QDROphile

Transition rule is not available to postpone a payment scheduled for 2007.

I think the DOL might see it as a loan to the employer in anticipation of a contribution. I don't see how you can bury it as a gain. I looks more like an operational failure, but consistent conclusion has to be reached. Better that is was a mistaken distribution rather than a deliberate advance against funds to be received. That is a serious conscious error; the DOL would be all over anyone who thinks that distributions can be done that way.

Wow. You may have some other issues, such as prohibited transactions, to consider.

Please explain how the distribution included an amount that was not yet funded.

Only if it occurs on your 65th birthday. See Treas. Reg. section 1.409A-3(a).

See 414(p)(3)(A) and 414(p)(5) and hire someone who knows the law and has had experience with the processing of actual domestic relations orders to help design plan terms and written QDRO procedures.

The article does not say how to effect the special entry date. No one said you can't amend the plan to provide for the exception. If you are dealing with a new hire, the prospect is unlikely to be a highly compensated employee, so discrimination should not be an impediment to the amendment. No one said that what you read has to be practical. Jounalists get paid for words, not necessarily for worth.

Don't get me wrong. You don't have a mistake of fact within the IRS view.

Your recordkeeper is in no postion to call the shots. Record keepers either do what they are told or they resign, or they are fired. Dan has the best suggestion to avoid the confrontation and adverse economic effect.

You can't have an elective deferral under a 401(k) plan without a cash option. You can have a section 125 arrangement without a cash option, but there must be some taxable option (cash is usually the taxable option). You might be able to design a retirement plan to pick up the unused welfare benefit amount, but it would not be a 401(k) elective deferral contribution. I would not attempt such a design. The additions to compensation testing purposes usually cover all the amounts that would have been included in taxable income but for an election to reduce pay under 401(k), 125, 132(f)(4), 457. I am confused by the phrase "defrrals to compensation."

Seems like the shorter payment schedule would have the effect of accelerating payments compared to the longer schedule, so I would play safe and treat it as a separate form for purposes of the rule. If you don't, then can you argue that a lump sum is an installment form with a single installment?

You don't have a problem. A reasonable gap is nothing to be concerned about, absent (i) skulduggery born and bred in Texas, or (ii) an express promise to do otherwise. You don't need to be hyper on this one. Of course, it helps to have intelligent plan documents to deal with bumps in the road rather than ones that paint you into a corner.

I knew that noncompetes were almost certainly bogus and rolling risk of forfeiture was bogus the way that most people were doing it.

As a practical matter, you are correct that the IRS is not likely to go after arrangements before 2005. That does not justify them or make them any less improper. Many arrangements proceeded with the understanding that enforcement was unlikely, for various reasons. Although it took the shock of Enron to move the mountain, the improper "smart and helpful" behavior is why we got 409A, which is so far reaching that it presents problems for some common and innocuos arrangements. I still say knaves, and I am unimpressed with your defense of those who simply did not get caught in the enterprise of making themselves money while leading others astray. Actually, I am impressed that even in hindsight the bad behavior is recognized for what it was and the echoes of that bad behavior are evident in the current efforts to twist and get around the rules rather than understand and comply with them.

Not quite. Removal takes advantage of retroactive amendment capability. If one can amend on October 15 to add a plan feature effective the prior January 1, can you amend to remove a plan feature? Not if the plan has operated in the year to give effect to the feature.

If the Roth feature was added in 2007, you might consider removing it effective as of the original effective date.

The key word is "explicitly." If you have a sloppy plan document that does not define compensation based on pay period to match the terms of the contribution per pay period, you are lookg at a true up. If the match is a function of compensation and compensation is defined as compensation for the year, I think that controls despite a provision that allows periodic contributions.

Just wait until some executive comes and reams you about not collecting the full match. Then you will want have had all sorts of disclosures about the dangers of having such a plan design.

The recipient has the following options: 1. Roll over the distribution of the shares to the IRA and then the IRA puts the shares to the buyer. The IRA owns the note and collects the payments. 2. Accept the shares and immediately put them to the buyer. Roll over the note and the first payment to the IRA. I assume that the intial cash payment happens at about the same time as the distribution/put. Option 1 is usually preferred. Timing is everything. Not many IRAs will take the shares or note.

Somebody seems to have forgotten that 409A overlays 457(f) already. Proceed at your peril. The IRS sent a pretty clear message that it will remove the tools of the knaves who persist in the same mischief under the 457(f) regulations that helped bring us 409A in the first place.

No IRS guidance supports breaking down the expenses. In other contexts, the IRS has supported allocation of expenses. I think the consensus is that overnight camp simply is not eligible.

Could be 457(b) if the contributions stay within the limits.

You did not really answer my question, but here is what I was getting at. Since COBRA only continues coverage that could be maintained but for the qualifying event, if regular participants (employees) become ineligible for coverage if they fail a condition, a person on COBRA continuation would lose coverage for failure of the same condition. If an employee participant fails to provide the information, what would happen to that employee?

What would happen if a covered employee were to refuse to provide the information?

I subscribe to Mike Preston's speculation. Another very remote possibility is that the actuaries think it is appropriate to take into account that a single life benefit has been divided into two lives, even though each portion is measured by a single life. The label is still wrong because the factor would not be the same as a joint life benefit (implied by the word "survivor"). Would the participant's portion be subject to a reduction, other than the 50%, because of the QDRO?