QDROphile

If it is not a condition of employment, what does the employer do if the employee does not show proof of other coverage? If the employer automatically institutes pay reduction or deduction, would that violate applicable state law payroll laws?

The statute says "with respect to a participant" not "of a participant," but I do not know where that takes you down the line. I would start with the idea that the benefit could be assigned by QDRO, but I would also think about the implications of having a beneficiary (alternate payee) of a beneficiary (named or default) and whether or not the plan allows that. I agree that the beneficiary has an interest automatically, no claim needed. A claim may be necessary for distribution, but not the property right. The plan will have to determine the identity of the beneficiary or beneficiaries before proceeding with anything.

The plan sponsor does not determine qualification, the plan administrator or other fiduciary has that responsibility. The fiduciary must determine qualification within a reasonable time. Absent unusual circumstances, 18 months is not reasonable. Also, pending the determination, a lot of plans provide for segregating an amount that would be payable to an alternate payee if the order is determined to be qualified and investing it in an investment that has low risk of loss. That is why the earlier posts advised to collect all the relevant information. The fiduciary may have fallen short of the plan's own standards for processing.

I beg to differ. If a participant is earning pay before the effective date and has a deferral election in place, the deferral accrues, and the match along with it. Or there is at least enough of a chance that that is the correct analysis to make you wonder seriously if it is worth it to save the match for that pay period.

First, I am not aware of anything that says moving into a rental home is acquiring a principal residence. Second, the funds for the purpose were obtained without hardship withdrawal. It is at best very agressive to use a hardship withdrawal to cover a separate debt, even if the debt orginated from an elgible situation. So much the worse if the loan is from the employer.

$4000 from the plan. Maybe more from someone else, a more interesting question.

Don't forget the objective criteria, and when you figure out what that is, please let the rest of us know.

At some point the expenses would not be eligible, or would be an indication that they were not eligible, such as the medications are not being used by the participant and eligible family members. What triggers duty to inquire further is not an easy call.

In that case, the threat, and going through with the threat, of appeal to the Department of Labor is a legitimate tool. But don't use the toool too soon. The participant should get started immediately with a formal claim under the plan's claims procedure. That formality should get some attention from the fiduciary, who may be just hoping the issue will go away. I take you at your word that informal inquiry and protestation have not received reasonable response. The situation also sounds like it involved a failure to follow plan terms, which would disqualify the plan, so the threat of going to the IRS to report potential plan disqualification is a possibility. That option is a bit more self destructive, but it will touch a nerve with the plan sponsor and management as well as the plan administrator.

What is your role with respect to the plan or the participant? Are you a fiduciary?

Who are you to involve the DOL and why?

Those words are typically understood to refer to the taxes on the income that results from the hardship distribution based on the hardship standards of the document, such as medical expenses, etc. For example, if a participant qualified for a hardship distribution for $10,000 of medical expenses and was in a 20% tax bracket, the plan could distribute $10,000 (medical expenses) plus $2000 (20% for taxes) plus $1000 (10% penalty tax). My numbers are not fine-tuned for iterative computations. The language does not mean the plan will allow a hardship distribution for a stand alone income tax obligation. A hardship distribution for a stand alone income tax obligation would have to be justified by some other plan terms.

Does EPCRS still require the notice to the former participant that the excess amount is not rollable and that penalties attach if the excess is not withdrawn from the IRA?

If the plan is a 401(k) plan and the plan is not registered, no employer securities.

Assuming no state law problems, nothing requires the numbers to be translated from the original award. The original award cannot be implemented as originally provided. The checks to the participant could be split on some basis, possibly taking into account the lack of diligence by the former spouse. One consequence of the delay is the election of a J&S annuity with a new spouse, which makes the current checks smaller than life annuity checks. So one would not expect the former spouse to be getting numbers resembling those that would have attained to a timely QDRO.

Not having seen an answer, I renew the question.

Assuming no issue with state law, what prevents the former spouse from getting a share of payments to the participant during the participant's life?

So what is the compliance issue?

If it is a fixed formula, the contribution is not in accordance with plan terms, plus you are up against a very strong principle that contributions for a year have to be allocated for the year.

Maybe disqualification.

No option on year-to-year basis for nonelective contribution. Where the line is drawn on what constitutes a cash or deferred election is uncertain, but year-to-year is on the wrong side of it. Partner C can be excluded from nonelective contributions, subject to discrimination limits if Partner C is not an HCE.

Are you treating the plans as multiple employer plans?

Are you bound (and protected) by professional standards that prevent you from sacrificing the client by reporting them to an appropriate regulatory agency and then using the victim as an example for others? It would be more satisfying to get the real culprits, but the IRS probably won't go after the broker just for giving the bad infomation. After all, the plan is not required to break the law. Or just get used to it. In the area of nonqualified deferred compensation, the consultants routinely gave abusive advice and then castigated the lawyers for being too conservative. Result (with som help from Enron): 409A.

It was an advisory opinion. No cite off the top of my head, but it should be easy enough to find on the EBSA website collection, if not in one of your services.

That is because timing of distributions cannot be at the discretion of the plan adminstrator -- a basic principle of qualified retirement plans. The provisions about "may distribute" are poorly worded and must be interpreted in a compliant way.