QDROphile

MWeddell makes a good point, but despite the payroll deduction, someone on the verge of bankruptcy could be denied a loan because the bankruptcy would thwart the repayment arrangement. The fiduciary has a serious judgment call to make.

I tend to be uncharitable to persons who purport to be professionals. Peple who don't know should say so. If the broker (was "borker" a Freudian slip or bad typing?) simply answered a poorly asked question, it is still shame on the broker. The nature of the question, even if poorly asked, deserved a careful and complete examination and answer because the issue can be confusing to a civilian and the consequences can be significant and irreversible. Perhaps I am unfairly harsh because the client's impression from the answer would lead to transactions that are likely to generate more revenue for the broker.

Don't spend your time trying to prove a negative with idiots. Give them the answer politely, refer them to the avaliable resources and go on with your productive activity.

The plan needs the bond, but not for the organization itself. The plan should be designed so that the organization is not a fiduciary. My point is that the organization is not bonded.

The QMCSO statute says the a plan cannot be required to provide a benefit under a QMCSO that it is not desigend to provide. If your plan does not provide stand alone dental benefits, the MCSO is not qualifed and can be rejected. But the plan could separate benefits specially for QMCSOs if you want. If so, the written QMCSO procedures (you have these, of course, because ERISA requires them) should specifiy, and it would not be a bad idea if the plan said so, too.

If the plan's loan provisions were drafted competently, they would say that a loan will not be made if the fiduciary does not expect it to be repaid. In your situation, a loan is not available under that standard, so the hardship requirement of borrowing under the plan to the extent available is satisfied. But so few loan programs are written and run properly ... .

Proponents of flaky ideas have to show why they are right, not the other way around.

Tell me who you think is supposed to be bonded.

And get yourself another borker. This one is completely self interested or incompetent.

You should not put the organization in a position to need the fildelity bond for itself. I know you did not ask that question, but take heed.

I regret being too busy to do that. I think you have to go to USERRA, and that is more work for me than pulling a citation from tax materials.

I have ranted about the intellectual bankruptcy of this scheme in another thread. But the IRS buys it and I have done it and received determination letters.

"Fleeing the country to avoid prosecution" caught my eye and facilitating activity in furtherance of a crime and harboring a criminal came to mind. I did not offer a conclusion one way or another, but I think the issues are interesting enough to warrant careful consideration, as I suggested. Attorney/client privilege is a not shield for everything. The rules are very tricky when criminal behavior is involved, especially when the alleged criminal and accomplices have not been apprehended. I don't like lawyer bashing much, but everyone has to take a joke now and then.

Really bad idea. Distance yourself from it to the extent possible. To the extent it has any thinking behind it, the thinking is twisted.

It matters only to the participant's attorney, not the plan.

That attorney might want to take an ethics class and a criminal law class before making such arrangements.

Perhaps someone would like to comment on the language of ERISA section 609(a)(2) (A) (i), which says that the order may "create ... an alternate recipient's right to, or [assign] the alternate recipient the right to, receive benefits for which a participant is eligible ... . This has all sorts of implications, such as the alternate recipient could be substituted for the employee/participant if dependent coverage is not available, or perhaps that the alternate recipient gets the reimbursement money instead of the participant. I don't believe that the statute means what is says (if you can figure out what it says). I also believe that another section trumps the stupid language, but isn't it nice to be working from a comprehensible concept?

It sounds like you have a bit of a lead. If the owner is an employee, the owner is a party in interest under ERISA. If the owner owns 10 percent or more or is an officer or director, the owner is a party in interest under ERISA and a disqualified person under the tax code. The owner might be a fiduciary of the plan, which would be both a party in interest and a disqualified person. If the owner fits the definitions, the transaction is prohibited. Then you go looking for exemptions.

The amount she would have earned if she had been at work. She gets a contribution if she meets the statutory requirements for the leave and the return.

Have you tried providing an estimate to the rugged individual of ALL of the plan's administrative expenses that his/her plan account will now bear?

You may wish to search prior threads about naming the employer as plan administrator. In one of them, Kirk Maldonaldo explains that technically, a plan administrator is not a fiduciary if the plan administrator is limited to only those record keeping and reporting functions expressly assigned by ERISA to the plan administrator. His is a nice analysis and probably correct, but it requires a precision and discipline that most plans cannot maintain. A plan administrator is likely to slip into fiduciary functions and it is also practical to have the plan administrator be a fiduciary. The fiduciary would have to oversee a "pure" plan administrator." The employer should never be named as the fiduciary and you are correct the the TPA will not want to be a fiduciary, so the TPA is very carefull to avoid "plan administrator" or any other label that implies "fiduciary."

The ability to get money out of the plan before you terminate employment is a very limited. The plan must follow the law. Distributions while you are still employed are allowed only for "unforeseeable emergency." Among other things, a distribution is not allowed if events that cause the financial need are within the control of the participant (like running up consumer debt) or can be met from other sources, including liquidation of assets or reimbursement by insurance. To put it bluntly, you must be close to destititute. Even then, the distribution must be limited to what is actually needed to meet the emergency. So all of your debts and all of your resources, even your ability to borrow, are relevant to whether you may get the money and how much you can get. Some plan administrators are more lax than others about the scrutiny they apply to requests, but it is difficult to argue with exacting standards. It is not supposed to be easy to get the money and the administrator must be satisified that the rules are followed.

Why avoid adopting the model amendment? Why do you want to deal with even the suggestion that you are not following plan terms? Why deal with the suggestion that the plan could decide to limit contributions more than the law requires by intentionally retaining the multiple use provisions as a matter of design?

Is the question about service or contributions/deferrals? If you are looking at service, you must look at ERISA regulation 2530.200b-2. You can get into situations where additional hours are credited. I am not saying that this is one of them. We don't have enough facts.

The rule is in the 401(k) regulations. 1.401(k)-1(d)(3).