QDROphile

Plan A can spin off a portion of the plan to become the plan of B or to merge with the plan of B. Whether or not the acquisition allows participants to elect a distribution has no effect except that participants may be able to decide whether to go for the ride to B's plan or take the benefits under A's plan to manage themselves. A is not compelled to engage in the spin off.

So what would cause the forfeiture?

Consider what the plan says about the period of coverage and how that relates to the date of termination. The salary reductions should not be made for pay outside of the period of coverage, but should be made for pay within the period of coverage. Coverage usually ends on the date employment ends. The statement about COBRA makes no sense to me.

You are on thin ice if you represent the plan or are a plan fiduciary and have any involvement with personal matters of the particpant or a beneficiary, including how to deal with the plan in their efforts to divide plan assets. Once you go beyond a naked recommendation that they seek legal assistance you are exposing yourself or others to liability. You may explain the plan's charges and provide estimates, clearly explained as such.

Sorry. I meant multiple employer plan, as I stated correctly in my first post.

Go to the Securities Law Aspects of Benefit Plans forum and look at a thread started on April 29, 2005. The securities law exemption that applies to excuse 401(k) plans from registration does not apply to multiemployer plans. Company stock is irrelevant, although employer securities in the plan is another circumstance that can cause a 401(k) plan to be subject to registration. In addition to the Securities Act issues, the plan might also have Investment Company Act issues.

You will probably have securities law compliance issues if you have a multiple employer 401(k) plan.

What could constitute a QDRO, and whether or not a divorce decree or a judge is involved, depends on the the state's domestic relations law. I can imagine that child support enforcement would be part of a state's domestic relations law, so an agency order could be a domestic relations order. Then the question is whether or not the order meets qualification requirements of federal law.

A divorce decree is a domestic relations order whether or not it qualifies. If one is submitted to the plan, the plan administrator is required to take some action with respect to it. The action will depend on the circumstances.

If they think they can properly discharge their fiduciary duties without the assistance of a financial or other expert, nothing requires otherwise. Does not matter who sponsors the plan; the question is, who has the horsepower to cover the responsibilities? Who has the duty to advise about the fiduciary responsibilities and standards?

She has her foot in the door. Whether or not the divorce decree is qualified, it is a domestic relations order and she will have a reasonable time to come up with an order that qualifies. That is why the pension benefits are suspended. Your husband may become involved in (1) the state court if further state court action is required to produce an order that will qualify or (2) the qualification process in any event.

My take is to disregard stories about apparently bizarre arrangements until full details are provided with some credibility. I take the same position about analyzing or monitoring proposed legislation. It needs to ripen to avoid a waste of time.

You should get a document called a "summary plan description" that explains your benefits in some detail, but with understandable terms. Ask for it if you don't have it already.

So outlaws can get lawyers, but not record keepers?

1. The plan may have provisions that are violated by the transaction. Whether or not those provisions are grounded in ERISA, you lose 404© protection if you let a participant violate a plan provision. It is fundamental to ERISA that the plan be administered in accordance with its terms. The phrase "consistent with ERISA" does not mean required by ERISA. 2. Sorry about the mistyped reference to Form 5300, I meant Form 5500. Form 5500 is a report to both the Department of Labor and the IRS. Non-exempt party-in-interest transactions are required to be reported on Schedule G. I am not offering whether or not the transaction fits within the exclusions from reporting, but someone needs to determine if reporting is required. If required, I think it is an audit risk.

The plan will have to report a known prohibited transaction on Form 5300, which raises odds of audit. See ERISA reg. section 2550.404©-1(d)(2)(ii) for the exceptions to the 404© protection for fiduciaries. The exceptions include transactions not in accordance with plan documents and transactions with affiliates.

Nowhere in 414(p) (1)(B) do you see the words "court" or "judge". The words "judgment" and "decree" certainly imply a court proceeding, but many agencies issue "orders" and no court is involved. It depends on what the state "domestic relations law" encompasses and permits. To me, child support is in the general category of domestic relations. The DOL has issued an advisory opinion about agency orders as domestic relations orders, specifically to point out that the term is not limited to court proceedings.

Who suggested that signature by a judge is a requirement for a QDRO? Your refinement about child support collections law is well taken. However, the plan has to be careful to act properly in accordance with the requirements, and my experience is that the agencies are terribly sloppy in their communication. Add to that the federal law that is also terribly sloppy (for example, the law refers almost exclusively to employers and incorrectly presumes that the employer is providing retirement benefit payments) and the state law that is probably even worse, and my conlusion is that the plan has to be careful in its interpretation of what is required. I have looked at the collection law as a domestic relations law and applied the QDRO requirements accordingly, including not reading into the law (ERISA) a requirement for signature by a judge (or even a court document) when no such requirement was ever there in the first place.

I think someone needs to beat some sense into the plan sponsor. And someone needs to talk to you about issues involved in trying to humor idiots. Either allow hardship withdrawals or don't. It is shortsighted to the point of blindness to consider the sorts of things you mention.

Unless the participant directs the plan to pay a portion of a distribution to the participant instead to someone else, the plan should not do so unless the payment is pursuant to a qualified domestic relations order. The entire distribution is treated as a distribution to the participant. The plan administrator should not suggest that the particpant provide such a direction, and it is questionable policy for a plan to send distribution amounts to others at the direction of the particpant, even as a courtesy.

Why would anyone want to do any of those things?

A QMCSO can require the enrollment of the employee in order to provide for the coverage of the child and can require payroll deduction to cover the cost. This is rather sensitive and the DA's office may not be particularly adept at getting the right information and preparing a good order. You should get some competent professional help. The QMCSO probably will apply directly only to the health plan. The law allows mid-year election change under a cafeteria plan to accommodate a QMCSO, and if the cafeteria plan is the only avenue for enrollment and payment under the health plan, the cafeteria plan had better have provisions to accommodate.

For an example, look at the thread started by John A on August 9, 2001 relating to domestic relations orders.

Shame and pity.

The amendment scheme also violates section 401(a)(4).