Effen

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?

If you have access, check out Session 301 Advanced 415 Limits from the 2013 EA meeting, specifically slides 39-61. There is a good discussion and several examples that might help. It's not a simple answer.

It would be helpful if you could just tell us what happened. The plan document generally trumps the SPD and administrative forms. Sometimes things are statutory which would trump everything.

Sounds like your "company" has a controlled group issue or a coverage issue. Maybe the owners created a DB plan to fund a very high benefit for themselves (10%/year of service - i.e. 100% of pay lifetime benefit after 10 years) in 2020 and is now realizing the plan didn't cover a sufficient number of employees to be in compliance with the applicable laws. This notice is essentially telling you that although you might not have known you were a participant, you might be, and since you might be a participant, we need to tell you that we are freezing the plan until we figure this out. Sounds like a mess for your "company". From your perspective, you may end up getting a benefit you never knew you were entitled to, or you might not. Since they sent you the 204(h) Notice, I suggest that you ask for a copy of the plan's SPD. That will describe how the plan works and what the benefits are. You could also look at the form 5500 which is available in public domain. It will also contain an abbreviated plan description Easiest way is to search your company's EIN, but plan name also works. https://www.efast.dol.gov/5500Search/

The plan document will contain provisions that state what happens when a person resumes working after retirement, or works beyond their Normal Retirement Date (NRD). The plan sponsor, though the plan document, define if the benefit is suspended, or if the participant can receive an in-service distribution. It is not discretionary. Just from my personal experience, most collectively bargained or Taft- Hartley plans suspend benefits if the participant returns to work or continues to work beyond NRD. This is more about preserving jobs for younger members. Unions generally want people to retire, and stay retired so that younger people can fill the jobs and get experience. Some plans permit people to return to work in special situations or after certain ages. For example if they retire early, they cannot return to work without a suspension but once they reach Normal Retirement Age, maybe they can return and work as long as they stay below a certain number of hours. Some plans also have "critical shortage" rules where they allow members to return to work for a specific time period, say for a large construction project. In the corporate world, "in-service" distribution provisions are more common because they tend to want to keep more experienced people in place. That said, allowing people to receive retirement benefits and continue to work can make it difficult to get a person who should retire, to leave. This can create bad HR outcomes.

Can you provide more details about what aspect you are questioning? The MRD is based on the accrued benefit. Are you asking about a traditional DB, or a cash balance plan? The plan doc contains provisions applicable to the form, timing, and amount of payment.

Just unfreeze it, grant a small accrual, the re-freeze it. Would need to be careful about discrimination if there are NHCEs not getting a comparable increase in their accrued benefit. I believe the 415 increase is considered a new accrual that would need to be tested.

You need to give participants at least 30 days to respond (most give 60-90), you will then need to demonstrate to the PBGC that you did a diligent search, which includes a demonstration of at least one private search company (PBI, LexusNexus, Berwyn Group, etc.). Sometimes a phone call is the best way to reach people. PBGC regs are fairly clear about what you need to do.