QDROphile

Yes, section 905.

Please don't tell us that someone had the bright idea to keep the unvested balance with the expectation of capturing forfeitures.

No. Normal retirement age or later for the money purchase money.

Except that it is too late in 2009 to elect catch-up contributions for 2008. Catch-up will work only to preserve deferrals that were timely elected in 2008.

Try this: If a service provider refuses to follow to the instructions of the plan administrator, the provider is exercising contol over the plan assets and administration. That makes the provider a fiduciary. Most providers do not like that idea. After explaining the facts of life to the provider, demand proof of the ERISA fidelity bond that is required for fiduciaries. Next, go the DOL. The DOL is more interested in fiduciaries than service providers.

How many of your clients have followed your advice to fire a service provider that does not perform correctly? I think I am batting zero.

Since IRS reviewers are sometimes confused, one must try to get the reason for the resistance. For example, the agent may think the arrangement is a CODA, and the agent could be correct depending on the nature of the vacation pay terms. Or the agent may think the arranagement violates the requirement for allocation terms. Or the agent may simply be taking a negative view without understanding how the arrangement works because a lot of arrangements don't work. You may have to press to a higher level if it is important, and be prepared to show that you know what will work and the plan fits.

We all suffer from the duplicity of the Department of Labor.

Where is the substantial risk of forfeiture in the first place with respect to the lifetime payments? It would be very difficult to have a risk applicable once the benefits started and still be lifetime benefits.

No implied agreement or disagreement with the bigger issue, but where do we get the idea that two providers is enough?

I though it was settled that the investment of employer assets at the direction of the participant was not a problem if the employer (or trustee of the grantor trust) was not legally bound to follow the directions.

Huge fiduciary concerns with respect to the transfer from the 401(k) plan to the ESOP. But you got that point. Best to have an independent fiduciary for that decision.

There is no guidance because there is no problem under the law and it would be beyond imagination that the plan terms would have anything to do with health benefits other than retiree health benefits. Just to stretch to find something to validate the concern, if the cost of the health benefits left the employer unable to cover required ESOP contributions, the employer could have a problem under the ESOP.

Why not just call the EPCRS people and ask?

How do you deal with the risk of forfeiture requirement under section 457(f)?

Consider that an alternate payee's benefit is aggregated with the participant's benefits for purposes of section 415 and 401(a)(9). I would extend the principle.

At least one state statute expressly mentions payment of fees relating to QDROs under government plans, and is not consistent with your speculation about the standard. I did not check to see if 457(b) plans in particular are covered.

Probably because someone was a very smart and sophisticated investor who had a rare and wonderful opportunity.

I second jpod.

Distinguish between "in default" and "taxable." What happens because of a missed payment is a matter of contract so you look to plan terms and loan doucments. Whether or not the amount is taxable can be influenced by the contract terms, but is governed by the regulations.

If the plan has assets it can be amended.

You can run a 401(k) plan through a 125 plan but it has to be set up properly before the salary reductions for the 401(k) feature are made. It is too late to amend to treat "left over" as 401(k) elective deferrals. Timing and proper plan terms are everything.

Not applicable for government plans. The preamble to the 403(b) regulations discusses application of section 414© with respect to 403(b) plans. For example, see p. 41130 of Federal Register, Vol. 72, No. 143, July 26, 2007.

Consider in scenario #2 whether or not the plan is disqualified because the loan was merely a pretense (and a poorly exectued one at that) for a distribution that was probably not allowed under plan terms. In scenario #1, possibly the same result for the same reason. What is the justification for another round of plan loans when the first loans are in default? I would be looking for the reasonable basis for expecting the loans to be paid.

If you look at the ERISA claims procedure regulations under section 503 of ERISA (ERISA regulation section 2560.503-1), you will find two pertinent provisions. 1. When a claim is denied, the denial must explain what would be necessary to perfect the claim. 2. A claimant may submit material for review of a denied claim even if the material was not submitted in the original claim. When I put those two points together, I conclude that if the claimant submitted anything remotely resembling a valid claim by the deadline, you cannot preclude a claimant from supplementing the orginal documentation after the deadline and denial to cover the missing information and be successful in the claim. The conclusion presumes timely submission of materials under the claims procedures, including the review procedures.