QDROphile

The only one who is making sense is Kevin Wiggins. The issue depends on the facts and no one has bothered to discuss anything concrete.

Where does that come from?

See the first sentence in my first response. Your other concerns relate to the question about whether or not the contributions are mistaken. That is why one of my example questions was whether or not the commissions were compensation even if the customer cancelled. If the commissions were compensation, then the contributions relating to the compensation were not mistaken. Also, "forfeiture" is not the best term to decribe corrections generally, although some corrections may involve forfeiture.

A plan can always correct mistaken contributions and allocations. The optimal and acceptable corrections vary with the circumstances. Most of the circumstances you describe involve issues in addition to mistakes in the contribution and allocation amount. If you really have these circumstances to deal with, you need legal counsel. For example, in the first situation, is the commission earned? If the commission amount is not earned because somehow the commission is retrieved if the customer cancels in 30 days, why is it paid before 30 days? How is it retrieved? Is it offset against future commissions as though it were an advance? What is the commision agreement? Are there any state law mandates that affect treatment as compensation?

Someone is overestimating the difficulty of amending the plan and transferring assets to new arrangements and underestimating the negatives of plan terminations. Yes, it can be done, but be careful what you ask for.

So why should someone offer an explanation to you on this board when you could could ask the partner for an explanation and you don't provide enough information about the situation for anything but a speculative response? I have no trouble imagining how the partner is correct in any number of likely circumstances. With respect to your question about the 18 month rule, think about it from the perspective of the plan administrator.

Ideally, one would want to consider what the QDRO says the alternate payee should get in light of the need to distribute assets, then decide what to do. But it may not matter if the alternate payee will not cooperate and the plan decides it is not worth going after the distributed money. One possible approach is to distribute $1000 from the participant account and advise the alternate payee that the remainder is attributed to the alternate payee's distribution, and not eligible for rollover. I would go with the idea that the participant is the recipient of all of the taxable dollars but transferred $4000 of them to former spouse pursuant to the divorce.

The tax regulations are very clear that a plan cannot require payment for any period of coverage earlier than 45 days after the election to continue, so no payment deadline could expire before. The regulations say that once the election is made, you are on a 45 day clock. However, if the 45 day payment period or any 30 day payment period expires within the 60 day election period, I am not aware of any authority that adresses an argument that as long as the election period is open, the employee could elect coverage even though an earlier election was made and then either expressly or implicitly withdrawn withdrawn or coverage based on that election was discontiuned. There is a conflict between right for a full 60 days to elect coverage and the right to terminate coverage if the premium is not paid within 45 days. You could send the notice of loss of coverage and then see what happens. But if the former employee tenders appropriate payment before the 60 day election period is over, do you want to be the test case? The employee could have waited 59 days to elect and then paid the first premium 45 days after that. Does that ability evaporate when the employee steps up sooner with an election? Maybe. How important is it to you to cut off coverage? I have not tried to understand on what date the 60 day election period began. I have no comment on specific dates.

Don't screw with COBRA, it is simply not worth the risk. Interpret most favorably to the former employee, which means that earlier payments do not shorten any deadlines or create any new deadines that can cause eligibility or coverage to end sooner, compared to what the law allows in situations where there has been no election or payment.

Start with publication 4406, available on line at the IRS website, and then use the resources mentioned in the publication. Unfortunately, the publication itself does not explain that an individual's deferrals under 403(b) and 401(k) plans are aggregated for purposes of the deferral limit, but that deferrals under 457(b) plans are not aggregated with deferrals under 401(k) or 403(b) plans. That is what is meant by "no longer coordinated."

Fire everyone in your office who persists in arguing a position that they cannot support with credible authority. Mistakes to some degree are tolerable, but standing on ignorance is not, despite its pervasiveness in our country. By the way, the "reasonable time" is at least 30 days.

That does not mean there is no fiduciary status/duty. It only means the assets do not have to be held in a trust.

Disregard the reference and use the plan's usual actuarial factors.

The "local attorney" is too clever by half. The likely treatment is that the "reimbursement" of the premium is compensation to the recipient.

My sugggestion was to spend money on an independent advisor, not money to get wet in the arrangement.

The regulations specify the exclusive methods for dealing with ADP excess.

Most of what you describe sounds like playing with fire. Start by hiring that competent independent advisor. If you don't want the to spend the money up front to get a better sense of the proposition, you don't have enough money for the investment activities that you are proposing. A bad arrangement will do worse than nullify all of your investment success.

Effen is making sense, but I will up the ante and confirm that it IS legally wrong. A plan fiduciary is obligated to keep participant personal information confidential. The TPA is an agent of the fiduciary (or perhaps is a fiduciary itself, despite its claims to the contrary). As the agent of the fiduciary, the TPA is bound by the same restrictions; it has no separate right or authority to breach confidences, especially not to further its own interests. It may be possible wiithin the scheme of administratration for the fiduciary to arrange for an eligible participant to be provided with certain information about options for disposition of distributions from the plan, but a TPA has no business acting except in strict conformance with the directions from the fiduciary. And the fiduciary had better know exactly what is going on under its authority.

Lori: I think you meant to post the following message: No Name: It is true that elective deferrals must be fully vested, but this discussion relates to the special provisions of Reg. Sec. 1.411(a)-4(b)(6). If a benefit is payable but the participant/beneficiary can't be located, the benefit may be forfeited. The forfeiture gets reinstated if the individual later makes a claim. The discussion of forfeitures and the regulation have nothing to do with the regular vesting rules. The regulation provides for forfeiture of all fully vested amounts, including elective deferrals.

No Name: Why are they any less forfeitable than vested matching or discretionary contributions?

Seems to me that the plan has an operational error. Look at Rev. Proc. 2003-44, which provides information that answers your questions directly, perhaps with the exception of the 1099 questions. Making the plan whole is part of the exercise, but not all of it.

Curious: You misunderstood my statement. You don't get to continue the roll (assuming you could do it in the first place - which is doubtful). When the restriction lapses according to the schedule in effect in 2004, the amount is taxable. Or maybe before. No problems does not mean no taxes. No problems means that the outcome is rather clear. Confusion (which drew you to the board) is a problem. Thinking that such a scheme was workable in the first place is a problem. Now you have no problems.

The Department of Labor informally says to provide the information, but the Department of Labor has not clearly thought about all of the issues. When it comes to QDROs the Department of Labor is imbalanced. I believe that the plan needs either legal compulsion (which may be more expansive than a court order -- agencies may have authority to compel disclosure) or participant consent. If the plan is going to produce under complusion, the plan should notify the particpant in advance so the participant can attempt to quash the order, which will be futile.

There are no problems. If the amount is not already taxable, it will become taxable at the time scheduled for the risk to lapse.

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