QDROphile

#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.

Absolutely not. It would be a breach of fiduciary duty to interfere with exercise of a participant's rights unless the plan has received a domestic relation order. However, check the plan's QDRO procedures. Some plans have adopted procedures that go beyond the requirements of law that must be taken into account. The DOL informal position on the subject is incorrect as a matter of law. Check the statute. The applicable court decision interprets it literally.

I agree that the DOL was self serving and disingenuous and does not want to expand its enforcement over small nonprofit employers.

No plan can comply with the 403(b) requirements and the "non-ERISA" requirements. One may take comfort that the DOL will not go after a plan that carefully threads the needle of the embarrassing DOL guidance.

1. What does the plan say? 2. Rethink your comment about the match and see #1. 3. Are you new to this business? The interplay between the compensation limit and the deferral limit was mildly interesting for a while, but that was years ago.

While you are correct that it relieves a fiduciary of some potential liability to appoint another fiduciary to be responsible for a function, the practical value of the appointment depends on the function. Pure custodial responsibility is not a liability-prone function, which is why being a directed trustee is nice work. The appointing fiduciary also must be prudent in choosing the appointed fiduciary and must monitor. We are not sure what monitoring means in many cases. The DOL will almost always charge the appointing fiduciary with failure to adequately monitor when the DOL charges a breach of fiduciary duty.

But what about participants who are former employees?

All of the responses assume that cash is rolled over. Taking stock is another matter, but might be accommodated if the plan were sure that the stock would be immediately "put" for 100 percent cash, and not for cash plus a promissory note. Nonetheless, a 401(k) plan could accommodate everything.

Has somebody determined that the LLC can maintain an ESOP?

If the documented and court-approved terms of your divorce included your right to some portion of your former husband's retirement benefit, and nothing has changed since (your remarriage is not a change unless the terms of the divorce provided for remarriage to change matters), then you still have that right. In order to get the benefit as a matter of right from the plan itself, then you must have a court issue a domestic relations order that satisfies certain legal requirements and submit the order to the plan administrator. If the order satisfies the requirements, the plan should determine that the order is a "qualified domestic relations order" -- a QDRO -- and should pay you benefits directly. Among the requirements for qualification are a description of the benefit awarded to you in your divorce. The plan is required to have written administrative procedures for how it processes domestic relations orders and how it determines if an order qualifies. You are entitled to get a copy without charge upon request to the plan administrator, and you or your lawyer should do that. Obtaining a domestic relations order that will qualify involves a legal proceeding, preferably in the court that handled your divorce, and the qualification requirements for a pension plan are baffling to some people, including many lawyers. It would be best to have the assistance of a lawyer with experience with QDROs. There is a remote possibility that the extreme delay in obtaining a QDRO will compromise your rights under applicable state law. Also, if your former husband retires or dies before you obtain a QDRO, your rights will be negatively affected.. Do not delay another moment. This is getting a bit technical. but submitting your divorce decree with the plan will protect your rights in certain ways while you go about preparing the QDRO document. Submitting your divorce decree to the plan will not get you any rights to benefits. Be prepared for the plan to be stupid and unhelpful, but that is not always the case.

No plan is required to have a determination letter. The issue now is the ability to get one to get comfort on substantial provision changes.