QDROphile

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.

Who gets the refund depends on who paid the charge.

Though all day might be considered a slow crash. The EBIA Cafeteria Plan Manual has a preferatory summary section that would be the outline for a crash course. My intent was to express skepticism that adequate professional competence could be gained by simply attending a crash course, even the Cadillac of programs.

If you think the EBIA all-day cafeteria plans program is not a crash course for someone who wants to get paid for any aspect of plan administration, then give up the illusion that you can handle plan administration. Attending the course would be introductory training.

Why is the plan trustee's lawyer asking you a legal question about plan assets? Are you a lawyer for the plan or plan sponsor? The trust instrument controls, but if the Trustee has authority to manage plan assets, the trustee should be responsible for carrying out the transactions proposed by the trustee and complying with applicable law in the process. That includes hiring the expertise necessary for the transactions and compliance with ERISA.

Except for the 50 percent threshold under section 415, which probably will not affect anyone.

Still worth shaming. The misuse of terminology creates a quantitatively and qualitatively different impression and an appropriate impression of what is involved is important from the very beginning of contemplation of the action.