QDROphile

Tise did not cover the issue of the staututory period very well, if at all, but it gives a workable framework and a lot of power to the fiduciary. The fiduciary has to decide what is reasonable and inform the parties so they can get with it or go to the fiduciary and explain why more time is needed. The 18 month period starts in most cases when the participant requests a loan or distribution. The fiduciary's notice can be taken to the state court to get the court to move, though not at the direction of the fiduciary.

How about DOMA is irrelevant for the division itself? The QDDRO statute is an exception to the anti-assignment provisions of the Code/ERISA. By its terms, it calls for implementation of a domestic relations order, which is a creature of state law. There is nothing in the statute about federal law of marriage in the requirements for qualification, which are the only barriers to implementation of the order in accordance with its terms. It starts getting more complicated when one has to decide how to apply the income tax rules on the distribution. In a case of gender change, I still think you have a spouse or former spouse as alternate payee because at one time they were spouses even under DOMA.

I concur with Sieve.

The Tise case inteprets the law to include a reasonable time for resolution of qualification defects. The Plan administrator cannot determine that an order is not qualfied and then distribute the account the next week, even though that is what the statute could mean. Given that, the plan administrator should be practical about its handling of the TRO. The plan is not served by being dragged into a dispute even when it can win on technical points. Holding back a distribution for a reasonable time under the circumstances is less dangerous than paying.

Explain how you can set up a 401(k) plan that makes any sense at this point.

If you don't have a smart plan document, and indications are that you do not, this could get complicated and you need someone to help who knows what they are doing.

Nice point.

The TRO is probably a domestic relations order and has the effect of restricting distribution and loans for a reasonable period pending resolution of qualification. If a DRO that looks like it wants to be qualified is not forthcoming within a reasonable time, the TRO will be determined to be not qualified and of no effect. The plan administrator should handle the TRO according to the QDRO procedures, and the notices should spell out what the plan administrator expects to do and when.

It is also the briefest.

I gainsay, except to the extent one is trapped by a plan document, and except for related migrations to the new firm. If the hires are unrelated, but proximate, it would be a good idea to grant service credit.

Can you tell me briefly about having an annuity as investment in the PSP? Don't.

You could describe the proposed transaction in some detail but it will almost certainly come out to be a prohibited transaction.

$245,000 puts you into the middle class (if you are a Republican). The middle class can't get a match (thanks to the Democrats), so the plan pretends you are not in the middle class so you can get a match. Consider yourself lucky you get a match because the plan looks the other way at compensation above $245,000.

Department of Labor position is informal. I can't remember if it comes out in the QDRO book, available at the EBSA web site.

Schoonmaker (7th Cir. 1993)

There are almost no dumb questions under 409A except the ones that relate to how 409A does not affect 457(f).

Plan is required to hold if it has received a domestic relations order. Department of Labor says the plan has to hold if it has a whiff of a potential QDRO. The statute and the only federal decsion on point disagree with the Department of Labor.

Not much time left in December to defer much of anything. Does that, in an of itself, bother you?

Foreitures are are restored. Typically restoration is from other forfeitures or the employer has to contribute.

rcline: You are assuming the employees are excludable?

The participant is not out of luck. The participant is entitled to restoration. The restoration can be conditioned on buy back. If the plan insists on buy back, it cannot refuse to take after tax money.

I agree that your accountant should be able to do better, but you may still be stuck if you have not adopted a 401(k) plan already and you have employees. Your employees won't have much of an opportunity for elective deferrals for what is left of 2008 so you will have discrimination problems. If your your tax avoidance motivation is matched by generosity, you could adopt a plan and contribute amounts for all partners and employees within the tolerances of the discriminatin rules, which can work out quite well for the partners and have a reasonable cost for the employee benefits.

I am sorry you got stuck with an assigment that was not reasonable to give to you.

Why not ask the person who is reviewing the plan for section 409A compliance?

I think you can design a plan that allows front loading up to the limit. That does not change the coverage period. It is simpler to have everything falling to uniform lock step with the normal way that cafeteria plans work with other benefits. While that may be enough justification to do it the simpler way, that is no reason to think that it is legally required to be done that way.