QDROphile

If there is simply a merger, yes. The “original plan” is subsumed into the merged plan. As Bri suggests, the transaction can be designed differently with different outcomes.

I think the concern with engaging with the client is not getting involved in matters that are not within the scope of the services and expertise of the service provider, and knowing the boundaries and limits. This is a problem that many service providers have. It is very tempting to try to be everything to a client for the sake of client loyalty and respect and the client is not likely to appreciate limits by themselves. The client will go to the perceived least cost provider for as much as possible.

I agree with Bird and add that a similar confrontation would occur if the employee asserts that a non-deferral employer contribution should be made. They seem to be on the same page, and that effectively establishes an interpretation of the contract even if we outsiders don’t have the same interpretation. If one or the other steps outside of the interpretation, that is a contract matter, not a plan matter. I am curious about the enforceability of a promise (implied or express) to make a particular deferral election (in this case the employer might not care unless the amount is meant to limit the deferral). My first thought is not, because then it would not be elective. Or if it is, then it is not elective and the plan has a problem with treating the deferrals as elective deferrals.

What do the deferral elections indicate is happening?

Does the plan have a provision to require spouse consent to designate a beneficiary other than the spouse?

I am reminded of my conviction that we got section 409A as a consequence of “consultants” claims that our advice/interpretation about nonqualified deferred compensation rules was too conservative. The quoting function is illustratively mechanical in attributing Brian Gilmore’s statement to Luke Bailey.

If Voya is not a fiduciary, then Voya must follow the instructions of the appropriate fiduciary or convince the fiduciary that the ordered action is not proper (e.g. not permitted by contract or plan terms). If not, Voya should be fired and threatened with breach of duty. Taking on fiduciary functions by meddling (not executing administrative directions) makes one a fiduciary, whether or not named. If Voya is a fiduciary, then Voya must act in accordance with a plan terms or the instructions of a superior fiduciary and should be able to explain its actions coherently. Start by asking yourself, then Voya, if Voya is acting as a fiduciary.

One shortcut is to transfer the loan proceeds to the closing escrow for the house. This is also a procedure for a hardship distribution for purchase of principal residence, with the advantage that if the transaction does not close, I believe the unwinding of the escrow by return of the funds obviates the question about "reversing" the distribution - the distribution is contingent and does not occur. Is it a principal residence? I will leave that to others.

However, money is fungible, so if the individual is eligible to contribute to a Roth IRA, the net distribution $$ can be used to fund the Roth IRA. Not a rollover.

Many ESOP companies have a devil of a time with valuations in time for administrative needs, such as distributions, and the time mandates are more liberal than 60 days. However, valuation standards and practices for ESOPs are arguably more rigorous than would be required for nonqualified deferred compensation. Personally, I am somewhat cynical about valuations and what it takes to get a valid one for any particular purpose.

One of the aspects of the cautions against inexperienced assistance in these matters also applies to the "other distributable event" ideas: the different transactions have different implications, specifically including federal and state tax consequences. The tax consequences of dividing and account by QDRO vs some other avenue for extracting money from the plan for ultimate division of the account are quite different and would change the economics of the "equal" division between the parties. It is more complicated than dividing by two and filling in some forms.

Have the securities law issues been resolved for multiple employer 401(k) plans (not that anyone seemed to care much, ever)?

It never hurts to check what the plan administrator thinks the applicable forms are now. It is, you know, federal government administration.

Your first sentence and last sentence contradict. I would agree if you meant by the last sentence that the Plan Administrator should do nothing toward helping the former spouse understand or pursue whatever rights the former spouse has under the marital settlement agreement.

As in, Punctilious Pilot? Captain Sully!

Plan sponsors, as such, as have nothing to do with plan administration except possibly appointing the Plan Administrator and trustee. An interpleader by an ERISA retirement plan usually indicates that a plan fiduciary not doing its job.

Have you thought about applicability of IRC section 414(p)(3) (A)? No plan is designed to provide a distribution to a spouse of the participant except as a beneficiary or survivor. Let the proponent bear the burden of persuasion.

Be careful about concluding that the plan accepts rollovers. The plan may accept rollovers only from participants. If the distribution is a total distribution, then the person who wants to roll funds back is not a participant (interpretations matter here) and is not eligible. There are variations on this theme.

Supplement to the reference to interpretation of the plan document: The appropriate fiduciary (usually the plan administrator) will be in a stronger position if the plan’s written QDRO procedures specifically address the issue before the order is submitted. Not that purveyors of domestic relations advice or documents always read the plan documents, but plan provisions that pre-empt what the plan believes to be an inappropriate action (informed by ERISA principles) involving plan assets may also affect initiation of those actions.

You might consider what “sometimes”means. If there is a revolving door with enough people going out and back in within short intervals, immediate distribution might be problematic, or at least the optics raise questions. Rather than live a life subject to the whims of circumstances and intent, a change in plan design or reemployment policy may be warranted. Industry standards and practices would be relevant.

Did you check the linked material?

Good for you. Parts of me aren’t working, but that is what goes with aging. I experienced labor only vicariously through my wife. The closest I got was coaching the breathing.

State law, corporate articles and bylaws, the nature, form, text, and context of the resolution, and what you mean by “signed” and by whom. For example, from your post, I cannot tell if this was (1) a resolution adopted at a meeting on August 25 and memorialized in minutes signed by the Secretary on August 31, (2) a unanimous written consent that specified an August 25 effective date, executed by all directors with dated signatures of August 31, or (3) something else that is valid and effective, as stated, under applicable state law.

I agree with the comments to the effect that a plan-to-plan transfer is the appropriate vehicle, and given the design, unless there is some material difference between the plans that is not described, someone did not do their job if the plan documents do not already provide for transfers of this sort.

But the insurance industry would never allow that.