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Thank you for the input. Below are answers to some of the questions raised. I'm coming at this from the plan's perspective and want to ensure the rights of all parties, and the plan, are protected. This is an ERISA plan. Additional information indicates there was likely a good faith mistake in the original decree. Work was performed in one area, but benefits accrued in another. It is a multiemployer plan and a reciprocal transfer authorization form was signed by the participant. This means contributions were paid to the plan in City #1, but transferred to the plan in City #2. The original decree named the City #1 plan, but the vesting, service credit and benefit accrual all occurred with the City #2 plan. Original divorce decree assigned 50% of the marital benefit, noted a QDRO would issue, but named wrong plan. Very little detail otherwise. Participant had not reached retirement age, but was remarried for more than one year at the time of death. The case law, although inconsistent, suggests to me that the ex-spouse would likely have a difficult time in a contested fight to: 1) alter the original decree that is now a decade old; and 2) obtain approval for a posthumous QDRO. The hope is that the current and ex-spouse are cooperative with one another and find a solution to avoid litigation or an interpleader action.

Participant's divorce decree from a decade ago granted his ex-spouse 50% of the pension benefit accrued during the term of the marriage. No QDRO was ever filed and the participant passed away a few months ago. The ex-spouse has retained an attorney to draft and file a posthumous QDRO. The draft DRO itself is well-written, but the original divorce decree submitted with the draft DRO is a problem. It lists an incorrect plan name and awards the ex-spouse benefits from that plan. There is nothing to indicate the parties ever intended for the ex-spouse to share in the benefits from this plan. In some cases, a court will grant nunc pro tunc (retroactive) orders to correct clerical errors, etc. However, there are cases stating a retroactive order cannot be used to create new substantive rights that didn't previously exist. In this case its not clear whether the local family law court would modify the original decree, or whether the plan could accept that modified order. (The participant had remarried and there is a viable argument that 100% of the survivorship rights vested in the new spouse at the time of the participant's death.) Any thoughts or ideas are appreciated. The posthumous QDRO rules from the DOL are not instructive and the cases are all over the board, even after PPA.

This is not the exact source I've seen before, but the Internal Revenue Manual warns agents to watch for impermissible CODAs in multiemployer MPPPs. IRM 7.11.6.6.10.2 (09-18-2015) CODAs in Money Purchase Plans (1)The only money purchase plans permitted to include a CODA are pre-ERISA plans (existed June 27, 1974 and included the CODA at that time). See IRC 401(k)(1). (2)Plans or CBAs may contain provisions that, although not described as a CODA, result in elective deferrals. Unless this arrangement is part of a profit-sharing plan and satisfies the requirements of IRC 401(k), the CODA isn't qualified. See IRC 401(k)(1). (3)Scrutinize multi-employer plans that incorporate tiered contribution or allocation formulas to determine whether these formulas provide an election. a.In most cases, when an employee changes classes/tiers, the plan makes an increased contribution and decreases the participant's wages by the same amount. b.If the participant may elect to reduce their wages and increase their contribution, then the plan is, in effect, a cash or deferred arrangement. (4)To detect this type of arrangement, read the language in the CBAs and in the plan. (5)If the language is incorporated by reference, be sure that the incorporation follows the rules of IRM 7.11.6.3, Incorporating Auxiliary Documents by Reference. (6)The tiered annuity contribution formula could also fail the definitely determinable rule of 26 CFR 1.401-1(b)(1)(i) if the tiers are determined by an individual or party other than the employee participant. The plan may not allow discretion for contributions to the plan, and the contribution must be the employees' decision. (7)If you find a post-ERISA money purchase plan with a CODA, disqualify the plan unless: a.It's an initial plan submitted within its first remedial amendment period and the plan is amended to remove the CODA. b.The taxpayer enters the Closing Agreement Program. See IRM 7.11.8, EP Determinations Closing Agreement Program. c.The taxpayer is entitled to IRC 7805(b) relief. (8)These arrangements are often difficult to detect and tend to be at least partially contained in the CBA. See IRM Exhibit 7.11.6-1, Sample Language of a CODA in a Money Purchase Plan, for sample language which may indicate that a CODA is present.

"A money purchase plan specifies a mandatory employer contribution of a fixed percent of pay for each employee. It is not a CODA and employees cannot make an election to change the percentage." This is really what I'm getting at. A MPPP cannot offer a CODA option, but some tried to get around this by allowing MPPP participants the option to have a lower contribution rate. I'm sure I've seen guidance that states this is a no-go, but I cannot find it at the moment.

Traditional money purchase pension plan covers collectively bargained employees. A group would like to allow a back door CODA by allowing participants to make negative elections. For example, the default contribution rate may be $10 per hour worked, but an employee has an annual options to elect to defer only $5 per hour and take the rest as wages. I'm sure I've seen IRS guidance stating a "negative election" of this type is an impermissible CODA, but cannot find it now. Any help or direction would be appreciated.

A self-funded plan is under audit from DOL. The investigator alleges the plan lost grandfathered status a decade ago when switching networks. The rationale is that the schedule of benefits under the old network arrangement offered an incentive for participants to seek care from certain high-quality providers. In other words, the copayment for office visits for certain specialty physicians has always been $30, but under the old network agreement, participants benefitted from a $15 copayment when using certain highly-qualified providers. This program was proprietary and designed to ensure participants were receiving the highest level of care for certain conditions. The incentive program stopped when a network change was made and participants could no longer benefit from a lower copay when using the specialty network. The DOL argues this was a change in cost-sharing that cost the plan its grandfathered status. However, the plan had no access to the specialty program when the network change was made. Any input is appreciated.

Assume an employer did not offer a group health plan, but was interested in purchasing access to a health clinic for its employees and their families. This clinic is not located on the employer's premises, it offers an array of primary care services, and will be shared with other employers. There is an exception to the ACA requirements for "on-site medical clinics," but that term does not appear to have been defined by the regulators or courts. Because of the scope of benefits offered (more than minor injuries/illness or first aid), the location of the services (not on employers premises) and the fact they will available to family members, this will be treated as a group health plan. 29 CFR 2510.3-1(c). It also wouldn't meet the requirements to be avoid COBRA obligations. 26 CFR 54.4980B-2, Q&A 1(d). Many commentators seem to hang their hat on the ACA exception for "on-site medical clinics" to open the door to allow this kind of arrangement, but I'm not sure I see it. Can an employer offer certain essential health benefits through a shared clinic without triggering the ACA rules on caps, preexisting conditions, etc.?

Thanks for the replies. The Plan's QDRO Procedures provide for an 18-month administrative hold period to allow the AP to seek a QDRO. I think the plan is to put the estate on notice that no QDRO has been presented and to give them 18 months to seek an order. It will be interesting to see if they produce a nunc pro tunc QDRO, or just let it go. The only potential alternate payee shown in the original property settlement agreement was the deceased spouse, not any children.

Plan perspective. The Plan has received a divorce decree and property settlement agreement that awards the ex-spouse an interest in the Plan, but the parties did not submit a QDRO. The property settlement agreement will not meet the legal requirements of a QDRO, but the administrator has notice that the parties intended to assign a portion of the participant's benefit.

How do your plans handle the situation in which a divorce decree grants an ex-spouse an interest in retirement benefits, but the ex-spouse dies before a QDRO is filed with the Plan? In this case, the participant is nowhere close to retirement age. It seems the estate should be put on notice and given a time frame to file a posthumous QDRO, but would appreciate thoughts.

Thanks for the input. It turns out that the CBA requires 100% participation and requires a fixed dollar employee contribution per pay period. The employee share is the same regardless of their coverage tier (single, single plus one, family). I don't see any constructive receipt issues. The next argument from the employer is that not all benefits offered by the plan are 213(d) expenses, and therefore the employee contribution cannot be paid pre-tax. My experience has been that the employee/employer contributions are still made on a pre-tax basis, but any taxable benefits (short term disability, etc.) are taxable if/when received.

These employees are collectively bargained. The CBA states that 100% of the employees will participate in the plan. The only choice is between single or family coverage.

Can an employee share of a health insurance premium be handled on a pre-tax basis without a Cafeteria plan? Employees do not have a choice between cash and the health coverage. All must participate and the only benefits offered are covered by 213(d). Thanks in advance.

A collective bargaining agreement calls for a regular hourly contribution to a multiemployer profit-sharing plan. A contributing Employer is having difficulty with employee retention and would like to negotiate a lump-sum payment for each employee. This mandatory payment would be made 90-180 days after the new CBA is signed and only for those actively employed on that date. Are there any issues with this payment? Thanks in advance.

In the past many retirees have used the old W-4P (or home-grown substitute forms) to elect a flat dollar amount, or flat percentage of withholding on their periodic benefit payments. The new Form W-4P allows them to elect an additional withholding, but does not appear to allow the flat dollar or percentage approach. (As an aside, the new W-4P has been very confusing to the retiree population.) Questions: Can an administrator continue to allow participants to modify the W-4P and elect a flat percentage or dollar amount for withholding? I saw an update from Empower suggesting that the flat percentage or dollar approach was not acceptable even with the older W-4P forms and that if participants don't file a new W-4P then they will be converted to the default of single with no adjustments. What is the potential penalty if an administrator insists on allowing a flat dollar or percentage withholding? Thanks in advance.