QDROphile

Carving the representative out of witnessing a signature does not preclude the representative from determining that consent cannot (and therefore need not) be obtained. The functions are different and separate. Careful drafting of the plan document is important, as always.

I think the plan document can require a notary and let the representative (whoever that is) off the hook. I would question the choice to limit to a notary -- but I can think of a few good answers, too.

Look at section 417(a)(2)(A)(i) of the Internal Revenue Code. But the provision may not apply, as suggested by previous posts.

The other option is that it is not a QDRO because it specifies that the plan do something that the plan does not. I prefer pax's response. State the award to the alternate payee based on the last valuation date before the specified date and make sure you explain in the notice how and why you got there.

What employer eligible for a 403(B) plan is a taxpayer?

You can have a plan that complies with 404© with respect to the portion that is under the direction of the participant. The plan has participant directed funds and a fund that is is under the management of the plan fiduciary (which we hope is not the employer, but unfortunately often is). The fiduciary is not responsible for the investment results of the participants relating to investments in the participant directed funds. But if a participant wants some or all of the participant's account in the fiduciary managed fund, the fiduciary has all of the ERISA duties (prudence, diversification, etc.) with respect to that part of the account invested in the managed fund. I don't like the implication that the participant has a one time choice. I think it is better to allow the managed fund to be available as an ongoing option, and a participant can choose from time to time to have some or all of the participant's account invested in the managed fund. Be careful about the liquidity of the managed fund if it is subject to traffic in and out.

Both Partner A and Partner B have an incentive to work this out. If plan monies were improperly distributed, the plan has an operational error that disqualifies it. So the money in each IRA is bad and they lose the deductions they took for the plan contributions. But who is going to threaten to report to the IRS and discover a bullet hole in his own foot?

You may have a breach of fiduciary duty. Loans should not be made to persons unless the lender reasonably expects the loan to be paid. If repayment is only through payroll deduction, it is rather dicey to conclude that a per diem employee will pay the loan. Perhaps the loan is OK if the employee has a long history of regular per diem pay that would support the loan. Or perhaps the fiduciary did a thorough asset, credit and cash flow analysis and expected to be paid from other sources if employer compensation was insufficient.

I accept R. Butler's "why ask for trouble" conclusion. It is not worth it to get into a touchy area. Sometimes we don't do things even if we can, especially with retirement savings.

Money is fungible. I defer $100 from my pay. On pay day, my 401(k) account is credited with $100. Does it matter if the source is the emplyer's payroll disbursement account or the plan's forfeiture account as the plan asset rules go? If you think it does, why is it different if my money purchase plan says I get an allocation of $100 and the source is the forfeiture account rather than the employer's bank account? The employer has an obligation to fund in both cases, so can the difference be employer use of plan assets? The timing rule for credit of deferrals is honored in the 401(k) plan. The employer's bank account is the same in both cases (the employer is "using" plan assets the same way in both cases). My account is the same in both cases. Could it be that forfeitures cannot be credited against against contributions of a different character? Then matching forfeitures could only be used for matching contributions, profit sharing forfeitures for profit sharing contributions, etc. If we don't have symmetry in similar circumstances, one looks for authority to explain why, however arbitrary that authority may be. I was hoping someone had a reference immediately at hand; there may well be such authority. There are obvious practical reasons for not crediting against deferrals. Such strict management of the forfeitures is an administrative burden.

R. Butler, please explain why not.

You need a competent lawyer to advise you, and that is probably not the lawyer who represented you in the divorce. The plan may have done something wrong, but that depends depends on many facts. You may also have a claim against the lawyer who represented you in the divorce, again depending on many facts. You won't be able to get a good answer from this message board.

Did you ask about how much trouble is generated by having the employer put its hands on the money rather having transactions conducted by the trust -- the owner of the funds?

Wouldn't there be some securities regulatory issues if someone was functioning as an investment advisor as an employee of an employer that was not an investment advisor? And would the plan being advised have an "investment manger" within the definition of ERISA if the person is employed by the plan sponsor? No comment as to other issues in the arrangement, other than the whole thing is stinky.

Any proscription on contributing "matching" contributions to a governmental 401(a) profit sharing plan based on participant deferrals to a governmental 457(B) plan? This would be similar to matching 403(B) deferrals in a 401(a) plan. I know that the 401(m) regulations say that the contribution is not a matching contribution if the "match" is based on the 457 deferral. But I cannot find a reason for disqualification. Government 401(a) plans don't need 401(m) to be able to contribute different amounts to different participants.

How does one "buy" vacation time pre-tax and why is that better than having unpaid vacation time?

I would love to know the authority that requires elections to be affirmatively renewed each year. While it may be the better practice to insist on new elections, I am not aware that evergreen elections are not permitted.

sborrow: Sorry to be so aggressive, but a notion so wrong as the one you hold needs to be wiped out like a disease. There are many threads that discusss this issue and the answer is certain. The 401(a)(17) limit does not require anyone to be cut back from a full $10, 500 elective deferral (the one possible exception is not worth discussing). Anyone who designs a plan to provide otherwise is incompetent and anyone who adminsters a plan otherwise is probably violating plan terms.

Everyone has a good story about something great that is/was done somewhere else and they use it as a reason to do something wrong in their plan. Usually the story turns out to be completely mistaken, At best, key details are missing.

As long as your plan document allows homes as security, you can do it. The mortgage can be in addition to the account as security. But this is playing with fire because the mortgage interest deduction rules are complicated, and 401(k) plans add an additional twist. I won't even tell you about that trap (and it is a big one) because you should not play this game without specific competent professional advice. I have seen lots of trouble because of a faliure to meet some requirement, whether or not the requirement related to the plan. Mortgage interest dedutions are on the IRS auditor's list for audits of personal tax returns and people who make mistakes get caught. Also, in the event of defualt, the plan will have to foreclose on the mortgage. Are your really ready to do that?

They can fix it (although it may not be as easy as some drone would like), and I think you have a good position that they must fix it. They will be better off fixing it before the end of the year. You should be prepared to cough up the money to go into the plan. If they don't fix it by the end of the year, depending on what is in the plan documents and other paperwork, the company may have to cover the deferral with its money and you get $10, 500 plus imputed earnings for free! That ought to motivate them to fix it now with your money.

Absolutely. The participant (a fiduciary for tax purposes, but not ERISA purposes -- and an affiliate under 404© regulations, so the 404© regulation protection from other Title I violations is not available) is personally benefitting because he gets an interest in property that he could not otherwise get without the investment of plan funds. You are correct that it stinks.

Add QDRO administration to your list of imponderables. The ERISA fiduciary has the QDRO responsibility, but no real ability to make sure that administration is carried out properly.

How does the good doctor think title will pass from the doctor to the plan? Start with the prohibited transaction rules.

Whether or not a plan accepts rollovers of any kind is optional and depends on the terms of the plan. A plan can accept some types and not others, if it chooses. A plan can choose to accept rollovers, but exclude certain features, such as loans or after tax amounts. If a plan chooses to accept a certain class of rollover, the plan administrator may usually reject a particular rollover for good reason, such as the belief that the plan sending the rollover is not qualified. Plans are able to amend to expand the scope of acceptable rollovers effective January 1, 2002. No further regulatory action is required, and the formal amendment can be be adopted within the remedial amendment period (by December 31, 2002 for most plans). But don't expect all plans to rush to the opportunity. I think that effective January 1, 2002 all eligible retirement plans have to provide direct rollovers to any eligible plan that will accept them, whether or not an amendment to that effect has been adopted by the distributing plan.