QDROphile

EPCRS anticipates all sorts of errors, even ones you can't think of. That is why it provides the general guidance that you have used to formulate a correction. Your second thought for correction does not appear to me to be appropriate. If you do not have the specific circumstances for a specific correction method, don't try to force a correction that does not fit. If you can't tolerate any uncertainty, you will have to go with VCP. I looks like you are on track to use principles to formulate a reasonable correction. I suspect that some others would urge avoidance of distributions, but I don't think that is such a strong argument with elective deferrals.

The plan should not allow the proposed distribution. The plan should not allow acquistion of an undivided interest, especially if the participant will own an interest in the same property, so the plan should not find itself in the same place on the back end. You are correct that there are legal issues, but the administrative issues alone are so troublesome, and the participant's expectations are so out of line, that the idea should be dismissed out of hand. The plan would be in for too much trouble, even if you could resolve the legal issues. And if you still want to try, you had better make sure that the participant or the participant's account will be charged for the effort with or without ultimate sucess, and make sure the particpant knows about the charges up front. The participant is going to be a separate source of trouble.

A provision that a loan is due and payable upon an event does not mean that adverse consequences occur at that point. The consequences of failure to pay when due is a different matter, which gets you into your grace period question.

If you want to take it personally, go ahead. It was intended as a general statement of affairs, not a barb. This issue was a nonissue from the beginning, and after years of resolution of the nonissue without any credible counterpoint, I can't believe that it still comes up. I can understand why there is no better official statement from the IRS on the subject -- the IRS does not bother to tell us to look for the sun in the east in the morining, either.

See the preamble to the section 415 regulations and any number of threads on the subject on the message boards. A recent thread on the subject gives more specific focus on the preamble language. I can't believe that anyone is still asking these questions.

Three strikes. #2 is possible for nonelective contributions. #3 is possible, but the make up contributions will not be deductible for the missed year, the deduction will count against the applicable limit for the year of contribution, and the contributions cannot be allocated based on employment in the missed year.

The old plan document could work with an amendment to cover the points identified above, but it would be good discipline to use a new plan document so everything gets reviewed to make sure it still fits. If you amend the old plan, people will be lazy about whether or not all the old plan terms still apply in the same way.

Elective deferrals are included in FICA wages.

A plan cannot refuse to qualify the order because of no SSNs or DOBs and it is foolish even to suggest or encourage inclusion of SSNs or DOBs.

You might have trouble if a recipient used some or all of the distribution for the benefit of the other person.

"If the plan requires involuntary cashouts, then the plan sponsor is required to send out the paperwork and is then required to force the payment. It is not a plan provision that can sometimes be followed, that would be an operational error (albeit a minor one)." Plan sponsors do not handle distributions. Plan administratores handle distributions.

Recored keepers can be asses and they need to be directed by fiduciaries who have enough knowledge and spine not to be cowed by the asses. The proeblem is that many clients of the record keepers look to the record keepers to be fiduciaries and lawyers and the record keepers are dumb or desperate enough to fill those roles without admitting it and without competence.

Some tidbits for you to put together: 414(p)(3)(A), and no fair claiming you can draft the plan to provide no other benefits to alternate payees. 414(p)(4)(A)(iii) 414(p)(5) ERISA 206(d)(3)(J); the tax regulations go both ways, more often speaking about alternate payees as distinct from beneficiaries. If nothing else, you can conclude that a plan that is subject to the annuity rules cannot provide that an alternate payee will receive only a lump sum no matter what.

The Department of Labor would say that a "don't vote" provision is not consistent with ERISA. It goes farther than that. Also consider the DOL position on proxy voting.

The question about what the plan document says is an answer to your question about whether the trustee will vote in its discretion or in accordance with other votes. The trustee will do what the plan document says unless the terms are contrary to ERISA, so the amendment should provide for what is desired.

What do the plan/trust documents say?

The Department of Labor would prefer that the Trustee vote the shares and would probably be unhappy with the current provisions.

Help you did not ask for specifically: Has anyone thought about securities law compliance? I am assuming you have what you say, a multiple employer 401(k) plan.

Food for thought: Whether or not the reimbursement is paid at the same time as compensation, it is not compensation; it is a medical benefit that the employer is committed to deliver in accordance with the terms of the plan.

"The physicians are planning to lease the staff from some other organization." I assume that you mean that the LLC is planning to lease employees (probably at the suggestion of the physicians). Employees of the LLC (the physicians) are not the employer. More important, someone needs to determine if the LLC is a governmental unit or an instrumentality of a government. The 100% ownership is a very important factor, but it is not impossible to have other considerations cause an affiliated entity to fail to be a governmental instrumentality. If the LLC fails, the LLC plan is not subject to the exclusions from discrimination rules that apply to government plans. I do not know how the disregarded entity rules would fit into the analysis.

Depends on the plan design. The plan could be almost the same as a 401(k) plan. At the other extreme, it could be more like a bank account with annual deposits. The plan could also be more like a qualified defined benefit plan. You might also want to consider that a mistake could have more serious tax consequences and be impossible or more difficult to remediate compared to a qualified plan. Finally, ask who will be responsible for the securities law compliance and how that will affect your work.

vebaguru: I think the statement that FSAs can reimburse long-term care premiums needs a bit of qualification given the terms of section 125(f) and the fact that most health FSAs are delivered through cafeteria plans.

Misrepresentation upon misrepresentation, assuming that the statements were understood correctly. I suspect everyone is guilty of some misunderstanding.

Whoa! What you are describing does not look like it will comply with the exemption from ERISA trust requirements. It looks like you are setting up a separate fund for the health FSA. Is the money going to be held in trust?

My bad. I had another recent situation in mind and did not give the question adequate separate thought.