QDROphile

Unless the plan says otherwise.

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.

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.

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.

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.

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.

Is the gift card taxable income? It is not a gift. How is it being reported.?

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.

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.

Yes

#2 and #3 can be an issue depending on the surroundings, and particularly any terms relating to disposition before termination or attaining a particular age. Check the definition of pension plan.

1. Yes, there are restrictions and Peter Gulia described an exception to a potentially applicable restriction; the exception usually suffices to enable investment in mutual funds without any investigation other than the usual concerns about prudence (which include investigation of costs and fees). 2. The investment company is the "fund" so assets of the investment company are the securities held by the fund. Investment in the "fund" is accomplished by buying shares of the investment company.

It is almost universal that (1) insurance companies tell their clients that the insurance booklet is the SPD, and (2) the insurance booklet does not comply with the SPD disclosure requirements. Even if the substance of the insurance coverage is adequately summarized (or presented, if the booklet is also the plan document), the booklet is typically deficient in procedural and formal aspects. The plan administrator can supplement the booklet to cover the missing material. That is not a bad thing, because the exercise will force the plan administrator to think about the claims procedures and compliance with the requirements for claims procedures and who is the fiduciary with responsibility for adjudicating claims.

The claim for payment of benefits should be prosecuted under the plan's claims procedures. Those procedures will inform who is to be adjudicating (probably the plan administrator) and how to proceed.

I have felt many times like giving a heavy hit to a heavy hitter broker.

Some thoughts that may help or just make it harder: a plan is not required to allow a change just because the change is allowable under section 125. Off the shelf cafeteria plans are usually designed to allow any change that the law allows, but plan administrators still have the authority to interpret plan terms unless the plan says otherwise. Plan terms matter, not only the 125 plan, but the health insurance plan. However, health insurance plans are subject to mandates, such as HIPAA, that 125 plan are not

Make sure the plan allows distribution of the small amounts to an IRA. Your description raises questions. A prohibition might arise from negative implication. The plan administrator is responsible for interpretation.

Anyone who wants to do an ESOP on the extreme cheap has conclusively demonstrated that the decision to have an ESOP is a bad decision. ESOPS are such trouble that the high price tag is a screen against misuse. If you cannot accept the idea of a high price and engagement of competent advisers and service providers, then you are taking serious risk going forward with an ESOP, and not just legal risk.

Elective deferrals are governed by contract -- the plan document, and most plan document are really lousy contracts. The appropriate order is determined by thoughtful consideration, another failure. Finally, cheap inflexible payroll systems and providers, by contract, can interfere with thoughtful efforts to achieve a desired goal. Payroll systems and providers are the bane of plan administrators and designers. Setting aside extraordinary compensation from the conversation, it makes sense to give priority to elected health coverage payments and nonelective health coverage payments will certainly get priority. But the payroll provider should not be the one to decide in an ideal world. And not matter what, the plan document should address sources of contributions as a separate matter from definition of compensation. Try to find a prototype provider that does.

Following Lou S, what is the fee? Is it a fee applicable to every distribution? Or is it specifically a fee related to QDROs, as sort of suggested by your report on what the SPD says. If the fee "may" be charged ... , then who decides whether or not it is charged or charged to the participant's account? Looks like the plan administrator will have to interpret the ______ language of the SPD and answer all the other related questions.

Not necessarily. A typical pension is based on an annuity form of benefit and it is possible that your age (and the alternate payee's age) are relevant to the calculation of the payment amount.

By the way, competent disclosure/election forms will warn a participant to confirm with the new plan that the new plan will accept rollovers (direct or indirect). Bumbling by the new plan or the participant is not the distributing plan's concern.

Not really a direct response to your question, but the error was communication with the participant. Because rollovers are so confusing and susceptible to changing minds, disclosure is prescribed and dialogue or assistance beyond delivery of the disclosure and a competent election form reverts everyone to the bad old days of mind reading and misunderstanding. Under ERISA, one lives and dies by the formalities.

Hooray for your boss on two counts.

My 2 Cents Is correct about the formal ERISA. claims procedure, described in the SPD, as the avenue for resolving the matter. Start with a formal written claim and you will get serious attention. If not, the fiduciary is in for a lot of trouble and payment of your legal fees if you ultimately go to court. I venture that if the plan screws up enough on its response to your formal claim, you can get a layer to take the court work on a con tangent fee for the lawyers' fee award.