QDROphile

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.

An alternate payee cannot get anything under a QDRO that the plan can't provide to a participant. QDRO accounts can be adjusted for compliance the same as any other account. The trick is to adjust properly, but it is much easier when the QDRO account is 100%.

If you cancel a deferral, that means there is no deferral and you get full compensation for 2005 -- not a raise or a pay cut. What the employer did with the money while not paying it to the employee in the meantime is irrelevant. If you accelerate payment under the terms of the plan (naughty!) then you might think about earnings credit (positive or negative) related to the deferral amount.

There is no such thing as earnings.

The income from conversion is phantom income; nothing goes into your pocket. The contribution to the SEP is real money that will not go into your pocket, either. Do you think of that as an "offset"?

The answer depends on how you define the plan. If the welfare benefit plan includes the dental reimbursement benefit, one Form 5500. If it does not, then two. My answer does not help because your problem is determining what constitutes the welfare benefit plan and you do not have clear documentation to answer that question. Or you have clear documentation and you don't like the implications. You have to start with determining what constitures the plan document for the welfare benefit plan and then look at its terms. But the plan document for the welfare benefits plan may be composed of separate writings, one of which is a portion of the employee handbook. The most likely easy conclusion is that you have two plans, based on a very simple view of what constitues the welfare benefits plan document. If you want another answer, you need more sophisticated help.

With that comment, you have shown the you are not taking this seriously, so I won't be concerned with the less than thoughtful earlier posts or any further comments from you on the subject. You know better, which is why I always try to explore any apparent difference of opinion with you. To reiterate my point, the plan administrator must recognize that the tax rules are different when the alternate paye is not a spouse or former spouse, and not may people are aware of that. Consequently, either (1) the plan's written QDRO procedures need to deal with the situation, such as providing for a default interpretation (e.g. the amount will be distributed net of withholding elected by the particpant, whatever that may be), or (2) the administrator should not qualify the order unless the order speaks to the issue of withholding. Otherwise, the administrator will risk a dispute over the meaning of the order after the administrator has determined the amount to deliver to the altnernate payee. A dispute does not mean potential liability for the plan or the administrator, but it is generally a good idea to avoid disputes. Having good provisions in the QDRO procedures provides protection, but probably does not do much to avoid such disputes because no one reads QDRO procedures before preparing orders. I think is is best to require that the order speak to the question of withholding.