Effen

Agree w/ CB, but just clarifying that for 415 purposes the controlled group rule is "more than 50%", so I agree that the ownership doesn't look like an issue.

Usually published here: https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates, but not sure why Feb rates aren't there yet? Feb is here: https://www.irs.gov/pub/irs-drop/n-25-17.pdf

Very common strategy. Just make sure you do it before anyone earns a benefit and make sure you get the 204(h) notices out on time.

Are you the participant or the Alternate Payee? I assume you are the Alternate Payee? If so, the Plan Administrator will not pay you without a valid QDRO. If the QDRO was originally rejected and never corrected, then the plan has no authority to pay anything to you. The Plan Administrator is not bound by the divorce decree. There must be a QDRO in order for them to separate the participant's benefit. Generally a plan will have QDRO Procedures that determine what happens in this situation. My experience is they will give the AP a certain amount of time to produce a valid QDRO (like 180 days), if nothing is provided, they will just go ahead and pay the participant the entire benefit. That said, it sounds like the participant isn't requesting anything at this time, so likely nothing will happen until then. Short answer, you will need to retain a lawyer to draft a DRO, which you then submit to the Plan Administrator for approval, making it a QDRO. A life annuity of $140/month starting at 65 is worth about $20,000 based on standard life expectancy. Your call if that is worth the cost to hire a lawyer.

So then what, are you asking about how much of the distribution was really eligible for rollover? Does the plan permit partial distributions? Someone, other than the broker, would have needed to authorize the distribution.

You (or we) are missing something. Is "he" the participant? What "remaining benefits" are you referring to? (Is this a divorce/QDRO question?) "Value" from whose perspective? To answer your question directly, there s/b a relative value disclosure with the election form. That said, typically, the QPSA and QOSA are relatively equal in value from the participant's perspective. However, from the spouses perspective, 75% of something is obviously a bigger number than 50% of something, even though those somethings are slightly different.

I am not positive, but I think for a cash balance plan you use the retirement benefit, except in the year of a full distribution. For that year of a full distribution, you can use the account balance method. Is there a reason why she hasn't receive a full distribution? She could roll into her IRA. I think once it is in her IRA, the RMD's would be based on her age. I don't know if a death benefit in a qualified plan is the same as an inherited IRA. Either way, the answers to the RMD question should be in the plan document.

Once the AP files for their benefits, the OPM will realize their error and likely ask you to repay the potion that was supposed to go to the AP. You already suspect something is wrong, so will be difficult to argue that you didn't know. Maybe they will let you keep the overpayments, maybe they will ask you to pay them back, maybe they will reduce your future payments until they recover them, maybe nothing happens. I suggest you contact the OPM and ask them if they recognized the QDRO. If they say "yes", then you can sleep a little better.

First, I think it is a 45 day advance notice, not a 15 day notice -unless you meet the special criteria. Secondly, I understand what you are suggesting, but I would keep everything prospective. If you can get the notice out by March 1st, accruals are frozen on April 15th. Would be really difficult to work 1000 hours in 3.5 months, so a 2025 accrual is very unlikely. I don't see any reason to make it part of your restatement effective date. Just do it as a separate event.

See duplicate thread for responses.

There is a lot there... " in the Divorce Decree it says in the waiver section, briefly, about 401k's and pensions, that we waive future rights." , "no QDRO was ever created or filed. Nothing about one is written in the divorce decree" "Till he found out this week that I had to sign away my rights", "The union administrator has told him there is a conflict and has viewed our divorce decree and told him it is not enough." My opinion, based on what you said, the union administrator is creating an issue where none exists. I can see them asking for a copy of the divorce decree, but, if as you said, you both waived future rights to each others pensions, that should be the end of it. I don't see any reason why you would need to sign a waiver of anything, because you have no rights to anything. (FWIW, even if you did, the amount would likely be very small since you were only married for a relatively short time.) The administrator is only obligated to review/apply a QDRO when it is presented to them. They are not required to seek it out or enforce the divorce decree. However, if they know a QDRO is forthcoming, they can delay processing for a limited period of time (usually 180 days). Some take that more seriously and ask to see the decree as confirmation that no QDRO is forthcoming. Personally, I think that is overkill, but some lawyers feel differently. Tell your ex-husband to ask the plan for their "QDRO procedures". They will describe how the fund reviews and applies QDROs. I suspect that the administrator is just being excessive at CYA and that in the end, you won't need to sign anything. However, probably good idea to have your attorney review your divorce decree to make sure you really don't have any rights.

I have always included it, but not sure if it is "required". I suppose you could have a actuarial method based on cash and not accrual, but I have never seen it. I assume you are talking about AVA for funding purposes?

Are you looking to purchase annuities for current retirees and/or terminated vested participants in an ongoing plan? That shouldn't be a problem. There are around 15 companies that are purchasing annuities. If this is a small plan (< $10 M) there are around 5 who would be interested. If the plan is in New York state, that could be another problem. PM me and I can see if I can help. My firm does a lot of annuity placements. The plan sponsor can also go directly to the carriers and avoid the crazy commissions brokers charge.

What do you mean "ongoing defined benefit plans"? Are you trying to buy annuities for active participants who are still accruing benefits?

I always apply the coverture fraction first. I assume the participant can choose a different form of payment on the piece that isn't subject to the QDRO.

There are several non-discrimination tests that must be satisfied. 410(b), 401(a)(4), and 401(a)(26) are the big ones. The 40% rule is in 401(a)(26), so yes, you can create a DB plan that only benefits 2 HCEs, but you still need a way to satisfy 410(b), 401(a)(4), and the Top Heavy rules of 416. IOW, you will need a generous DC plan for the NHCEs. I wouldn't recommend creating an HCE only DB plan with a group this small. If/when someone leaves, or they hire a few more people, you will need to add people to the DB. Typical design would be include everyone in DB, give small benefit to NHCEs in DB plan (enough to "benefit"), and use the DC plan to satisfy the other requirements. Also, make sure that no one is "otherwise excludable", which might lower your count.

All determined at the appropriate interest rates used for maximum deductible contributions.

Sorry - I messed these up. I was trying to split Diane's question out from DER's OP and I clearly messed it up. Please try not to start new conversations in existing threads. It make it difficult for people to search in the future. That said, not as difficult as deleting them, so I apologize to DER, but I think they had their answer.

Sorry - I messed these up. I was trying to split Diane's question out from DER's OP and I clearly messed it up. These responses are for Diane. Please try not to start new conversations in existing threads. It make it difficult for people to search in the future. That said, not as difficult as deleting them, so I apologize to DER, but I think they had their answer.

Short of clawing it back, I don't think there is anything you can do to "fix" it, but you could take action to mitigate the issues. Is if possible to make a contribution so that the plan is 110% funded? Would they sign a letter of credit now. You could pressure them to assist with some correction by threating to report is as an improper distribution that was not eligible for rollover.

I like to look for practical solutions...Not sure all the blame goes on the TPA as the plan sponsor apparently chose to ignore it as well, or have they been making contributions? Sounds like you have a signed plan document, but "never implemented" (not sure what that means), never communicated to anyone, never funded, never filed, no 5500, no SPD, no AFN, no bills, no one at the DOL/IRS/PBGC knows it exists, no participants no it exists ,,,seems to me the practical answer is, shred the signed doc, go forth and sin no more, but I would not put that in writing. I think what you can do is only agree to work on a newly adopted plan. You don't want anything to do with the "old" plan as trying to fix it will be a black hole of lost revenue for everyone.

I agree with John - I think switching an active plan from "pro-rata" to "no pro-rata" would be a 411d(6) violation. And, FWIW, I agree with Truphao that I don't understand why the IRS has permitted "no pro-rata" as it is clearly a reduction in the accrued benefit during the year, but I acknowledge they do permit it.

See how friendly actuaries are. ☺️

Did a quick Google search for "Lifetime annuity calculator" and found a bunch of free calculators, including this one on the DOL site. https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/advanced-notices-of-proposed-rulemaking/lifetime-income-calculator Not 417(e), but also not sure the requirements require that you use 417(e) for DC illustrations.

The factor you quote at 67 (.00920) is the probability of dying between age 67 & 68. It is used, along with the probability of death at all future ages, to determine the 417(e) factor. If you knew a friendly actuary, maybe one you shared business with, they might just give you a table of factors based on current 417(e) rates. What is your role in the process? Are you a TPA? I would think most TPA software systems would contain the ability to do this conversion?