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QDROphile

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Everything posted by QDROphile

  1. QDROphile
    I agree with Golfing that imposing unnecessary discretion on a fiduciary is not optimal, but it probably is allowed as described. How does the fiduciary feel about it, assuming the fiduciary understands the implications and options? With respect to California Joinder orders, I deal with the legal travesty by treating them as domestic relations orders that require a full restriction, but advise in the notice of receipt that the determination of qualification will be delayed indefinitely unless appropriate instructions are delivered to the plan. That achieves the practical goal of the Joinder order and sort of stays within compliance with section 414(p). I have never seen any further communication until someone submits a pertinent domestic relations order (or draft). Then I spit, which is what I must do any time a Joinder is encountered. Recollections of "Beckett" for the literati out there.
  2. QDROphile
    "Use extreme caution" does not have much meaning. How about "understand the law and follow it"? Despite the the incorrect informal position of the Department of Labor, receipt of a draft domestic relations order is no basis for restricting rights of a participant unless the written QDRO procedures expressly provide otherwise and specify exactly what happens on receipt of a draft.
  3. QDROphile
    You need a new policy concerning discovery of a participant divorce. The law is quite clear about requirements and limitations relating to divorce proceedings and documents. For the most part, the plan cannot interfere with participant rights and privileges. The plan is required to act in a specified manner on receipt of a domestic relations order and otherwise is inviting trouble by getting involved.
  4. QDROphile
    By all means, press for an explanation in greater detail. You may conclude that pressing for payment is not productive, or worse. When a business is in dire straits, being forthcoming about its predicament can be harmful, so expect some hedging.
  5. QDROphile
    If you do not like your fiduciary breach up front, you get another chance when the fiduciary is faced with a decision about whether/how to collect the overdue payments. The fiduciary cannot ignore management of plan assets and must take reasonable steps to maintain plan assets. If the participant has an income, it is not an automatic decision that it is not worthwhile to pursue collection.
  6. QDROphile
    Flyboy: Do not overlook the Uniform Commercial Code.
  7. QDROphile
    It appears that the plan sponsor company has financial difficulties that are serious enough to make some desperate moves, and then some. You are probably entitled at least to an installment, but the company feels like it cannot pay without jeopardiing the business. This is a dilemma. If you press for payment, the company could slip into bankruptcy and you would get nothing, ever. But that could happen whether or not you press. You could go to the Department of Labor for assistance. The DOL is interested in ESOPs that do not pay on time, but the DOL has no solution to the dilemma of financial crisis and can just as well sink the ship by intervening. If I knew that the company were acting in desperate good faith, I would sit tight and hope against hope that the fortunes turn and eventually something is paid. But there is no way to adequately assess if the company is doing the best it can.
  8. QDROphile
    If the terms of the plan (which include the loan policy) and the terms of the loan allow for the participant to cease payroll deduction and cause the loan to default, the fiduciary will have breached its duty with respect to issuance of the loan. A loan cannot be made without a reasonable expectation that it will be repaid. A payroll deduction arrangement is a good mechanism to assure repayment, but not if it allows the borrower to elect to render this he arrangement ineffective. If there is no impediment to a borrower's discretion to repay, there is no commercially reasonable expectation of repayment. Lenders are not supposed to be a trusting lot.
  9. QDROphile
    If the plan is a defined benefit plan it will probably not allow a domestic relations order to provide for distribution before the plan's earliest retirement age. However, you got a QDRO that allows a distribution at participant's termination of employment, so the plan might allow other distributions outside of what is required by statute. With respect to your CALPERS question, it is unlikely that you can use your QDRO benefit to enhance your CALPERS benefit if the benefit is a defined benefit. If you can get a lump sum distribution under the QDRO, it is possible that CALPERS might allow purchase of service credit with rolled over funds. In all likelihood you are just going to have to wait for your benefit under the QDRO. You should check to be sure you are awarded an appropriate portion of the death benefit to make sure the Grim Reaper (or an incompetent lawyer) does not deprive you of a benefit if your former spouse dies before you start benefits.
  10. QDROphile
    No permission needed. The statement is in the public domain.
  11. QDROphile
    We are getting a little off point, but severance pay is eligible for elective deferrals unless paid after separation from service. It is not that unusual to pay a severance amount on the last day of work to allow the employee the choice, although the average Joe is going to maximize current cash if it is the last income expected for a while. If the employee is stepping right into the next job, the deferral may be desired.
  12. QDROphile
    The fact that the employee has suggested the term/rehire fraud now prevents an innocent term/rehire, wink, wink, nod, nod.
  13. QDROphile
    The fact that the employee has suggested the term/rehire fraud now prevents an innocent term/rehire, wink, wink, nod, nod.
  14. QDROphile
    What got me started was a provision in a good form of plan document that expressly covers the circumstances to make it clear that the compensation is included/eligible. The same document excludes severance. The issue is not so much a legal one as a plan interpretation question, but the plan has to be applied according to the facts, including actual employment status. With such an express provision, the employer and employee can get the outcome that is desired and fits the subjective intent. I have never seen another plan document with such a helpful provision set out clearly.
  15. QDROphile
    ETA: Your thinking is correct and preferable. It is still possible to have a plan exclude the compensation through some combination of definition of compensation and employer characterization of the end of service. It is not always saying anything terribly interesting to remind about checking plan terms.
  16. QDROphile
    Unless the plan says otherwise.
  17. QDROphile
    The statements about paying by check make no sense. Are you suggesting a payment of the amount outside of the plan from the participant's personal funds? The early distribution "penalty" tax does not apply to distributions to alternate payees under a QDRO.
  18. QDROphile
    You need a better understanding of what a "lock" because of a domestic relations order entails. There really is no such thing, although most of the time the concept/practice does not cause any harm. You may also need to see how section 401(a) (9) works with respect to a benefit that is subject to a QDRO.
  19. QDROphile
    The tax code is quite specific about can be rolled over into a qualified plan. If there is a treaty that provides an exception (so highly doubtful that I am surprised at the suggestion, but it is based on legitimate principle), a plan administrator has no duty to investigate. The proponent of the rollover must present the argument and the authority. Even then, the plan terms probably might not allow the rollover even if the law does. The plan terms will track the code language and definitions quite closely and the tax code is quite specific about can be rolled over into a qualified plan. Unless the sponsor is willing to amend the plan, the tax treaty would have to be phrased in a way that coordinates with the tax code/plan language.
  20. QDROphile
    The plan says what the plan says and either interpretation is legal. Although I bristle at the idea of the payroll service rather than the plan administrator determining the meaning of plan terms, conformity with the payroll practices is often a necessary evil. The solution is to amend the plan so the terms clearly fit the practice. Oh, wait. I forgot. Nobody has plans that they can amend for language any more. The solution is for the plan administrator to adopt a written interpretation that reconciles the plan language with the payroll practice.
  21. QDROphile
    The plan administrator is responsible for interpreting plan terms. If the question is limited to deferrals, for a practical answer, one should look at how the payroll system functions with respect to application of the deferral election to the compensation for the extra hours.
  22. QDROphile
    Is the gift card taxable income? It is not a gift. How is it being reported.?
  23. QDROphile
    Someone suggested that the term is a mistaken hearing of "big league" which can be used as an adjective. Mind you, I am not trying to be an apologist or a language reparer.
  24. QDROphile
    The concept of control under 403(b) is well developed, although there are some difficult questions. A participant can "control" a nonprofit employer. The average employee does not.
  25. QDROphile
    Yes
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