Effen

"Would this come from the company and/or any additional waiver for each of the three partners, as the remaining participants can not be affected." That is correct. Again, not sure if this is a PBGC covered plan. If it is PBGC covered, than you are defiantly correct. The non-substantial owners must receive their entire benefit. If it is not covered by PBGC, the plan probably has language about prorating the benefits based on available assets. Not very popular, and typically the partners take the hit, but if it is not covered by the PBGC, it is possible to spread the shortfall among all participants. "How does one defer the decision to take the annuity when he must do "something" with the benefit that is due? Or is he buying an annuity that promises the payment at his NRD?" That is basically correct, except the plan is buying the annuity, not "he". The participant is NOT required to "do something" until NRD, and even then he could defer until MRD, and even then if he continues to do nothing the plan should just commence the QJSA. The plan's termination can't take away any existing options. The participant isn't even permitted to make an election more than 180 days prior to the commencement date, so legally, they aren't permitted to elect a payment date more than 180 days in the future. Their option is to elect an immediate payment (lump sum or annuity), or to defer their election to a later date, when the same options must be available. Yes, the annuity you purchase must provide all available options. Recognizing, sometimes this isn't possible because there is no market, so you do the best you can, with guidance from the Plan's ERISA attorney.

"Let's assume a worst case scenario - a participant elects the annuity of "x", which equates to the lump sum." - it won't. The annuity will likely be 15%-30% more than the cash balance account value. "The annuity could cost more or less than the actuarial equivalent." Not "could", but "would" "At that point the plan would either pay more or less than they would have if the participant had elected the lump sum." Not an option. The Plan would need to provide the benefit required by the plan document. If that is an annuity, and it costs more than the cash balance account value, the plan still must provide it. "I assume no one should be paid until. ALL election forms received and the owners waive at that time." True Dat! "Who then is the owner of the annuity"" The participant will own the annuity contract "and is this an immediate or deferred annuity" Depends on the situation. If the participant wants an immediate annuity, it will be an immediate. If they are choosing not to make an election then it is a deferred annuity. Note, they aren't electing a deferred annuity, they are electing to defer their decision. The contract you purchase still must include the option for a lump sum and the interest crediting rate stipulated by the document. This may be very difficult to find, which is why Mike P just responded with a simple "plays havoc". It can be very difficult to find a carrier willing to provide this annuity. Is this a PBGC covered plan? If so, you may have additional issues to deal with.

This is really an interesting question. I thought it would be a simple answer, but after digging, I don't see any real definition of Normal Retirement Date in any regulations. Yes, it is most common to say the NRD is the first of the month following NRA, but I did see something in the Pension Distribution Answer Book that said first day of the plan year following NRA was acceptable. Regardless of the relationship between NRA and NRD, RR 81-211 is clear that the participant must be 100% vested as of NRA. The 411 Regs also require a suspension of benefits notice or an actuarial increase if a participants benefits are delayed beyond Normal Retirement Age, therefore, in your situation, if benefits aren't paid until NRD, you might need to provide a suspension of benefits notice or an actuarial increase. I would definitely talk to the person who drafted the document and get their opinion.

Yep, all good questions that the QDRO should address.

I don't know, but I would think the AP would have the same rights to the annuity stream as they had for the lump sum. I doubt there is anything the spouse can do to stop the Participant from making a valid election. Once the annuity is in pay status, it likely can't be changed back to a lump sum if the two later get divorced. However, you scenario implies a QDRO already exists that provides for a lump sum to the AP. In that case, the P can't do something in violation of the QDRO, and the Plan Administrator shouldn't allow the optional form of payment to be elected. Just like in a DB plan when the participant wants a lump sum but they can't have it because a QDRO requires an annuity payment.

Yes, 401(a)(26) will apply, but there is an exemption for plans that benefit only NHCEs. In other words, if you freeze the accruals for HCEs, not just participation, you would be exempt from (a)(26) going forward.

Come on. Seriously? What is the point of Plan B if Plan A is already funding a benefit at the 415 limit? What is the saying...pigs get fat, hogs get slaughtered. If the client cares more about deductions than they do actually being able to get money out of the plan, maybe Old Ned Ryerson has a 412(e) plan for them.

Sounds like you have a good handle on it. I have no issues with anything you said. Keep in mind that even though the numbers may not be significant to a small closely held company swimming in cash, if/when that company is sold, they may become very important, so you want to be able to defend whatever you use. Keep in mind that outsiders may read your disclosures and you have an obligation not to mislead them. Also, take a look at the new exposure draft of ASOP 4 released today. In your specific example, we know the curve dropped about 100bps during 2019. If 4.50% was ok at 12/31/18, I would be looking for something less than 3.50% as of 12/31/19. Not sure how you could reasonably justify 4.0%. You are allowed to use 4.0%, but need to state that you don't think it is reasonable. That may be ok, if the numbers really don't matter. If they argue about putting in the disclaimer, than you can counter with, "well, i guess these numbers do matter to someone". Also, don't forget about all the other assumptions. Is your mortality assumption reasonable and does it include improvement?

Again, the answer to everything is in the signed benefit election form. You need to get a copy from the Plan Administrator. If you are the executor of the estate, ask for a copy on behalf of the estate. I would think you have a right to see it, and they have to provide it to you. If they were divorced before the benefit commenced, then the ex-spouse is not relevant. She was not married at the time the benefit commenced, so no QJSA (that provided spousal coverage - see David's post) would apply. No, the ex-spouse would not be a "default beneficiary". The only way the ex-spouse would be considered to be the beneficiary of a QJSA is if one, or both, of your parents committed fraud. You need to see the signed election. It will provide the answer.

You really need to see the beneficiary election page to know for sure. We know she elected a J&100% Survivor annuity, but we really don't know who she elected as beneficiary. When she elected her form of payment she would have declared if she was married, or not. Because of your age relative to hers, taking a J&100 with you as beneficiary would have been a significant reduction in the amount of the monthly payment. I know you said this plan permitted non-spousal beneficiaries, most plans do not. I think your best option is to have an attorney write a letter to the plan on behalf of the estate, asking to see a copy of her benefit election form. That will provide all of the answers. If she was divorced prior to her election, it should not have been relevant. Now, if for some reason she wanted to hide the fact she was divorced , and she completed the paperwork as if she was married, that would be fraud and yes, would be a big mess.

If he is the ex-spouse, and there is no QDRO, he has no rights to her pension. Can you look at her benefit election form and tell me specifically, what form of payment did she elect? She probably had options - life annuity, life annuity with 10 years guaranteed, Joint and 50% Survivor, Joint & 100% Survivor, etc. Specifically, what did she elect. If you have a signed benefit election form, electing a Joint and x% survivor benefit, with you named as a beneficiary, I assume that form is notarized or witnessed by a plan representative? If you have that, and the plan sponsor should have no reason to deny your claim. If they are denying your claim, you have the right to a formal appeal. If you send them a letter stating that you are appealing their decision based on the election form in your possession. If that doesn't work, you might need to hire a lawyer. Once a benefit is in payment status, you cannot change the beneficiary. Therefore, there is no way her ex-husband could have had it changed if you were the original beneficiary.

You said a few things that don't really fit together. You mentioned she took a "QJSA", which is a Qualified Joint and Survivor Annuity". However, you said she wasn't married at the time of her retirement in 2011. By definition, the QJSA is for spousal coverage. If there is no spouse, then QJSA is a life annuity w/ no survivor benefits. Therefore, it is very possible that your mother was not permitted to designate you as her beneficiary under the terms of the plan. However, that doesn't seem to fit with the plan implying there was a beneficiary, but it wasn't you. A plan can permit a non-spousal beneficiary, but it isn't common. And if it did allow for a non-spousal beneficiary, your mom would have had to designate that person. Assuming you are the executor of the estate, you should ask for a copy of her signed benefit election form from 2011. That would likely provide all the information you need to determine what form of payment she elected, and who the beneficiary is, if anyone. If she was divorced at the time of retirement, and there was no QDRO assigning a portion of her benefit to her ex spouse, the ex-spouse should have no impact on any of this.

PBGC has lots of money and staff and it often feels like they are just looking for things to keep busy. That said, they are looking for proof that the company has the money to make the contributions in the future. They may be overzealous, but they have the authority to make things very difficult for the sponsor if they don't cooperate. They probably want to see if the company really doesn't have the cash, or did they siphon off the cash as compensation or bonuses. In other words, they want to see where the cash is going if it isn't going into the plan. I would recommend that you work to appease the PBGC, if possible. If the client doesn't want to provide tax forms, ask the PBGC what other types of documentation they would accept.

Thank you. You said "the plan was in pay status". Does that mean: 1) you were receiving monthly benefits when the PA was notified that a DRO was coming 2) Once they were notified, they froze your monthly payments. 3) Your payments have been frozen for over 3 years waiting for the DRO to get finalized? I agree with David. Most QDRO procedures have a time limit (6 -12 months) to finalize the DRO. If the DRO isn't finalized, benefits should recommence until it is finalized, but at that point it would only impact future payments. Ask the PA for a copy of the DRO procedures, then contact an attorney to get things rolling. Why hasn't the DRO been finalized? You should also be pushing to get that done.

My point is that we, the contributors of this board, can't honestly asses what happened and therefore we can't really help you until we know more facts. We know your opinion is everything is black/white and the court just needs to enforce it. However, as many of us have pointed out, you may, or may not, have the wrong understanding of what the QDRO was supposed to provide. Therefore, until we can see the actual wording in the QDRO, it is hard for us to tell you who was right and who was wrong. If you are correct, and you are entitled to a benefit under the QDRO, you should file a formal written request for payment with the Plan Administrator. This is something that should be a written letter, referencing your benefits under the QDRO. It would be better if this comes from your attorney. The letter should ask them to respond in writing. If they deny your claim, they will need to provide explanation. If you are still unsatisfied, you can formally appeal that decision, by providing the basis of your appeal. If they deny that, your next step is to file suit against the Plan Administrator. You may already be beyond the formal request and appeal, but the only way you will get satisfaction is by working with an attorney.

What does the Plan Administrator say is the reason you don't have access? Yes, once the PA knows a QDRO is coming it is fairly common to freeze the account to prohibit the participant from taking money that belongs to the Alternate Payee. If it has been 3 years, has the QDRO been finalized? If so, there should be no reason for you to not be able to access your piece of the account.

Qwerty - as the posters said in this chain and the previous chain you started, we really can't help you without seeing the QDRO and knowing facts, and many of those facts you should not share on this board. Also, this is a very complex topic and no one can simply tell you how to get your QDRO enforced. It is a legal document and ultimately you will need to hire an attorney, and maybe an actuary, to help you get this resolved. No one on this board can really help until they see the actual QDRO. If you let us know what part of PA you are from, we may be able to recommend an attorney in your area who can help.

Is this a sole proprietor or a corporation? What defines "start date"? In other words, did he leave a prior job and start a new company on 11/1, or was he always doing his thing and just incorporated on 11/1?

Many unknowns here, so it is hard to tell what happened. One thing you said peaked my interest, you said, "I did receive my 50 percent share in 2013, while he was alive". Did you mean, you received 50% of his benefit from 2013 while he was alive, then it stopped when he died? Can you tell if your QDRO was a "separate interest" or "shared interest". Does it state that you will receive a portion of his benefit, or does it say that the portion of his benefit assigned to you will be converted to an annuity payable over your lifetime? In other words, were you just receiving a portion of his benefit (shared interest), or were you supposed to receive your own life annuity, independent of his elections (separate interest). What you described sounds like a shared interest QDRO. Did it explicitly state that he was required to elect a Joint and Survivorship annuity on the piece that was assigned to you? Without seeing the QDRO it is hard to determine if anything was wrong. It is possible the administrator screwed up, but it is also possible your attorney screwed up when they drafted the QDRO. Don't let the PA tell you it was your ex's fault. It is the PA's responsibility to ensure the terms of the QDRO are followed. The fault is either with the PA, or your attorney, but likely not your ex.

I think you would just show the funding deficiency. If the plan was terminated before YE, then no additional SB is required. You could report on the 5330 that the payment has been made. The "audit risk" is in the reported funded deficiency. If they audit, that is when you would show them it was paid. I think some people just pay the 10% excise tax, and never actually correct the deficiency. If you don't have the cash, terminating the plan allows you to walk away from the final contribution for 10 cents on the dollar.

Good question...there is no less restrictive position for collectively bargained plans that I am aware of. Generally, if a person has no contributions for 6 - 12 months, that means they are not working for any contributing employers, or at least in a capacity that requires a contribution. It is possible that the person moved into a different job class that would not require a contribution - say from union to management. In that situation, I agree that the distribution might be a problem. I think it would be prudent to confirm the participant is no longer working for a contributing employer before the distribution is paid.

A few small comments on David's response: I would say, on the death of the Participant a survivor annuity MAY BECOME payable to the Alternate Payee. I have seen "shared interest" QDROs written that the AP receives no death benefits and all of the death benefit is paid to the current spouse. In other words, the AP doesn't always receive the death benefit, but it depends on how the QDRO is written. Also, since you said your husband was a police officer, it is also possible that the plan's QDRO procedures, or state/municipality are not permitted to accept a separate interest QDRO. Generally, the administrator should have no opinion, so my first flag is when you said, This is not something the PA should not be in a position to change, unless there is some statutory reason why a separate interest isn't permitted, which might be possible with a police plan. Either way, they can't just change it, but would need to document why that was an issue.

This board is for "Multiemployer" plans, not "Multiple Employer" plans. You might get better responses in the Retirement General, or one of the Defined Contribution Plan oriented boards - I am moving it to the 401(k) Board.

This board is for "Multiemployer" plans, not "Multiple Employer" plans. You might get better responses in the Retirement Plans General, or one of the Defined Contribution oriented boards. I am moving this to the 401(k) Board

Brentwood Asset Advisors is also a good source. October Three may also be able to help. May not need an RFP, but you should talk to more than one. That said, did you really mean 390 participants and only $2 million of assets? That averages just over $5,000 per participant? Seems very low. You can also go directly to the insurance company on behalf of the sponsor. If you really only have $2 million, I would start with Mutual of Omaha, Pacific Life, & CUNA Mutual.