QDROphile

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.

Many ESOPs hold only shares and no cash. If "funds" means cash, it is not surprising that there is none. Many ESOPs provide for distribution of shares to participants, and then the recipient sells the shares to the company or the ESOP to get cash in the end. The answer about funds also might have to do with timing. If the ESOP will distribute cash, it may do it on a particular schedule and will have cash only immediately before the distribution. Finally, the company may be broke, so no matter how the ESOP is designed, there is no cash by any means to pay ESOP participants. You should read the summamry plan description for the plan to try to get an understanding of where the money comnes from and when.

You need to take into account the new section 415 regulations and whether or not the plan terms take into account the the section 415 regulations.

Makes no difference if it was set up as a multiple employer plan. The securities law problem arises because multiple employer plans do not enjoy the exemption from registration that single employer plans have, whether or not the plan expressly recognizes the multiple employer status.

If the particpating employers are not all in a controlled group you need to call a securities lawyer.

It would probably be reasonable for the plan administrator to interpret the plan to provide for match based on all of the elective deferrals for the year, but a careful reading of all of the relevant terms is necessary.

The DB plans may be providing benefits under section 401(h) of the tax code. A 401(k) plan cannot provide benefits under 401(h), but a money purchase pension plan could.

For details about how to comply with section 415 by reducing nonelective employer contributions you will need to consult with a competent professional and the particulars of your situation. The most straightforward approach is to start with a proposed profit sharing contribution and test for section 415 compliance, taking into account all expected annual additions and the plan's allocation provisions, including the proposed profit sharing contribution. To the the extent the proposed contribution would cause an excess, the proposed allocation to the participant would be reduced and the proposed contribution would also be reduced by an amount that would cause all actual annual additions to comply with the limits. It appears that you would not have to take into account discrimination rules in making the reductions because all employees are HCEs. Plan terms have to support the method of calculating and reducing amounts.

You can reduce the profit sharing contribution amount if you do it right, including correct timing. The plan needs appropriate terms.

You can still reduce the deferrals under the new regulations, but an excess is tough to catch in time. It is easier to reduce the nonelective employer contributions that are typically made after the end of the year because those amounts can be tested on a pro forma basis before determining and contributing the amounts. The plan must have terms to provide for the reductions.

How do employees get to make individual deferral elections to a governmental qualified plan, other than a grandfathered 401(k) plan?

What about the snag point in (B)(1)? It sounds like the employer is thinking in 2008 about compensating the employee for services in 2007. How could the employee have received the compensation in 2007 but for the election, and when was this election?

If you had either a decent order or decent written QDRO procedures, you would know. So maybe you have to reject the order because it fails to specify adequately the amount payble to the alternate payee.

I would really love to see the TPA trace through what I presume are the section 415 regulations to get to the result you describe. For starters, compare sections 1.415( c)-2(e) (2) and (e)(3). Forget about the "employee" fraud for a moment (but only a moment). Did the spouse terminate employment? Somebody has a lot of explaining to do even before you get to the questions relating to 401(k) rules.

This is not the sort of advice that a plan record keeper should be providing.

Probably the most productive inquiry is whether or not a disclaimer of the benefit will work.