QDROphile

When you reqest a distribution from the 401(k) plan (assuming you are the beneficiary), the plan administrator will react in some unpredictable way. One possibility will be that the balance will be distributed to you without any questions. Another is that the amount award to the the former spouse will be paid to the former spouse and that the balance will be paid to you. Another is the the plan administrator will allow a reasonable time for a qualified domestic relations order to be submitted. It depands on what information and documents have been given to the plan administrator and how the plan administrator interprets the law and the materials submitted. Actions and documents after the death of a plan participant are subject to confusion and controversy.

Governmental plans are not subject to certain requirements, but are subject to others. If the document is of 1990 vintage, some formal compliance changes have been missed, and maybe the related operational compliance. too.

Refunds in the past probably did not comply with the 415 regulations under the circumsntaces where the ESOP ate up most of the limit. So why are you getting religion now? Keep breaking the law. The lack of IRS enforcement is likely to continue at about the same lebvel as before and you are in the same position as before, except may for your ability to express dumbfounded ignorance if you get caught.

The first two questions in any legal analysis are: So what? and Who cares? There is no "responsibility" for 409A changes. I will help with the "so what" -- taxable income and penalties. Now see where "who cares" takes you.

The excerpt is a correct statement. Earning are earnings, not contributions.

Sorry, I was sloppy in the first paragraph about limiting the application to the sex change circumstances and the irrelevance to DOMA with respect to the timing of the end of the marriage and issuance of the domestic relations order. In the end, a benefit is payable to a former spouse who qualifies under DOMA. For same sex marriages, we have the usual analysis about whether or not the partner was a dependent, and the alternate taxation rules when the dependent partner is not a former spouse, as implied by the second paragraph. I also think "don't ask, don't tell" will protect a fiduciary who is reasonably not aware of the sex issues. The published Department of Labor guidance says that the plan adminstrator does not have to look through the face of the order into the state court proceedings, but that the plan administrator cannot disregard facts (which would include terms of the order) that suggest something is amiss with respect to a federal qualification criterion. Pat, Patrick or Patricia?

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.