401(k) (among other things like non-spouse rollover). The IRS is going to revise it but it won't be soon enough for us unfortunately.

I also understand that the IRS position is employers must customize the new model for things such as Roth 401(k)s if it adopts them. I have never seen a revised version so I am not sure that this is really being done, but we need it done.

Does anyone have thoughts on how much to add (or can confirm that we even need to add) to the model to incorporate Roth 401(k)s (we did adopt them). Do other items like non-spouse rollovers need to be included (we may not have adopted plan amendments yet)?

Any checklists of necessary revisions or sample revisions would be greatly appreciated!!!

The new IRS regulations provide that 62 is a safe harbor, and between 55 and 62 will depend upon reasonable facts and circumstances determination for that particular industry.

If a plan’s normal retirement age is

earlier than age 62, the determination of

whether the age is not earlier than the

earliest age that is reasonably

representative of the typical retirement

age for the industry in which the

covered workforce is employed is based

on all of the relevant facts and

circumstances. If the normal retirement

age is between ages 55 and 62, then it

is generally expected that a good faith

determination of the typical retirement

age for the industry in which the

covered workforce is employed that is

made by the employer (or, in the case

of a multiemployer plan, made by the

trustees) will be given deference,

assuming that the determination is

reasonable under the facts and

circumstances.

My question is this: does anyone know of a DOL or IRS database, etc., that gives statistics for the normal retirement age for various professions/industries? What evidence wil the IRS accept as "reasonable" to prove this? Anyone have any other information on this? I've seen no additional comments from IRS personnel, and our EA was at the ASPPA conference in Boston last week, and this apparently wasn't addressed, or at least not at any session she attended. Thanks.

We have a rehire who took a distribution while terminated. At that time the nonvested monies were forfeited. Our plan document allows for the restoration of forfeitures, but only if the vested monies are repaid.

My question is: does the repayment need to be from a pre-tax source, such as an IRA or other qualified plan?

Thanks in advance!

I'm here on this lovely Friday to beat the proverbial dead horse. I have tried the search feature and per my usual ineptness, couldn't find what I wanted. Here's the story...

401(k) profit sharing plan with approx. 245 participants, plan assets are transferring from one investment provider to another. The "old" assets have 2 GIC accounts that will have a market value adjustment upon transfer of approximately $8,000.

There are approx 25 participants (of the 245) in these accounts and of those, about 3 to5 participants with the bulk of the $$ who will have the largest mva. Of course, you all know that one of the 3 to 5 with the largest balance in the GICs is the owner. (I haven't looked yet, but I suspect the others are also HCs, but not key).

The Company wants to pay the $8,000 to "make the participants whole". I know that this isn't allowed.

Is there any way for this client to do this and still remain within the confines of the Code?

Thanks in advance.

I'm trying to get a handle on any deadlines that exist for making 125 plan election changes.

Plan document says that participant must make new election within 30 days after an event that allows them to make an election change. Employer is interested in making this a little more liberal where possible (so if it is possible, it is recognized that a plan amendment would be required).

Here is how I'm interpreting Sec 125-4 of the regulations:

1. If the change comes from a special enrollment right, then Section 9801(f) of the Code requires that the change be made within 30 days of when the right arises (i.e can't be made more liberal).

2. If the change comes from a "Status Change," the consistency rule requires that the change be "on account of and CORRESPONDS WITH" the change in status. What "corresponds with" means isn't discussed and no specific deadline is identified. So it looks like a participant could change an election within some reasonable period after the event, such as 30 days, 31 days (maybe even by the end of the month following the month in which the status change occurs?).

3. If the change comes from anything else authorized (Court Order, entitlement to Medicare/Medicaid, significant cost or coverage changes, FMLA), there's no deadline and the consistency rule doesn't apply, so there's no apparent deadline at all, although as a practical matter an employer would probably want to impose one.

Any comments, insights, remarks would be appreciated.

Thanks!

the scenerio is this...a participant in a 403(b)wants to continue to defer into the 403(b) but take distributions annually and roll them over to a 401(k) plan. he is over 59 1/2. my thinking is that he could do it but i dont know much about 403(b) plans.

A small closely-held company is implementing an ESOP and is in the process of appointing trustees. There will likely be three trustees - a non-management employee, an independent director from the Board, and an outside trustee.

Does anyone have thoughts on what would be considered "reasonable compensation" for an individual serving as an outside trustee? The trustee would not provide any services other than as trustee (e.g. no accounting, vote tabulation, etc.).

I appreciate any thoughts, as the "reasonableness" and "facts and circumstances" language of the §4975 prohibited transaction rules does not provide real-world guidance.

We are a TPA shop that provides administration to qualified plans that are with banks, insurance carriers, and direct to mutual fund companies. We have approximately 25 401(k) plans direct with Vanguard. These plans are in "pooled" accounts. In other words, the assets for each plan are pooled under one trust at Vanguard; each participant does not have a Vanguard account. We breakdown the accounts on our recordkeeping system. Participants logon to our website to view balances and make trades. Vanguard has no idea who the participants are, only the retirement plan trust as a whole. When a participant wishes to make a change on our website, we then logon to the Vanguard website, under the retirement plan trust, and initiate the trades, subsequently confirming them on our system. We do not use a trading platform.

Recently Vanguard instituted a "frequent-trading" policy for pooled retirement plans. Generally, if a plan makes an exchange by phone or online, the plan must wait 60 calendar days before exchanging back into the same fund. Reallocation and rebalancing transactions are also subject to this policy.

As an example: We have a plan with 50 participants using 10 Vanguard mutual funds. John Smith exchanges from the 500 Index to the Primecap on June 15th. The other 49 participants cannot exchange into the 500 Index Fund for 60 days.

Vanguard is putting us at a distinct disadvantage as a TPA. For example, a bank can offer Vanguard funds through their trust, and they are not subject to this policy. So we can administer two plans, one direct with Vanguard and one through a bank, offering Vanguard funds. The direct to Vanguard participants cannot trade, the bank plan participants can have unlimited trading in the exact same funds. Vanguard is actually forcing us to add a layer of cost, the bank trustee fee, in order to offer trading to plan participants.

I can understand that Vanguard is trying to keep trading costs down, but this policy seems ridiculous to me. How can any company follow (let alone write) a trading frequency policy in their retirement plan with these guidelines? We have tried explaining our concerns to Vanguard, but have hit stone wall after stone wall. Is anyone else dealing with this issue at Vanguard, or any other mutual fund company?

Thank you.

Hello,

I was hoping someone might shed some light on a situation that I am hoping to realize a prohibited transaction exemption under self-dealing rules. Here is the situation:

- Plan sponsor and insurance firm are owned by the same family (insurance firm is NOT owned by the sponsor however)

- separate boards of directors and officers for each company

- employees of both companies are covered by the same plan

- product is a group annuity type

- insurance agent receives commisions on the plan at a rate approx 75-80% below typical market rate

I was thinking that PTE 77-9 and/or PTE 84-24 might apply here since the commisions certainly pass the reasonable test and do not represent a significant portion of the insurance agent firm's total commision-based compensation. Thoughts?

We have a large DB client (about 600 participants) that is interested in terminating during 2007 and distributing during 2008. They have asked for an estimate of the distribution liability at a projected distribution date of May 2008. The plan's current assets are less than the plan's distribution values based on the current distribution assumptions, so they are concerned about the potential additional funding.

The calculation system we have is Datair. What assumptions would you suggest using to estimate the distribution values?

Thank you

I know there is a rule that if a cafeteria plan is maintained pusuant to a bona fide colletive bargaining agreement, it is not subject to the 125 discrimination rules. But what if there are non-unit employees of the employer that participate. Are they exempt as well? Or is there some concept of disaggregation (akin to the qualified plan discrimination rules) that would require the non-unit employees to be tested as though they participated in a separate plan?

Thanks.

A large 401k (over 5000 ees) plan is terminating. The trustee has put in a lot of time with both a DOL audit and in assisting with the accountants audit, as well as other admin. issues. Trustee wants to bill his time to the plan, which would result in around $20,000 invoice.

He can't do this, right? This would be a Prohibited Transaction. But, given the time spent on all of this, could the employer pay him for his time?

Thanks