QDROphile

Gburns: You are talking out of both sides of your mouth as well as other orifices. A literal reading of the post was the the participant elected $38. I suggested that the benefits be paid to the extent of the election. If the election was $38 per month, a fair reading of the suggestion is that benefits be paid to the extent of $38 per month (the election). Who said anything about refund? $38 (or $38 per month) certainly IS within a claim for benefits of $988. All of that information is in the original post, and it was not disregarded -- all the numbers are consistent, no matter which interpretation of $38 you choose. I dare you to come out and say that benefits are not payable, whatever else you may believe about the ultimate effect of offset or consequences on qualification of the plan. I am waiting for you next twisted take on any of the facts as presented or any of the comments offered. Dig yourself in some more. I did not miss the issue of failure of actual salary reduction. It is my view that the dollar amounts involved do not warrant the trouble of trying to recoup the excess compensation, which was implicit in my first post for lack of any comment on action beyond payment of the claim. The point was explicit in my second post. You can disagree on the ancillary question about offset or related actions, but that is not what you say you are quarreling about. jpod, unlike GBurns, asks a legitimate question in a legitimate way based on implied legitimate disagreement. Disagreement is OK. My response to jpod's legitimate post is that I am very uncomfortable with an employer's messing with an ERISA benefit, even if the benefit is not directly covered by the anti-assignment provisions (you would absolutely never try an offset under a retirement plan). The plan is still subject to exclusive benefit requirements. Therefore, I would not try to get recovery out of the payment of benefits, even if it is convenient. That means recovery must be pursued separately based on overpayment of compensation. That pursuit is more trouble. Even though it is likely to prevail, the matter will be complicated by the employer's fault and the time and effort in the end is not likely to be worth it.

GBurns: Of course the answer is different if the election was not $38 for the year as stated in the original post. But wait, maybe it is not really that different. Let's see, if the actual election added to $988 for the year, and we substitute to come up with "pay the $988 of benefits and call it good" what would you say? I would say you really go out of your way to find something to criticize instead of giving thoughtful consideration to the posts. While the employer might have some recourse to overpayment of the employee, I don't think it is worth pursuing and your suggestion of withholding from the benefit payment is definitely a bad one.

Pay the $38 of benefits and call it good.

If you are talking about health FSAs and colleague two understood that, then if colleague two is in the business, he or she should get out. If colleague two is not in the business he or she should shut up about things he or she knows nothing about. You cannot be too harsh with colleague two about this. This is fundamental baby stuff. You should never consult or believe colleague two again. This is such a bad mistake that it is fatal to credibility.

Red herring. The participant should have provided for a date certain in the QDRO if the participant did not want the uncertainty. The PA has to understand that one person or the other is going to regret market swings no matter what the method for implementing the division, and no implementation and payment can ever occur fast enough for an alternate payee. The PA should not worry about the terms of the order, except to execute a proper one in an administratively reasonable way. However, the PA has to look out for service providers like Fidelity, whose systems will not allow proper QDRO adminstration. In those cases, the written QDRO procedures will have to work around the inadequacies of the system as well as possible and a person drafting an order will as least know the rules of the modified game.

Nope. The order instructs the altnernate payee account to be set up with an amount as of the date the account is actually set up. This is quite neat from a record keeping perspective, but stupid for anyone who is looking for any kind of certainty (or as close as one can get with a moving target). One may presume that the adminisitrator will get around to the task in due course, since it has a fiduciary duty to do so. One may also presume that the administrator is not so stupid as to attempt market timing, even if inclined to favor one person over another (which would be a breach of fiduciary duty).

Could be a PT if Participant A is a fiduciary and used that status to effect the distribution.

Have you just describe a CODA?

Does that mean I have to apologize for my assumption about 457(f)?

I go back to my original response. Whatever it is you are using to measure some ultimate payment, if it is an NQDC plan, the participant does not own it, so no one can get to it through the participant until the day it is payable/paid to the participant.

Stock options can be a component of an NQDC plan, but when they are, they have a very different character as a property right. If someone has stock options awarded directly, that is another matter altogether, and I would not use NQDC terminology for such an arrangements, although I understand that there is an element of deferred compensation involved.

So what about the NQDC plan terminology you used?

Assuming that the arrangement is governed by section 457(f), the entire benefit amount is taxable when the risk lapses even though the payments may stretch over time. If you think the arrangement is not covered by 457(f) you had better be able to justify that conclusion.

Generally NQDC plans are merely promises to pay something at some future time. There are no assets in which the participant has an interest, so there is nothing to "repaper" as far as the assets (which belong to the employer) are concerned. To the extent a state court can require an employer to participate in the assignment of a particpant's property, the court still has to take into account what the property is. At some time in the future, the employer will be required to give the participant something (although it might have zero value at the time), but other than an intangible contract right to that something (in accordance with the terms of the contract), there is nothing to divide or re-register today. Consider an assignment of pay, or a lien on pay. Nothing happens to any asset until pay day. Payroll does not set up the creditor as a payee the same as an employee. The employer identifies the pay on pay day, then looks at the terms of the assignment/lien and carves out the part of the pay that is subject to the assignment/lien. The employer can set up the terms of the plan to handle it differently.

You don't fix it. You notify the plan sponsor and plan administrator of the disqualfiying error and someone will instruct you about what to do.

The location of the corporation is not important for purposes of the rule. The location of Fidelity and where and how Fidelity maintains its records is important.

Are you asking the right question? Assume the stock is represented by a certificate (the ownership document). If the stock is purchased on the NYSE and then the certificate is transported out of the United States, the stock is not within the jurisdiction of the U.S. federal courts. The NYSE is just a marketplace.

EPCRS, Rev. Proc. 2008-50.

Section 402(e).

There is federal case law to that effect relating to the payroll deduction statues, despite the DoL position.

This is not business ethics, but as an ERISA matter you should be sure you are dealing with the plan fiduciary, or be advising the plan fiduciary about what is happening. I realize that the plan administrator is "the employer" for many plans, and the plan documents often do not specify which sentient beings represent "the employer" for plan purposes, so you are left with uncertainty about the identuty of the proper sentient beings unless you are dealing with the board.

You are being too clever by half, as the Brits would say. The pension is protected from creditors, so the pension was not affected by the bankruptcy. The failed or tardy domestic relations order is irrelevant to the bankruptcy and vice versa. Separately, the failed domestic relations order did not provide an interest to the former spouse under the pension, except a right to amend in a timely manner, which did not occur. If the former spouse wants to take another run at it years later, the former spouse will have to get through the state court first, and state courts do not always keep the door open forvever, especially when someone is dilatory. If the new or amended order gets through the state court, the plan administrator should be indifferenct to the delay and should follow the order if it qualifies. However, if things have changed, such as the participant has remarried or retired, the former spouse has to deal with the new circumstances at the time of the order and may be more limited in what is available under a QDRO compared to the time of the divorce.

Courts have not always followed the DOL position, and as J Simmons point out, the new law is limited to retirement plans.

I can confirm that ADP is incompetent or worse, so pick which version of incompetence you want: (1) inability to handle Roth contributions, (2) incorrect information about purported ability to handle Roth contributions.

I agree with jpod. A change in control provision is compliant if it is more restrictive about triggering than 409A allows. I would agree with you if someone were trying to amend the change in control provision to be more restrictive.