QDROphile

I agree with your proposition about an election effective for compensation after the expiration of the six months in the new year, but others disagree and would impose the moratorium for the reminder of the next year. I don't worry about it much because I think that those who use the six-month safe harbor deserve all the grief that may come their way.

The preamble to the original regulations said that a plan could not provide for not matching catch up amounts (although other wording could accomplish the same thing), but there is nothing in the regulations to match the statement in the preamble. I don't understand all the resistance to matching catch up. Outside of extraordinary matching formulae or very unusual circumstances, catch up amounts will not affect the actual match. Do the math. Possible different story if the plan has ADP problems.

See Treas. Reg, section 1.409A-3(j)(4)(viii).

If you are referring to transportation fringe under section 132(f), where do you get the idea that testing may be required?

You would probably be able to correct under VCP, but the correction would probably require putting the money back.

Other than you can't do it? No.

HRA Advisor: The advice you got from your ERISA counsel is so outrageously incompetent that you should fire the person unless you get both some sort of explanation and a profuse apology. Even then, I don't see how you can trust any future advice. I am very curious about how you are going to respond to this situation.

The plan will be disqualified if benefits are assigned and paid other than in accordance with the terms of a qualified domestic relations order. In this rather ticklish situation, professional help would be a good idea. You may have several ways to skin the cat.

You are mixing COBRA with section 125. A person eligible for COBRA is not necessarily eligible to have compensation reduced to pay the COBRA premium.

Not quite on point, but you might enjoy reading Dahlgren v. U.S. West Direct, 12 EBC 2275 (D Or 1990). According to the lawyers for the plan administrator, the matter settled, so we don't know if the administrator would have had any responsibility for a lawyer overlooking an unexpected death consequence. My advice is that plan administrators should not try to help or explain and should confine themsleves to what the law requires -- is the order qualified or not? I think the adminstrator can and should state the interpretation of the order when the order is not clear or complete, and that explanation might make use of illustrations of consequences. The explanation will give the parties a timely opportunity to revisit the interpretation or the determination when it makes sense, not years later when the latent issue becomes the unpleasant surprise and remedial options may be unavailable.

Please explain the statment about the plan containing certain language and the effect either way.

If a db plan provides for a truly separate interest, then someone should should be on the carpet for not providing complete and comprehensive documentation about all of the possible events and outcomes realteing to domestic relations orders. More likely the plan does not allow a separate interest award and the order can't make it so. Generally, death of the AP before starting benefits causes a lapse of the interest and the participant's benefit is restored. The plan administrator has some explaining to do about determining the order to be qualified without at least some conditions and interpretations relating to those terms.

Did you think through the prohibited transaction issues?

Premiums for health insurance are not eligible expenses of an FSA.

If you are deciding how much "to invest," you hope it is a 457(b) plan. The informal postion of the IRS is disbelief that anyone would subject good money to a substantial risk of forfeiture. Exposure to creditors of the employer is an entirely different matter and is not considered to be a substantial risk of forfeiture. That, in turn, is not a comment on your risk of employer bankruptcy.

How do you get a discount? The market won't give it to you. The issuer is likely to have some thoughts about new issue at a discount, and think about whether or not the spread would be a disguised contribution.

No argument about the need for well drafted documents.

Please share why you advise against it.

If the employer is not a government or a church, it has a prescribed procedure for addressing claims, and a claim about eligibility should be subject to the procedure. The procedure must be formally invoked, which may take a written claim, delivered to the fiduciary of the plan that has responsibility for claims adjudication. If the claim is denied, an explanation is required and the claimant is entititled to see anything that was considered in making the decison. It sounds like information about credits would be included in the information considered in denying the claim. You need to follow the formalities of the claims procedure, including appeal of a denial. The plan is required to explain the claims procedures. Ask for a copy or a summary. If you do not follow the procedures, including time limits, you will not be able to sue if your claim is ultimately denied under the procedures.

Government plan are not exempt from the various discrimination rules that apply to cafeteria plans and the benefits that are funded by the cafeteria plans. Governments do not have owners, so certain aspects of certain tests will not apply and testing involves other wrinkles.

Do the valutions take into account the transactions? What do they say about the transactions? If the valuations do not address the transactions, the fiduciary is not adequately reviewing the valuations for purposes of establishing the value of the shares.

I am not aware of any authority that would excuse Seller (defined as the company that is acquired) from running the SIMPLE out for the remainder of the year.

The first question is whether it is an equity or asset acquisition.

You can't answer the question without seeing plan terms. The most you can say is it involves interpretation of the plan terms. In fact, it would not be surprising to find that a small balance cashout is an exception to the general rules that are more restrictive.

You might look at the section 415 regulations.