I have been asked to review a DRO, and have found a number of issues.  While I have done this hundreds of times, this one is a problem.

The first issue is the amount is defined as a flat dollar value without adjustment for interest.  While this is fine, they fail to even define when the payment needs to be made!  Basically, whenever the Plan Adminisitrator feels making payment is appropriate.  Not disqualifying, but clearly sloppy drafting.  

Second problem is the the DRO makes the form of payment election for the beneficiary.  The Plan does state that with a QDRO the Alternate Payee is to be provided with all elections that would be available to the participant.  In addition, going by the DRO there would be no 402(f) Notice to the recipient.  I believe these 2 conditions would be a violation, making the DRO not qualified.

The language of the DRO states that if the Plan Administrator determines the Order is not qualified then the parties will cooperate with making those changes for the DRO to be qualified as defined by the Administrator.

With that finally point in mind, I called the attorney who drew up the DRO and had it submitted to the court for signature.  She proved to be the attorney that one article on QDROs identified.  Totally adversarial, and disrespect of all points made because I am only an ERPA.  Perhaps she is right, but I do have 32 years experience and her paralegal told me they have very little.  In fact, they wanted me to draw up the QDRO for them initially.  I said no as my job is to review, not create the QDRO.  Of course, my declining the honor of writing the QDRO for them is deemed as a reason that I have no right to bring up problems.

I feel I am stuck since I do not believe the DRO is qualified.  If I am in error on that, please correct me. Assuming I am right, what should the next step be since the attorney clearly has no intention of working to resolve these issues.  Any and all advice is greatly appreciated.

Currently using TSM which will no longer be supported after this year.  (using FtWm for documents/5500)

Considering Schwab SRT and ASC.  Thoughts on the two? anyone who has used both?  Recommendations for other software? Thanks!

We have been asked to respond to an auditor's inquiry.  We are not aware of any litigation regarding this company.  However, there is a union grievance related to changes they made to the retirement plan.  Has anyone considered the issue of whether a union grievance constitutes a "claim"?

I'm being told:

a) If they allow in-service distributions at age 65 then everything is taxable when someone turns age 65 due to constructive receipt rules;

b) If the Plan says you can take your distribution when you become an inactive volunteer, then everyone is taxable when they become inactive for the same reason.

Is this right?  I'm having a hard time finding a good article on the mechanics of how these things work.  Frankly it seems totally unworkable and I'm just curious if I'm missing something...

We have a client that changed a full time employee to part time.  The employer actually prepared and the employee signed a document that reads "Severance Agreement and General Release".  This document states that the employee and the company separated on Marcy 31, 2017.  There is another letter that is an "offer" for the part time employment effective as of 4/3/2017.  As part of the Severance Agreement the Employer agreed to make monthly payments of XX amount for a period of one year and this amount would be paid in 26 installments on the normal payroll schedule.  I know that if this was pure severance, it would not be plan comp.  I am hung up, however, on the concept of "severance".  Did this employee actually sever employment?  Just because a document was prepared and signed does not create severance (form over substance)?  If we decide there isn't severance, would this NOT be Plan comp for some other reason that I am missing?

Thanks 

I am having trouble finding an actual regulation or part of the DOL/IRC that references exactly how often ERISA expense account excesses should be allocated to participants. Can anyone help me with this? Is there an actual law/regulation, or is it just a good practice? Everything I have found is related to forfeitures, but does not reference ERISA accounts.

Participant is on worker's comp and has not worked since November 2016.  Participant is now working at a non-profit, while being on worker's comp.  The sponsor indicated that the hours are being reported to them to pay the participant.  Are these wages eligible for deferrals?  Thanks.

I have been asked by a prospective client how the $5,000 force out limit applies to a terminated participant who will receive an additional allocation that will bring the balance over $5,000. For example, assume the participant terminates employment July 9 with a balance of $4,750. But the plan makes a profit sharing contribution after the end of the plan year. The participant will receive an additional $600 at that point, which would bring the account balance to $5,350 (assuming no change in the investment balances).

Knowing that many record keepers automate this process and would process the distribution before the end of the year with no way to anticipate a contribution receivable, I'm curious what the potential liability to the plan sponsor might be, if any. Does the answer change if the termination or distribution occurs after the end of the plan year? Or if it is a required contribution, such as a safe harbor other fixed contribution?

We have a question regarding the IRS policy on accepting certain kinds of corrections (not ones discussed in its common plan defects), and would like to speak to someone at the IRS about it.  However, the IRS doesn't appear to publicize any information about which staff members are involved with the EPCRS program.  Has anyone had any experience in finding an actual human to speak to?

Quick (we hope) and unscientific survey:

If a plan's sponsor were to read all of its plan document, how many pages would that be?

In the prototype or volume-submitter set you regularly use, counting the adoption agreement, base document, and all appendixes and supplements that state provisions of the plan, how many pages (in total) is it?

Hello,

I am new here and I am not sure how much I am suppose to share - but I am looking for some advice so here she goes. I am recently divorced looking at 50 soon and need to rebuild my 401k post the divorce.  I have 250K left, so a long way to go.  I currently contribute $18,000 pre tax and my company matches 6% or $10,800.  Additionally my company contributes a varying amount annually to make up for freezing of my pension - this last year the contribution was $10,000.   My frozen pension has a meager $60,000 balance and seems to be growing at 4%. 

In December I turn 49 and I believe I am eligible for catch-up payments starting in January, is this correct?  I will make the full $6,000 once permitted.

I am about to purchase a new house (renting a small apartment currently) .  I'll owe 325K on the mortgage and plan to pay that off in 5 years (certainly in 6).  to accomplish this I will not touch my 401K contributions as defined above.  Once the house is paid off I will be 55(ish) and can then maximize my 401K combined contributions - I think I read that's $54,000 + the pretax catch-up of $6,000 making it $60,000.  Is that accurate?  is that all me or does it include employer match? if not than my total contribution could be $70,800 ?  also, what about the additional amount being funded by my employer due to the old pension - does that have interplay?  

Given what I have explained here - what realistically might I be able to grow my retirement fund to at 60, 64 and 67.  I'd love to retire at 60, would accept 64 and if need be and health holding out 67.  My final question, with the projected retirement fund - what could it pay without touching principal? and how much would it pay if I planned to pull 40 years from it and net to zero?

lots of questions, I know.  I hope I am posting this in the proper section - any assistance would be greatly appreciated !   

I work for a payroll company One of the sales reps sold the "wrong" kind of 401k plan to a client  in 2016. This client has large turnover, etc. Plan was set up with no eligibility requirements. It ended up being top heavy for 2016 and 2017. TH contribution was about 100K for 2016.Plan did not pass adp testing either. I was just asked to re-do the documents and set up the plan as a safe harbor with the original effective date. I was just told tp pretend that it was always set  up like that. I don't feel comfortable doing it.  After all, it's a year and a half later!

Any suggestions?

Husband and wife are both in a plan.  Husband dies.  Can spouse roll to her account in the plan or does it have to be to an IRA?

Thank you

The BenefitsLink elves have been busy lately, cobbling together an improved version of our online directory of webcasts and conferences for employee benefits practitioners.

The directory shows upcoming webcasts and conferences from many different firms, and shows hundreds of recorded webcasts available for immediate viewing.

Find the directory at: https://benefitslink.com/events

By choosing various options on that page, you can drill down to view only those webcasts and conferences that match particular criteria.

Here's a link to one particularly useful view:

240 free recorded webcasts about health and other welfare benefit plans

We now have a total of more than 1,200 webcasts and conferences listed, for all kinds of benefit plans! (That number includes events for which a fee is required by the sponsoring firm, and those that are free.)

Enjoy!

Dave Baker, Publisher
Lois Baker, President
BenefitsLink.com

The BenefitsLink elves have been busy lately, cobbling together an improved version of our online directory of webcasts and conferences for employee benefits practitioners.

The directory shows upcoming webcasts and conferences from many different firms, and shows hundreds of recorded webcasts available for immediate viewing.

Find the directory at: https://benefitslink.com/events

By choosing various options on that page, you can drill down to view only those webcasts and conferences that match particular criteria.

Here's a link to one particularly useful view:

295 free recorded webcasts on issues affecting retirement plans

We now have a total of more than 1,200 webcasts and conferences listed, for all kinds of benefit plans! (That number includes events for which a fee is required by the sponsoring firm, and those that are free.)

Enjoy!

Dave Baker, Publisher
Lois Baker, President
BenefitsLink.com

A participant retired in May of this year.  She is on Social Security.  She sent in a form for only a partial distribution.  The Plan document specifically say "lump sum" only and no annuities.  She is wanting to take a minimum out each month so that she does not mess up her SS....

What should the Plan Sponsor do?  Force her out/rollover to an IRA?  Her balance is around $1800.00

Would allowing her to take 4 partial distribution violate the plan terms?  Sounds like she is attempting to have her account annuitized.

Feedback please.  Thanks.

I know that the participant is issued the tax form when paying a QDRO for a child support order, but is that participant subject to the 10% tax penalty or are they exempt as is a spousal recipient?  Thanks in advance for your help!!

I have a client that maintains two plans, and had tax withholding due to distributions from each plan.  Should these be reported on one Form 945 (it's the same EIN number), or do we file two separate forms?

Thanks!

I have a prospect with two car dealerships. They have multiple employees who work at both locations, including two HCEs who work at both locations but only take a salary at one. This gives me two HCEs in the one company with zero pay and zero deferrals. One of the HCEs is the owner so I can’t really mark him as terminated in the plan where he does not have comp. What would you do in this situation? Do I leave them in the test?

My questions for them are:

1.  Are there two plans or one

2. Is this a controlled and/or affiliated service group, i.e., an employer with multiple entities ( to which all entities singed a participating employer agreement) and as a result all such entities participate in this single plan.

Anything else I should know?  I assume I can test combined or separately, as long as 410(b) passes separately

I was married a short time prior to receiving my first payment.  My wife (who is not a US citizen) left a few days after I received my first check.  I have since divorced.  Is there any way to replace her as beneficiary?  She may have gone back to her home country and would not even be able to receive it anyway.