QDROphile

You don't have a deemed distribution. You have an offset distribution to the beneficiary, who is responsible for the taxes on the distribution, which includes the amount of the loan.

Don't mess with sham terminations.

You might fit under section 401(k)(10) if the Branch Operation could be itself a trade or business and substantially all of the Branch assets were acquired. Check the letter rulings for what constitues a separate trade or business.

Why bother with a SIMPLE? A SEP is easier and can get you the same thing and more as long as there are no other employees.

Though there are probably exceptions, if the employer is simple enough to need a simple 401(k), the employer should not have employer stock in the plan. If the employer is an exception, it will already have access to the answers through its regular legal counsel or other professional advisors.

Depends on what the QDRO says and possibly what the interpretation policies are, as set forth in the plan's written QDRO procedures. Generally, if a QDRO awards an alternate payee a portion of the benefits accrued during a period and the plan upgrades the benefits accrued during the period, the alternate payee's portion of the benefits would be upgraded unless the QDRO provides otherwise. If an alternate payee is awarded a percentage of each benefit payment rather than a portion of the accrued benefit, you get a similar result. But it is ultimately a matter of interpreting the plan and the QDRO.

While I am a big fan of close and literal readings, I don't think the Notice requires using age and service requirements that are both below the statutory minimums in order to disaggregate. That would be rather tricky and the IRS should be more forthcoming if they really mean it that way.

Check Rev Proc 98-22. In Walk-in CAP you may be allowed to amend the plan retroactively to conform to prior administrative practice. You might have some luck in VCR, but not with the conforming amendment. The VCR correction would be to write a letter to the alternate payees and request that they return the contribution, perhaps warning them that the Form 1099 will report the distribution as nonrollable, but not pursuing the return. Call the VCR people first to get some guidance. A plan must have express provisions if it wishes to permit alternate payees to get distributions before the former spouse participant is eligible.

It is better practice to treat alternate payees who are also participants the same way that nonparticipant alternate payees are treated. So an account or subacount separate from the alternate payee's participant account should be established. The rules governing alternate payees are different and the QDRO may have terms that cause the QDRO money to be handled differently. Examples: Alternate payees are not subject to a 10% tax on withdrawal of QDRO money before age 59 1/2; alternate payees usually can get a distribution right away (the alternate payee, as a participant, may not be able to get in-sevice witdrawals); alternate payees often must start distributions when the participant starts; if the plan has a j&s annuity distribution option, the QDRO money can't be distributed as a j&s annuity (unless the former spouse is the named survivor beneficiary, which is unusual). Depends on what you mean by commingle, but the plan had better be able to identify the QDRO money and its related earnings.

Rollovers are not subject to in-service distribution restrictions. If the plan terms allow, they may be distributed upon request without need for any justification. But watch those plan terms!

Department of Labor Advisory Opinion 94-32A says that a charge may not be imposed "in connection with *** administration of a QDRO."

But the IRS has hinted that it does not follow a de minimus rule when a plan has nongovenrnmental participants.

Look at Treas Reg section 1.415-8, and paragraph (d) in particular.

You are getting into a matter of document interpretation and questions of intent. But for my money, you can have unvested accrued benefits the same as you can have unvested account balances. From the point of view of a plan administrator, a DRO is never incorrect. It is either qualifed or not. Whether or not it delivers what the parties want or intend is irrelevant, although it creates trouble for the administrator when a party is frustrated.

A firm called Judy Diamond (Associates?) in Washington, D.C. will confirm or obtain filings. Don't have contact information handy.

Start with the prohibited transaction rules. The theory is that the company made use of the assets while they were plan assets.

Whether something is a domestic relations order or not is a matter of state law and procedure. While it is conceivable that an unsigned oder or an order signed by a clerk is a domestic relations order, unless you are sure as a matter of applicable state law that the order is OK, don't accept it. It is good practice to require a copy of a DRO be certified by the court (or court clerk). A filing stamp, with a date or not, is not much assurance that the court has really issued the order. Mosk clerks of court will file anything that is put across the counter. Filing, by itself, has little or no legal meaning.

Speaker is wrong on both, if you have captured the full extent of the message. I'll go one further. We get correct determination letters on profit sharing plans that have J&S distribution options but no spouse consent if the participant gets a lump sum or installments! The normal form of distribution is lump sum. The spouse consent requirements are not triggered until an annuity option is elected. If the participant does not elect an annuity option(e.g. elects a lump sum or installments), no spouse consent is necessary for the distribution. But you might have to walk the reviewer through Treas Reg section 1.401(a)-20 Q&A(3)(a), because some of them are not aware of the rules. The plan stills need spouse consent for designation of a death beneficiary other than the spouse.

If you have pre-TRA 86 after tax money and the proper plan provisions you can do all sorts of wonderful things with loans, including exceed the $50,000 limit. And perhaps that can be done to some extent with post TRA-86 after tax money.

The money isn't tainted. The participant is. If the participant has a certain status, the participant cannot have a good loan while the partipant has that status, no matter how the loan starts. That is why a person who has a good loan has a problem when the S ownership interest crosses the threshold or the C corp changes to an S corp. The good loan goes bad.

Your message is very sparse, but I will rely on some inferences. It sounds like your divorce decree awards you a portion of retirement benefits of your former spouse. You will get nothing from the retirment plan under any circumstances unless the plan adminidtrator is given a domestic relations order (DRO) that meets the requirements to be a qualified domestic relations order (QDRO). Your divorce decree by itself might be a DRO that meets the requirements, but it probably is not. If the plan administrator is given a DRO, the plan administrator is required to notify you if the DRO is a QDRO. If you don't have such a notice, assume you do not have a QDRO. If you have a QDRO, you might get something or nothing if your ex-spouse dies before you start getting benefits. It depends on the plan and on the terms of the QDRO. If the plan is a pension plan that provides for payments for life after retirement, there is a great risk that you will get nothing if your ex-spouse dies before benefits start unless the QDRO has exactly the right terms. Because of the likelihood that you do not even have a QDRO and will get nothing, no matter what happens, you should get assistance to help you understand what you have and what you need to do to protect your interest in the retirement benefits. Although a lawyer who knows about these matters may seem expensive, all of the potential payments to you from the retirement plan depend on getting things right.

More information is needed. Chester's answer is probably correct for a defined benefit plan or money purchase pension plan. But if the plan is not subject to the J&S rules, it could be OK.

I agree with greymann that a domestic relations order may be disqualified if the order provides for payment to a person who is not within the definition of "alternate payee." However, (i) the ability of an AP to choose a form of benefit under the plan that provides for payments to a survivor and (ii) the ability of a plan to allow or disallow an AP to designate a beneficiary for payment of the balance of the AP's defined contribution plan subaccount upon death of the AP are separate matters. A long discussion of those mattters is in order, but I haven't the energy. I cannot resist taking a shot at the statement from Benefits Briefs noted above. The brief discusses a case that by its own terms is restricted to a limited situation. Generalizing from the case without further analysis is risky and sloppy. Also, the reference to the proposed section 409(a) regulations should say that the designation MAY violate the minimum distribution rules. Those same regulations describe compliant situations that involve the beneficiary of the alternate payee.

P.L. 93-406 (ERISA) added section 408(a)to the Internal Revenue Code, effective for taxable years beginning after 1974. That is as far back as I have traced.

The QDRO rules do not prevent a QDRO from providing that an alternate payee can choose any form of benefit allowed under the plan, including a J&S annuity, even when the contingent annuitant is the subsequent spouse of the Alternate Payee. An almost universal misreading of section 414(p)(4)(A)(iii) of the Internal Revenue Code is responsible for the almost universal misimpression that an alternate payee may not have (or the plan can prevent the alternate payee form having) a J&S anuuity with the AP's subsequent spouse as the contingent annuitant (except in the limited circumstances described in that code section). The "QDRO Answer Book" by Panel Publishers gets it right.