MoJo

With one caveat - if your ex named you as the beneficiary of his benefits, then you may be entitled as beneficiary, and not as alternate payee. Money is money. Check all avenues. As Bill said - contact the benefits people at his former employer.

Last I saw (and I have no cite) the DOL specifically did not weigh in on the battle between passive and active investments - except to indicate that the fees charged for active management need to be evaluated in light of the potential return (presumably in excess of index funds). Bottom line - it's a "fiduciary function" and that means have a prudent process. If so, the DOL shouldn't second guess the decision.

I haven't done one since the online filing requirement - but in the past, when we've done them, we've used outside counsel - and they wrote the check. I would assume that if we do another, we'd provide them with the funds and they would use their "corporate credit card" to facilitate the filing.

The fundamental issue here is that a minor is DEEMED to be incompetent for no other reason than being under age. PERIOD. There are exceptions - but in most cases, a court has to intervene (especially in the health care area (and again, there are exceptions) for a minor to receive care. Indeed, it was only a few months ago that an 18 year old testified before Congress that he had to WAIT UNTIL HE WAS 18 in order to receive vaccines - because he his parents were anti-vaxxers" who would not consent. The ""incapacity" is LEGAL - and actual competence is irrelevant.

The same would be true with respect to a 16 YEAR old - as in the eyes of the law, the 16 year old and the 18 month old are both legally "incompetent."

ERISA does not control the employment relationship, nor the capacity of one to make financial decisions. A federal court wouldn't say otherwise.

Permission to be an "employee" doesn't equate to permission to make decisions about participation in a benefit plan. There is a difference. "Working papers" set conditions for the type of labor, hours,etc - but nothing beyond the four corners of the authorization. It isn't "open ended." ERISA has nothing to do with it. ERISA only preempts when inconsistent with state law. Nothing inconsistent here.

No. My research was specific to the jurisdiction in which I'm licensed to practice - and was paid for by a client. I don't need a "ruling" from the State Department of Labor. It's actually a Probate Court matter - which is where capacity of a minor, and the roles/responsibilities of guardians are assigned/determined. Keep in mind that ERISA only preempts that which is inconsistent with it. The incapacity of a minor to entering into legally binding relationships is not inconsistent with ERISA. Maybe parallel to part so fit, but not inconsistent.

Uh huh. Well this "Bozo" is an attorney, and has done the research. No guardian signature, no deferral. Rarely happens, though. Virtually all plans we are involved with have at least an age 18 criteria - if not 21. If someone wants to do it - it's because "Junior" has a cushy job (marketing - attaching the kids to the promos), and if they are making enough to actually make it worth while deferring, would have vetted it first....

If you want to take the risk. Go for it. I'll always require a "legal" guardian to make the election. Interestingly enough, yes, UNDER CERTAIN CONDITIONS a minor can enter into an employment contract - but the difference is, they only get paid for performance. If the minor repudiates the contract - their is nothing to do to remedy the situation (as the labor can't be given back). Big difference.... And by the way, many states have "specialty" law concerning children in the workforce. The most significant example is CA - with respect to child performers. My advice stands - get an attorney.....

I couldn't disagree more with that statement. In general a minor is LEGALLY incapable of entering into a contract of any sort, and one who does enter into a contract with a minor does so at their own peril. The "classic" case is a car dealer who sells a minor a car, who then proceeds to total the car - and then the minor repudiates the contract due to minor "incapacity." The car dealer (absent other issues) would have to give the kid their money back. PERIOD. A case like that is in every law school "Contracts" book. I think a plan sponsor should be very very concerned with a minor making an election. The minor could repudiate that - requiring the empoyer to give the kid their money back - BUT MAY NOT NECESSARILY HAVE AN ERISA "REASON" FOR TAKING THE MONEY OUT OF THE PLAN. Get an attorney - check out state law on minor capacity, and be very very cautious.

I would think whoever has authority over the minor's estate ("guardian of the estate") could, and would have to, make such decisions on behalf of the child. State law would tell you whether a parent (without further authorization from a court) acts in that capacity....

We've actually seen a lot of interest in this approach - and yes, the BIG drawback is the ACP testing failure. BUT, if the numbers work, then it can be a viable solution for participants who have outside assets into the plan, and then converted to Roth so that future growth is tax FREE. But, it is a numbers game. We have one LARGE law firm doing this - where 1) all of the Associated make in excess of the HCE dollar limit; 2) NONE of the employer contributions go to Associates (i.e. - typical lawfirm 2 plans set-up with a Partner & Staff plan where employer contributions are made and a separate deferral plan for Associates only); and 3) the employer makes the "top paid group" election to limit the number of HCEs - resulting in all of the associates being NHCEs (despite making obscene amounts of money). The "Mega-Roth" feature is limited to use ONLY by NHCEs - which gives the Associates, and staff the opportunity to convert outside assets into tax FREE growth. Works for them. But it requires a situation like that to avoid the ACP issues.....

Relius and ASC. We use them both. Recommend? Well, depends on what you are looking for.

The question you ask is one we have been struggling with a bit more broadly: If a participating employer does not execute a participation agreement (where the plan says controlled group member do *not* participate until they do), can that be "self-corrected" under the new EPCRS rules? Wagner law group (Marcia's team) has said "yes" under the theory that you have always been able to retroactively amend a plan to include those who have been participating (although, that "fix" allows you to include "otherweise eligibles" troactively - and given our document says they *aren't* eligible unless... I'm not sure it would work for us). Ferenczy law (Ilene's team) says no - it is akin to originally adompting a plan - which requires a "document" *before* participation begins. Any thoughts? I think the answer to your question is - "possibly" through a VCP filing - and we have done that several ties - even when the participating employer had many HCEs (although, you never know since you are dealing with "partners" (presumably HCEs) entirely)

It depends on what the POA says, and what the state law of the state in which he was resident when signing says. A POA is a complex legal document - and should be reviewed by counsel....

Tom: First, "you can check out any time you want, but you may never leave..." Second, this does not absolve you of responsibility to return with your "Christmas Song" puzzle....

I guess I'd look at it a bit differently, then. The fiduciary breach is just that - a fiduciary breach. With respect to the failure to follow the document is a "qualification" issue under the IRC - I would suggest it "depends" (I am an attorney...) on what provisions were not followed. For example, a plan document may provide for an appeal period for a denial of benefits, and if the plan sponsor doesn't follow that provision and ignores that provision in the plan, it is a violation of the terms of the plan document, but it is NOT a qualification issue (nothing in 401(a)(1) et swq.) indicates you must make follow that provision. You may have other issues (ERISA (non-qualification) rules, the fiduciary breach, a "quasi-employment" contract issue, possible an equitable issue) that might force you to correct the situation, but absent a violation of 401(a)(1) et seq., it isn't a qualification issue. It would still be an "operational" issue, but not necessarily a "qualification" issue. If however you violate a term of the plan documents that is REQUIRED by the qualification rules in 401(a) (coverage, the (k) and (m) rules, etc.), then your violation of that particular provision is a "direct" violation of the qualification rules - and you can be held accountable for that. The fact that you also violated the terms of the plan isn't relevant to the "operational" failure causing a qualification issue - which would have to be addressed. In any event, our advice to clients is "R.T.F.D." (Read The ... final ... Document) - and understand it).

I don't know about a cite to IRC provisions or regs, but ERISA clearly makes following the plan documents one of the four fundamental "fiduciary" obligations (along with the exclusive benefit rule, the prudent expert rule,and the duty to diversify) in Section 404 (29 U.S.C. Section 1104). Failure to incorporate all of the provisions required for qualification in the plan document then would make it deficient in "form." Failure to abide by it's terms would be a fiduciary failure directly, perhaps indirectly (as a failure of the prudent expert rule - which implicitly (arguably) requires one to preserve the tax qualified status of the plan (as any "prudent expert" would). Hence, "operationally" a failure would be violative of these "fiduciary requirements" and otherwise a bad thing.... Not sure you need a cite to anything else....

It takes however long it takes. We've gotten compliance statements in as little as 6 months from filing, and some as long as 19 months. Our "policy" is to never ever "poke the bear." It seems as though every time we do so, we get rewarded with a lot of angst in that the "initial" review is negative - requiring a lot of fire drill work to recover. Let sleeping bears lie....

I suppose it depends on the type of contribution it is classified as. As a pass-through entity, with "deferrals" being "electable" prior to the end of the year (which, of course he did - if this is the path to be taken), then refunding it would be the correction. If it is employer contributions, it's a forfeiture.... What's the history as to the nature of contributions made previously?

Could it be as simple as - if he had no comp, his 415 limit was zero - and as a 415 problem, it needs to be corrected....presumably by removing it from the plan.

We've looked into this as well and have come to the conclusion that the only downside to not paying the tax is the inability to use the state courts to enforce the obligation. OK, well, so what? The loan is properly secured at the time of it's issuance by using the participant's account balance to fund the loan and the appropriate means of enforcing the loan should the participant default is to simply deem a distribution, and at the appropriate time, offset the loan. No court intervention needed. We "advise" about the tax stamp obligation (or at least we're supposed to), and let the plan sponsor decide what to do (or not do).

ALL HAIL RatherBeGolfing! Thank you!

"Intern"? "Staff"? What are these things you all speak of?