QDROphile

That is not the usual reading of those provisions of the order. Although orders are typically poorly drafted, I distinguish between FORM of payment (e.g. lump sum, installments, annuity) and TIME of payment (e.g. any time, as soon as the plan allows, upon start of benefits to the participant, as soon as participant is able to start benefits). I think the TIME specified in the order is as soon as practicable (the plan has to identify the amount and set up for distribution, typically by creating a separate account or subaccount), although the alternate payee may elect a later time. The FORM of benefit is any form available to the particpant, whenever the participant is entitled to benefits, The order is poorly worded, as usual. But my suggestion is only an interpretation. As pax advised, the interpretation is determined by many things, primarily plan terms, terms of the plan's written QDRO procedures, all the other terms in the order. If a plan intends to be restrictive toward alternate payees, it shoudl be very clear about it and either the plan or QDRO procedures shoud have express restrictions or very clear provisions about how orders will be interpreted. If the plan terms are not restrictive, and most defined contribution plans are not, I don't see much point in trying to be unnecessarily restrictive about interpreting the order itself. The plan must follow the terms of the order, but does not have to be hypertechnical about interpretation of the order. Back to the order for an example of interpretation. I assume that the plan says that alternate payees may be paid even if the participant is not eligible for distribution, as is the case with most DC plans. If the plan allows participants who terminate after age 55 to elect a lump sum or installment payments, but allows only lump sum if the participant terminates before age 55, then the alternate payee could be paid only in a lump sum if the participant was not yet age 55. But the alternate payee could still choose to be paid even if the participant was still working and ineligible for distribution. That is how I would read the order, and I would wonder what purpose is served by reading it otherwise. If the order really intended to lock the alternate payee into the plan until the participant terminates emplyment, the order should do a better job of saying so, and it would be really easy to say so.

Whether or not IRA assets can be divided has absolutely no bearing on what the plan administrator should do. The plan administrator must consider the terms of the plan's written QDRO procedures. Some plans provide that reasonable notice that a domestic relations order will be forthcoming will cause the plan to restrict distribution pending further developments. That presents serious interpretation problems and is not advisable. But the Department of Labor informal position is that something like this is the appropriate standard, no matter what the QDRO procedures say. The Department of Labor is wrong unless the plan is stupid enough to adopt the standard for itself. Unless the plan hobbled itself, I agree with mjb.

I don't know who "we" is in your message, but if "we" is left with a multiple employer 401(k) plan when this transaction is completed, "we" needs to look at the April 28-29 2005 posts in the securities law forum.

What does the plan say? The plan terms must be followed.

My suggestion was to apply the fee to all acounts and "uncharge" the accounts of the employees to reflect that those fees are paid by the employer. I guess that does not work and I should have kept mum because I did not associate the suggestion with how Relius actually works.

Would it help to understand that the law allows fees to be charged to all accounts and the employer covers the charge for employees? The law does not allow fees to be charged only to participants who are not employees.

The suggestion of b2kates is a good one, but I fear that the plan administrator will continue to be wrapped up in the joinder rather than take the right step into federal law. Still, asking the the plan administrator exactly what the PA would need to see to get some movement would be helpful.

You may wish to consider whether or not you can reduce someone's pay withour their consent. What if I wrote you a letter saying I would send you a trinket in the mail for $100 unless you wrote me back and declined? Would you expect that to be enforceable? You have very bad documentary foundation for what was done.

You have two problems. One is that you live in California, land of the idiotic "joinder." The other is that your plan administrator has joined the idioct club and can't see through the form that was filed in order to apply the federal law correctly. My condolences. There is probably no point in dealing with the administrator to get any sensible consideration. You will probably have to go back and take action with respect to the original divorce proceeding and come up with some appropriate piece of paper that looks like some action was taken with respect to the benefits, even if it is only an order that says the former spouse is entitled to none. That piece of paper will probably have to look like a QDRO, but it is possible that there is some other form (it is a form practice in Cali-form-ia) that will demonstrate that the proceeding terminated without disposition of plan assets. It is possible that a letter from your former spouse will do, but don't count on it. You need legal help on Cali-form-ia procedure. Don't expect to solve this with logic or intelligence; neither of those characteristics are part of the system.

Do you want to start with a discussion about what the 2005 election says about its duration or what the plan says about the failure to submit a new election?

I agree that paying for dental coverage through a medical reimbursement plan with pre-tax dollars is confusing and appears to problematic if the MRP is the FSA and is not part of a section 125 plan. Pre-tax dollars is understood to mean salary reduction dollars.

You have to be able to get a distribution in order to roll it over. Start with the question about availability of a distribution.

Plan terms will cover spouse consent. Usually no consent is required for distributions form 401(k) plans. There are no rules that require any particular outcomes for the circumstances you describe. There is no rerquirement for carry over of beneficiary designation to an IRA. Plans are required to take certain actions upon receipt of a domestic relations order and they may decide to take certain actions with less formal notice of an anticipated order. You are not going to find cites to prove a negative.

What role do you have relative to the plan? What documents were given to you, by whom, and for what purpose? What is provided in the plan's written QDRO procedures about receipt of documents and information such as you describe? At first blush, there appears to be nothing going on that would cause the plan to do anything except process the distribution as requested. Depending on the circumstances, certain formalities may have to be observed and distribution may have to be delayed.

I think katieinny asked a simple question, despite unfortunate and unintended reference to FSAs. The cafeteria plan that is used to fund the core health benefits (HDHP or otherwise) can accommodate the HSA arrangement as well, with the appropriate terms to account for the special rules that apply to HSAs under cafeteria plans.

HSAs may be offered through cafeteria plans. HSAs enjoy many exceptions to the usual cafeteria plan rules. A fair amount of work on your plan document will be necessary to accommodate the HSA to full advantage.

The IRS has informally stated that purchasing a co-owner's interest is an acquistion of principle residence. But the money has to be used for purchsing the interest, not "paying out" the former spouse.

A plan administrator does not care who is the author of the order. The only concern is that it meets the requirements for qualification. Who signs the document and whether or not the document is a domestic relations order (hoping to be qualified) is a matter of local domestic relations law.

What are you going to do about FICA withholding and any other payroll deduction amount?

You have to distinguish between salary reduction and payroll deduction. Salary reduction is what makes the premium amount "pre-tax" (what an unfortunate term!). Payroll deduction can apply to after-tax amounts that are directed to some use, such as payment of health plan premiums -- or more likely long-term disability premiums. Section 125 requires salary reduction agreements. They need not be complicated and can be included on the benefit election form. Whether or not a new salary reduction agreement is necessary each year depends on plan terms, but if benefit selections or premiums change for the next year, do you dare use the old agreement?

IRS audit guidlines say that hardship criteria must be "objective" and I don't see how anything can be objective without some established, and prefereabley written, standards, whatever "objective" may mean. The plan document will say something. Start there and see what you can come up with. Maybe competent professional advice is in order.

First question is always what do the terms of the merger and the mreged plan document provide? Methinks you will find that the vested particpants will maintain 100% vesting in the new money.

ADP is a low cost, low quality provider in my experience. If you are small and simple, they might work out. This arrangement is not simple.

Everything depends on the interpretation of the terms of the order/stipulation. The question cannot be answered in the abstract. For the 403(b) arrangements, you will probably need more than what you have in order to transfer an interest to your former spouse but the terms of the order/stipulation could satisfy the requirements.

I agree that it would be best to get direction/agreement concerning the disposition of the excess because it will help the plan administrator avoid a controversy in a forum that does not understand or respect rules relating to qualified plans, including QDRO rules. Relying on pre-emption is not the best first line of defense. I won't agree that the measures are necessary under the law as it should be applied. Also, the terms of the QDRO will play a significant role, and we know nothing of the terms.