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An employee became disabled in March, 2003. While not entitled to Social Security disability, he can no longer work as a pipefitter. The Plan has extended health coverage at no cost to the employee for the past 22 months. This ends in March, 2005. My question is whether this employee would have COBRA election rights in March? He was never given an election form in 2003, but the plan has covered him longer than the 18 month continuation period. Thanks for the input.

A married participant becomes disabled and submits a retirement application in June. (His benefits would have been payable July 1). Fund office sends the benefit election notice to the participant. (Disability benefit is auxiliary, but paid in the form of a QJSA). He dies 3 days after the notice is sent. Trustees would like to give the spouse the 50% QJSA now rather than wait for her to reach his early retirement age. Given the fact that the participant submitted all necessary paperwork besides the election form, it seems the spouse should be entitled to the 50% QJSA. Agree? Any other issues to consider?

Nicole, Check with your carrier on the right to retroactively terminate. A couple of our fully insured multiemployer HW plans have this problem with nonbargained participants. (Coverage is extended before premium is received.) However, the carrier allows the Plan the right to retroactively terminate these folks if the money is not received. In other words, they receive coverage contingent upon payment. If they don't pay, the carrier seeks reimbursement for any bills paid during the applicable period of time...from the provider. The provider then pursues the participant directly.

To be valid, a QDRO must be made pursuant to state domestic relations law...right? In this case where the admin is already questioning the validity of the state order it would seem foolhardy to assume the judge's actions are valid. How would you like to be the admin who thought there may be a problem but didn't send it to legal...

I would think you would need to look to that state's domestic relation laws to ensure the court is not overstepping it's bounds. If the order is valid under the applicable state law, then you would be obligated to honor it.

I am seeking confirmation on the following: Part 1. A DB plan offers a disability benefit to a participant who has not yet attained NRA. This benefit is "auxiliary" meaning the receipt of the disability payments do not affect the participant's right to his vested, accrued benefit at NRA. In other words, the normal retirement benefit will be the same regardless of whether he received a disability benefit or not. As an auxiliary benefit, my understanding is that the plan is not required to make payment in the form of a QJSA. The spouse of the disabled participant is protected by the QPSA rules. Is this correct? Part 2. (Same facts as above except that participant is single when he becomes disabled.) If a single participant marries while receiving an auxiliary disability benefit, the spouse can earn a right to the QPSA or QJSA by being married for 1 year prior to the annuity start date. Is this correct?

Years ago a multiemployer pension fund decided to allow the fund office employees participate in the db plan. None of these employees are highly compensated, nor are they members of the union. A new board would like to discontinue this practice for new hires. What issues does this raise? Can the plan include some and exclude others? Does this cause any testing problems? I would to get a handle on the major issues that need to be examined before starting my research.

There is a 2 volume book entitled "The Developing Labor Law" which does an excellent job of summarizing the relationship between employers, employees, unions and members. This is where I would start. You should be able to find it in any county law library.

Easy there big guy...it was only a question. We do not want to see a forfeiture, but are unsure how the rules work. Under 401(a)(9) and the regs, the timelines for payment are clear. However, the regs make no mention of the case where the plan does not know about the death until years after the deadlines. While the late payment may be a technical defect, what can the plan do? We want to be fair and cover our backsides.

A db plan allows for an unmarried participant to designate a beneficiary to receive a "return of contributions" death benefit in the event he passes away prior to retirement. Participant was inactive but vested and died in 1996. Per the terms of the plan, his son would have received the benefit. HOWEVER, the Plan did not learn of the death until last month...8 years after the fact. The terms of the Plan cite the distribution requirements of 401(a)(9). Pursuant to this section of the Code, a death distribution to a non-spouse must begin no later than 1 year after the death. What does this mean for the beneficiary? Does he forfeit the benefit? Is the Fund allowed to make the payment? Your assistance is appreciated.

There was an AP article in the paper this morning about bankruptcy protection of IRA benefits. I believe the Supreme Court heard arguments yesterday on this issue. The facts involved a person who had $50k in a 401k plan which was protected under the Code. However, after she left her job, she rolled it into an IRA which may not have the same protection. Creditors tried to attach and the mess ended up in Washington.

Assuming all potential beneficiaries ("spouse" and children) were in agreement would you allow them to sign a waiver specifying who is to take the benefit? I know some courts have recognized waivers in divorce decrees so long as they have the elements required in a QDRO. I would prefer this option as it is burdensome and costly to the family to file an interpleader action.

Plan is in Ohio which has banned common law marriage since roughly 1991. A participant dies and his "spouse" seeks a survivor annuity. Unfortunately, she is unable to produce a marriage certificate or other proof they were married. Absent this proof, she is not the person who will be receiving a benefit from the plan. How is this best handled? Do we give her a deadline to produce some proof? Do we file a declaratory judgment action and let the court decide who to pay? It would seem the ball is in her court to go to the county where the marriage allegedly took place and seek the proof the plan needs. However, we do not want to end up paying the benefit twice. Input is appreciated.

The packet of information with the QJSA election material, the explanation of the optional forms of benefits, etc. Given to the person shortly before their retirement.

Does anyone know a link to checklist of the information which must be contained and disclosed in a retirement packet for a DB plan? We are in the process of reviewing our material and want to be sure it is up to speed. Thanks.

Most all of our DC plans allow for the 6 month partial distribution with the caveat that no contributions can have been received to the DC, DB, or HW funds.

My big concern is the adverse selection problem mentioned earlier. When you make a selection at retirement, you are asked to make an educated guess as to which form of benefit best meets your needs. The terminal illness situation described above pinpoints exactly why this change should not be accepted by the plan.

Married participant retires and elects the 50% QJSA. A year later he and his wife are divorced. She is willing to submit a QDRO waiving any survivorship interest in the plan. Goal is to get his monthly benefit bumped up by switching to a single life annuity. Our procedures don't allow for this waiver, and I know the order cannot require the plan to take this action. My question is whether the plan has the OPTION to allow such a switch. From the administrator's point of view, the 2 forms of benefit are actuarially equivalent. May a plan allow this?

Absent a trust and joint board of trustees, you look to have an LMRA problem. I would recommend you look at the instructions to the 5500 form. I know that a Union which provides health benefits out of it's general assets generally does not need to file a 5500. When the payments are negotiated and being held for the benefit of the members, it would seem a 5500 would be in order.

We came across a PBGC Opinion letter from 1981 which indicated just what you wrote: No liability at the point of sale unless the company resumes covered employment in the jurisdiction of the local union in 5 years.

Account balances for active participants/retirees will be rolled over from year to year. I am talking about those who leave the trade and still have small balances in their HRA. We don't want to keep records year after year.

Our investment consultant is working on this problem for several clients. We also have the low price fund as an investment option within a self directed DC plan. The trustees are trying to decide whether to force all existing participants to liquidate this option. We would like to avoid a situation in which the investment options vary from participant to participant simply because Fidelity uses a "hard" close on certain funds. My understanding is that Fidelity is taking heat for this decision...I don't know whether they will reconsider.

We are in the process of developing an HRA for a union health plan. It is going to be offered to all participants eligible for coverage under the major medical portion of the plan. This is a construction industry plan, which means that the number of eligible participants can significantly vary from month to month or season to season. The question is whether there is any legal requirement to keep the account balance active for a certain period of time after the participant terminates coverage. As of now, the proposal is to provide for a forfeiture of the account at the end of first quarter following the plan year in which the termination occurred. Any problems with this approach?

The order is stamped and signed by the judge. It is not necessarily directed at the plan, but does say that the wife is to be treated as a spouse for purposes of health coverage. I believe this order has to be preempted. How can a state court dictate rules of coverage that vary from the plan?

A self insured ERISA plan received an order from the local domestic relations court which requires it to cover a legally separated spouse as a dependent for purposes of eligibility. No minor children are involved. The plan says legal separation is a COBRA event. Can the court trump the plan language? My belief is that the state order would be preempted and we should send the participant a COBRA notice. Any thoughts?