MoJo

ESOP Guy: I would suggest you are not the typical 401(k) participant.... Consider that a complement. The "average" wouldn't have a clue about what you are talking about, and for every participant like you, I could point to dozens who misused the brokerage window trying to hit grand-slams at the expense of retirement security. When I worked for Schwab, the largest holding in brokerage accounts in retirement plans was cash - about 30% - and that was at money market rates when the plan actually had a SVF paying 30 or 40 TIMES the rate on cash. In addition, across the book of business, brokerage account participants UNDERPERFORMED non-brokerage account participants by 200 basis points (2%!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!)

We always hear the stories about the grand slam investment, but rarely do we hear the stories about the strikeouts (of which their are many, many more). One might questions that if you have to put limits on investments in a brokerage window, is a brokerage window an appropriate mechanism for investment of plan assets?.... Food for thought....

First, you can file an action in an appropriate domestic relations court to enforce the terms of the UK divorce decree - including splitting the pension benefits. Second, "finding a relevant US court" is really one of venue and jurisdiction. Could be in the place of your last residence in the US, or the place of domicile for the pension plan (company headquarters). I'm with Belgarath - find an attorney....

Yes, (to the extent the plan sponsor is a fiduciary) on both counts. I've seen no exception to the fiduciary rules that would allow a plan sponsor to punt on brokerage window fees. Keep in mind that the assets belong to the trust - not the participant (who has a beneficial interest in those assets subject to certain conditions (vesting, distributeable events, etc.). The plan fiduciaries have an obligation with respect to all of the assets of the trust - including those held in brokerage windows. Now if you really want an interesting discussion, posit the question of whether or not plan fiduciaries have an obligation to monitor the investments held in those brokerage windows....

Exactly!

A clear demonstration of the failure of the School of Experiences. Sgt. Pepper is to Rock and Roll what anything Mozart composed is to Classical. Somethings are timeless. Those who are ignorant of them must be in some sort of (sound and culture proof) bubble. Sgt. Pepper is my most played iPod (classic, 160gb version - which itself is an "oldie") album. AND(!!!!) for Christmas my fiance bought me a new turntable - and the day after I went out and bought a remastered SGT. PEPPER LP..... Bliss. Pure bliss....

The "reason" for the expense is easy - got a medical bill, you have a "hardship" reason by definition. You still can't ever give out more than is required to satisfy the need, and that is where the issues arise with "funky" documentation.

Yes, but.... Suppose the documentation is dated 11/1/2016 and the hardship request comes in 4/1/2017? Or 6/1/2017? Or later? I've seen hardship request come in years after they were incurred (denied, mostly as a sham to get an early distribution). Now, someone has a determination to make. In the scenario I recently experienced, the participant was one of the top 5 dogs at the company, and the invoices had a "paid" date 5 months before the request. Based on his salary (we looked), he earned many times more than the admittedly large medical bills during that time frame. Does it matter? Not my call. The bottom line is we "rejected" it as not appropriate for our "hardship determination" outsourcing services simply because it didn't fit our "checklist" which required "documentation" that clearly spelled out the amount of the "need" (no way to determine if they were all marked "paid."). In that scenario, it's up to the plan sponsor (who wasn't happy that the process wasn't "automatic" and that we had to get them involved), but we (as a service provider) are limited in the authority we have (and the information we get), and it required plan sponsor involvement. Just a challenge. That's all I'm saying.....

Interesting. I've recently looked at this issue (to document the "need" the participant submitted medical bills - ALL OF WHICH were marked "PAID IN FULL" with a balance due of zero. The problem with applying what you have above is that it REQUIRES a plan sponsor or service provider ro look beyond the four corners of the documentation to ascertain whether or not an immediate and heavy need exists. Who wants to look at the family budget to determine that by paying the medical bills first their is a hardship created in the inability to continue paying ordinary expenses going forward? How are we to determine that the participant didn't just have some extra cash laying around to pay the medical bills and now wants a hardship to provide cash for a trip to Disney? I think the IRS' response, while generous, actually creates more questions that we as a service provider and plan sponsors would not like to have to answer. Despite the "bills" being for allowable medical expenses, there STILL has to be some semblance of a "need" demonstrated (and yes, I know the safe harbor definition *only* requires a covered reason and no alternatives from the "plans" of the sponsor).

Just my two cents here. "Plan design" is not something you can sit down and learn "a to z." Plans are designed based on client needs and their (perceived) needs of their employees, consistent with legal and cost constraints. It isn't "book learning" at all. It takes a keen analytical mind and the ability to separate client "wants" from client "needs" consistent with the law - and that takes experience in the industry. I would say that typically plans are 95% the same as every other plan, but it's the 5% that is truly crucial. I would also add that based on a variety of factors, plan design includes proposing multiple plan (DC, DB, cash balance, a variety of non-qualified "Top Hat" plans) safe harbor vs. non-safe harbor, cross tested, etc. that cause the permutations (despite the legal and regulatory constraints) to be enormous. I agree with hr for me - latch on to an exist TPA and learn, and possibly buy them out (or possibly offer certain services to them so they can "out source" overflow while you learn). Better yet - hire someone with experience to get you started while you learn.

The thing to keep in mind here is that the performance measurement that is important to the fiduciaries of the ERISA plan is *your* performance in managing the models - NOT necessarily the performance of the underlying individual investments. What your firm decides to include or not include in the model portfolio is key - because it is your firm who is being paid to manage those models....

Yes, there is always a chance you will miss dial - but the chance that you will misdial and connect to a fax machine is pretty slim.....

I've had agents demand a fax. I tell them we don't have that capability (except through efax services - which essentially is the same as emailing) and that our secure portal is more secure. They usually back down - but that requires a secure email system of some sort. As a service provider - we prefer email delivery of some things (we have a portal for major data uploads) so we use a vendor to provide a secure portal for anything with SSN's or other non-discloseable info. Just another "cost" of doing business....

I would be leary of an actual investment in Bitcoins - being that fulfilling the part about being subject to the jurisdiction of U.S. Courts would be difficult to achieve (where exactly are "virtual" currencies held?) But the OTC traded trust fits the "ERISA requirement - so, why not (other than it's speculative, not regulated nor consistently priced, speculative, fairly new without a track record, or really even a track, speculative, and generally "speculative" (did I mention that before). And one should not construe any of the above as "investment" advice because 1) I don't give investment advice; and 2) I don't consider crap shoots as an investment....

If it isn't available, then obviously it can't be obtained. I never said it was available in *all* states - just that it was an alternative to a divorce. Doesn't alter the analysis. Still a "legal" separation (where available) does suffice - and in Ohio, one can obtain a "legal" separation that enforces a separation agreement (settling all property and custody issues) without getting a divorce. It actually happens all the time for estate planning purposes and obtaining Medicaid for a spouse needing nursing home care. I've actually used it for the purpose laid out in the OP. So, I'm not sure the "nit picking" here. Use what is actually available in your jurisdiction....

Hence the use of the term "legal" separation - which requires such a court order....

I think you are out of luck with the one in prison - whereabouts are "known" and apparently won't be changing for 20 to life (just kidding - but uncooperative doesn't mean not findable). They may want to file for divorce or at least a legal separation to resolve that (and other) issues. As far as the other one - well, I would suggest attempting to find them. If they have any information about the whereabouts of the spouse, I don't think you can credibly claim they can't be found. Again, a domestic relations proceeding is in order. If you can't reasonably find them, some jurisdiction will allow, under some circumstances, that they be "served" with the divorce papers via "publication" in a newspaper of general circulation in the area of last known residence.

Uh, a "cynical ranting mood" seems to be the new normal. You are in good company.

While at first blush, your "idea" sounds compelling - but I question: "where does the expertise come from if you limit elected officials to one term? How does one develop relationship that allow for compromise that actually get's things done, as opposed to being able to "stand firm" ideologically when you have no opportunity to be re-elected?" Getting back to the OP - the problem is budgets are scored on a 10 year time frame - even though much of government is funded through a variety of debt instruments extending out to 30 years (and even beyond). Time to reform the budget process and metrics to look out for a "lifetime" and determine the longer term effects of policy. The problem is, when you measure to a 10 year metric, you adopt a mindset of "the next group will fix it, so it really doesn't matter now."

Hallelujah!!!!!

Nobody is doubting the logic of the idea - just the efficacy of spending oxygen on getting it done.... What we really need (dare I say!) is real retirement plan reform that actually works towards a retirement income, rather than throwing obstacles in the way....

First, learn what "tongue in cheek" means, then re-read my post with that knowledge. Second, considering legislation that potentially kicks the "poorest" American's off health insurance (and consequently actual health care) just made it through the House, I dispute your contention that CongressCritters care at all about the "poorest." Third, they did it before (TRA86 that cut the 402(g) limit by, what, 80%?). Fourth, you apparently have more of those funny cigarettes, if you think ANYTHING bi-partisan is going to pass in the foreseeable future (and it really hasn't in the past 8-1/2 years) Fifth, your "$40k" loan scenario is probably just another reason why plan loans are a bad idea. One never knows anymore when one's job is going to be eliminated without warning. It's happened to me (and thankfully, I heed my own advice that "Loans... EVIL!"

Hmmmm. OK. Congress is currently trying figure out how to get $2.3 TRILLION dollars over next year, since the AHCA (which they counted on for $1 TRILLION of that) isn't going to save anything EVEN IF IT GETS PASSED), and the "Border Adjustment Tax ("Make Mexico Pay for the Wall") is a non-starter in either party. There is talk of reducing the 402(g) limit, allowing only half of the 402(g) limit to be pre-tax with the remainder being Roth. They are talking about eliminating any NEW pre-tax IRAs, and eliminating any new pre-tax CONTRIBUTIONS to existing IRAs (Groom law called it the "Rothification" of the system at a conference I was at earlier this week). And you think your Senator is going to propose PRESERVING a "tax expenditure" by allowing fewer loans to go into TAXABLE default? Pass that funny looking cigarette this way, please....

As time goes by, and with more fee transparency, what the advisor is paid is less and less relevant to what the recordkeeper is paid. If there isn't enough from "rev share" to pay both, hit the account balances. It's up to the plan sponsor to determine if the fee paid to the advisor (whether based on the loan balances or not) is reasonable. And yes, I've been with recordkeepers who have, at the direction of a plan fiduciary, done this. Loans are in fact part of the plan balances....

I posted a similar example as "proof" above as well.