QDROphile

"IRS will allow just about anything" Does that include doing nothing other than not truly doubling the contributions, as suggested by the post (although I don't really understand what "change the effective date" of the deposit means)?

Are you not worried about the risk to the employer, such as disqualification? Disqualification would not serve the participants very well, either.

A former spouse gets nothing unless provided in a QDRO. Unless the participant dies before the plan determines the QDRO, the QDRO can invade the "rights" of the second spouse. The formula you describe is conventional and is not regarded as overreaching with regard to the second spouse. This a bit complicated, and one could quarrel with the articulation, but you, as subsequent spouse, do not "vest" with repect to a QDRO until the participant dies. As a matter of value judgment on my part, you have nothing to complain about if the former spouse is awarded half of the benefit accrued during the time of marriage to the first spouse, including the survivor benefit that goes with that half. To get closer to your question, the terms of the QDRO determine the disposition of the survivor benefits. As subsequent spouse and designated beneficiary, you have all of the survivor benefits that are left over after the QDRO alternate payee's survivor benefit (as expressed in the QDRO) is honored. You may have some portion and the former spouse may also have a portion.

You may have a question about whether or not the persons are properly classified. Are they common law employees who should be getting a W-2 rather than a 1099? If the employer is inclined to allow participation, it may be from a gut feeling that they are more like employees than contractors, and that gut feeling may be borne out of a relationship that IS an employment relationship (based on the applicable factors) rather than a contractor relationship. Misclassification is also a problem if they are common law employees and not effectively excluded by plan terms. See plan section 2(c).

One aspect of what Mr. Preston is saying is that a revision to a property settlement in a divorce is first a matter of state domestic relations law that must be addressed before anything "QDRO" is considered.

Monetary damages are rare under ERISA. The usual remedy is to put participants in the position that they should have been absent a violation. In technical terms, ERISA looks to equitable remedies rather than legal remedies (damages).

However it is accomplished, it must be remembered that the benefit is the participant's benefit to which the beneficiary is entitled. It makes a difference and it makes a difference if the beneficiary is the spouse or someone else.

Was there supposed to a distribution? Was there a sloppy use of the term "transfer" to mean that the plan will now recognize the beneficiary as controlling the benefit, including determination of timing of distribution? Plan terms will dictate when distributions to beneficiaries must occur. Do not presume immediate distribution. I venture that it is common allow spouse beneficiaries to maintain the account of the participant subject to the limits of the required distribution rules.

No early distribution tax on distributions pursuant to QDRO. The AP is trying to receive a distribution in a form that appears to be unavailable under the plan, although the original poster has not provided adequate information about plan terms; this is all about plan terms.

Subject to a reading and understanding of all the plan terms, it would be reasonable to interpret the plan to allow a disclaimer. I venture that few plan administrators are both capable and familiar enough with plan terms to make a solid determination. I also doubt that it is a high risk proposition.

Class warrior; can't be helped. I am not always successful in getting the optimal result, but I have had the privilege of working mostly with enlightened and caring clients. I also recommend against plan loans, but I get the proposition that people will be more likely to save if they think the funds do not become totally inaccessible in the short run.

The original employee benefit provided for loans and the employees relied on it for life planning. The loans could have been preserved and operated as intended after the corporate transaction, but the employers did not think enough of the affected employees to go out of the way to avoid the adverse effects of pulling the rug out. Just because a lot of employers do the wrong thing does not make it any less insulting. Both the former and current employers are at fault., and the affected employees ought to know where they stand in the eyes of the new employer. Mostly they are ignorant and do not realize the the new employer made a choice that affected them adversely and "LOTS of employers" rely on the ignorance to duck the criticism they richly deserve. And we can agree to disagree, but it would be best to take positions based on full knowledge by all involved.

One thing can be determined for sure. You got screwed by your former employer and your new employer. You should have been allowed to roll over the loans and maintain them in accordance with the original expectations . It was not a legal right, but it could have been provided for by your employers who did not give you much consideration. They just did not want the bother. Spread the word among the transferred employees. Anyone with a loan got the shaft the same way you did.

The statutes say that, in order to be qualified, a domestic relations order must state the mailing address of the alternate payee, NOT the last known mailing address of the alternate payee (as commonly misapprehended, including by that QDRO-incompetent organization, the Department of Labor). If the statutes say that the mailing address must be stated in the order, I think a good argument can be made the overlooking the terms of the order and using some other address available to the plan (a "last-known address"?) is unreasonable. The plan administrator is also charged with administering a QDRO in accordance with its terms. I am not arguing that the delay discussed in this thread is cause for liability.

First tell us what practical effect the delay had for the AP, other than the formal ability to request benefits two week earlier. Practical effects of a delay in application for benefits might count. Absent unusual circumstances, a two week delay in proper delivery has no legal effect. No alternate payee can ever get payment fast enough.

A#1: There is nothing you can do about it except to understand what the QDRO provides and make sure it is administered correctly so you receive the correct benefits for a subsequent spouse of a participant subject to the QDRO. A#2: You can can talk your spouse into having the QDRO modified, which is unlikely to be entertained by the court. See A#1.

I think your second sentence is operative. It is a matter of interpreting the plan because operation of the plan, such as beneficiary designation and consent by a spouse to the designation of a different beneficiary, must be consistent with plan terms. It would be OK for a plan to provide that no post-mortem consent is allowed I would not describe plan interpretation as exercise of discretion on a consistent basis, but we need not take up that point,

20 years of consistent approval by the IRS of real volume submitter documents and custom documents. I did not go back to the original source that gave rise to the proposed terms for submission to the IRS

Question 1: A designated or default spouse beneficiary can consent post-mortem to the pre-death designation of a different beneficiary. The designations and the consents must be in accordance with plan terms and procedures. That means that post-mortem consents are dicey without an express plan provision or at least a formal written procedure. It pays to have smart plan documents, which precludes most pre-approved plan documents. And now custom documents are problematic because the determination letter program has been closed and the general competence of IRS personnel has declined.

So do you buy into the DOL sop generally, and it is business as usual after the 403(b) tax regs in determining whether or not a 403(b) plan is subject to ERISA?

While I agree with the conclusion, do you distinguish payment of settlor expenses, such as establishment of the plan and adoption of a plan document?

Clarification. My question related to the difference between a discretionary payment by the employer as opposed to a contractual obligation to pay. My question did not relate to what expenses were eligible or not eligible.

Where do you get the "if the plan says the employer will pay all expenses ..." stuff?

A healthcare FSA is a health plan that is subject to ERISA notwithstanding that is is mostly a tax trick. Neither A dependent care FSA nor a "premium conversion" plan are subject to ERISA. They are tax tricks like a healthcare FSA, so they are often documented together. The healthcare plan that is funded through the premium conversion plan is subject to ERISA. The healthcare plan is usually documented separately from the premium conversion plan. What constitutes a "plan" or a "plan document" for ERISA purposes is rather fluid and does not depend on pieces of paper in a single stack or avoidance of pairing with terms of an arrangement that is not an ERISA plan with the documentation of the ERISA plan. A healthcare FSA and a core healthcare plan can be separate plans or can be components of a single ERISA plan and the single ERISA plan can be composed of two or more documents or a singe document However, the terms of each written component of an ERISA plan should state what the component is and what plan it is an element of. Some document (usually the wrap document) should identify all the components of the ERISA plan that make up the single ERISA plan. Any plan should stat the plan year. I think the original post is asking if a component of the MEGA ERISA plan can have a different plan year than the other component(s). I think the answer is affirmative, but I am not certain enough to simply assert that conclusion.

Perhaps this is just being picky; it does not address the crux of your question. The following does not make sense: "the FSA Plan is not deemed as a policy". The following indicates a conceptual error: "the FSA ... cannot be bundled with an ERISA Plan". A healthcare FSA is an ERISA plan (subject to things like the employer not being subject to ERISA. This may be more just loose composition than a misconception that is causing confusion. If your Mega Wrap Plan is being treated as a single ERISA plan, what would you state as the plan year if one component (healthcare FSA) does not have the same plan year? Does that touch on your question?