QDROphile

A rollover is not a form of distribution. It is what one does with a distribution. Rollovers are not permitted with certain forms of distribution.

Fair enough. What are you trying to accomplish with respect to economic responsibility for the benefit? The alignment of payment responsibility with respect to each participant seems to be a determining issue. Assuming you have a free hand with the documents, separate documents for every subsidiary are not necessary, but provisions that identify what the benefit is for each participant, when the benefit is paid, and which employer is responsible for paying each participant are necessary. Remember that for many analytical and compliance purposes, each participant has a plan, but no one is worried about having a document for each individual plan. You can document that in one collection of pages or in multiple collections of pages. Adoption agreements may work for economy of paper and administrative efforts and mental organization, but the adoption agreements will probably need individualized terms to deal with whatever variations apply, such as which employer if responsible for paying the employees. NQDC plans are not as sensitive to formal requirements as qualified plans.

What you describe about the use of rabbi trusts is more or less correct. I am concerned with the less part for someone who is offering advice or information. The confusion in the terminology employed is a sign of a less than full technical understanding of the applicable principles and the law. If you are using the phrase "substantial risk of forfeiture" to explain anything about rabbi trusts, you are wrong. If you are serving up rabbi trusts to explain substantial risk of forfeiture, you are wrong.

You should ask the professional adviser who has responsibility for compliance with section 409A of the Internal Revenue Code. Even if you are not trying to achieve the answer for the employer yourself, you will have to consult that person before any final decision are made, so you might as well take the shortcut to where you need to go.

A grantor trust (rabbi trust) addresses the requirement that a benefit be unfunded. Risk of forfeiture is another matter altogether and risk of insolvency is not generally a substantial risk under section 83, section 457, or or section 409A. If you are not very clear on the concept, then you should not be dabbling in nonqualified deferred compensation unless you believe that lack of enforcement with protect against shortcomings. The field is complex, the stakes are often high, and the cost of failure is substantial.

The terms of the trust should specify whether or not matters such as proxy voting, tender offers ,and other shareholder matters should be handled by the legal owner (trustee) or another fiduciary or passed through to the beneficial owner (participant). If passed through to the participant, the participant would then direct the trustee concerning any action to take or not take with respect to the matter.

What is the concern with the taint? Whether or not the plans are merged, unless it is a very unusual problem, the correction is the correction is the correction. Whatever is broken, which is now defined and quantified, will be fixed. The amounts in question and the affected participants will not change because the form of the plan document changes. What does freezing the disqualified plan accomplish? Or is there a concern that the plan will not be able to get IRS approval or implement properly the correction?

If he is not going to sign, then delete the signature lines. You are either going to court with a request in which you both agree to issuance of the order in the form presented (sometimes called a "stipulated order" because both of the parties have stipulated that the order is acceptable) or you are going by yourself without assent of your former spouse. With assent of both parties, the court will almost certainly approve without further consideration. Without the assent of both parties, the court may inquire into the history and terms of the the prior judgments and orders in the domestic relations proceeding and my require formal notice to the former spouse and opportunity for him to appear to contest the proposed action. The deletion of the signature lines is not a big deal if he is not going to sign. Having a form with the appearance of unfulfilled requirements or unfinished business just asks for questions and is unsatisfying. This is all about court procedure and nothing about the substance of the order or the fine points of form of the order, except for the court's inherent curiosity about whether or not the terms of the order are proper in light of the terms of the property settlement. Assent by both parties resolves the question. The retirement plan has no knowledge about the court procedures and considerations. Most of the plan's model document involves matters that have nothing to do with qualification of the order or following local court rules and procedures. You should press on. If he remarries or dies before your interest in the plan is secured by a QDRO, that interest may be compromised. And that reminds me to warn you that the plan's model document may not be adequate to provide you with the expected benefit under the plan. Fifty percent of the benefit seems like a simple concept, but there are other important matters to address, especially under pension plans. The plan's model was not drafted for your benefit. If anything, models tend to favor participants. I repeat my recommendation for competent legal help, even if the idea of paying again is painful. Addendum: The model QDRO is probably OK if nothing unusual happens: You get the QDRO squared away before the participant dies remarries, retires, or dies, and you do not start benefits before the participant retires early with a subsidy. On the other hand, unless you hire a lawyer who is competent with respect to these matters, the lawyer will not understand the technical aspects of these concerns and will do you no good. The average divorce lawyer is not competent with respect to pension plan QDROs. You might be losing nothing or not much if the the unusual matters are not addressed properly, or you might lose everything. For example, if the participant dies before you start your benefit and the order does not expressly award you an interest in the plan's death benefits, you could get nothing from the plan. And this has nothing to do with signing the order.

You are asking a question that is answered by state law and court procedures and the terms of the documents in your divorce proceeding. The matter is also complicated by the 10-year delay in addressing the resolution of the assignment of an interest in your former spouse's pension. It is not possible for you to get a definite answer from this board. You would best be served by some assistance from a competent lawyer. If you are determined to handle this yourself, you could submit your proposed domestic relation order to the court and with the assertion that the substance of the order has already been resolved in the earlier proceeding, as shown by the rulings that have been adopted already, and the proposed order simply satisfies the formalities for qualification as required by federal law (and as accepted by the plan). If the court refuses to issue the order, it is likely that the judge will explain why not and what may be required to get the order issued. PS: You did not state if the line for the former spouse signature is from a sample from the plan or from a court source. If it is only from the plan, delete it before you submit to the court with a request to the court to issue the order "ex parte," which means without the participation of your former spouse. Usually court clerks will help with the procedures for submitting an order for a court's consideration. Signature of the participant is not a legitimate requirement for qualification as far as the plan is concerned. It is another matter with respect to the court. Courts prefer to take action in accordance with the agreement of both parties. You may be in for a rougher ride if your former spouse contests something about the order, even if only the10-year delay.

The plan document should always accurately specify how the plan operates, preferably with more than a simple reference to the Internal Revenue Code or regulations.* If plan terms are more restrictive than the Code allows (but not inconsistent with the Code), the restrictions are effective. *With respect to many formal requirements, especially for ESOPs, a mere reference to compliance with a particular Code provision is legally inadequate for qualification

I agree that a close look at the documents is required. Respectable documents will describe transitio of individual fiduciaries and the scope of their powers and responsibilities. This organization also needs some general advice about the corporate and fiduciary relationships. Jane's head does not seem to be in the right place in terms of the appropriate roles, functions, and responsibilities.

I am dismayed by the question, but I will spare you (sort of) a diatribe about what you should know if you are in the business of providing QDRO administrative services. Assuming this is a defined contribution plan: 1. Plan administration is an expense of the plan. QDRO processing is part of plan administration. Administrative service providers have contracts with the plan (although many inappropriately have contracts with the plan sponsor in its role as plan sponsor) that address payment for services. 2. Plan expenses can be paid in various ways, not all of which are appropriate. Expenses of QDRO administration can be paid: (a) As a general expense of the plan, allocated proportionately among all accounts. (b) As an expense of the affected account, allocated to that account.* © By the plan sponsor, either directly to the service provider or as a reimbursement to the plan. (d) Maybe other ways. 3. Payment of plan expenses should be addressed by plan terms. For example, if expenses related to an affected account are charged to the account, the plan should have provisions that say so. If QDRO expenses are charged to an account, the plan administrator can decide as a matter of written QDRO procedures if and how expenses can be allocated between participant and alternate payee and if options are allowed (e.g. it may be specified in the QDRO), the QDRO procedures should have a default in anticipation of the QDRO failing to specify. So what does the plan say? What do the QDRO procedures say? 4. As between the plan and the service provider, what does the service contract say? I think the the best arrangement is that the plan pays the service provider but the sponsor has the option to step in to cover the expense. Arrangements between the plan and the sponsor about payment/reimbursement are separate. the participant and alternate payee should have no relationship with he service provider (but see below). the allocation of the charges between the participant and alternate payee are handled within the plan and the service provider is indifferent; so is the plan sponsor if the plan sponsor ultimately pays the service provider. Although it may be legal. I do not recommend having the participant or participant/alternate payee pay from outside the plan, either to the plan or to the service provider. *The Department of Labor, in its long standing-tradition of getting everything QDRO wrong, used to assert that allocation of QDRO administration expenses to the affected account was inappropriate.

It is uncommon because of administrative complexity, such as monitoring for delinquent payments, and the ability of a participant to elect to default. There is nothing wrong with payment arrangements other than payroll deduction, but they increase potential concerns for the fiduciary..

Do not pass GO and go ..... .

If the plan still has the funds, I would allow a subsequent order that meets the requirements for a QDRO and says it is modifying the original order, to modify the original order to the extent feasible, including reversal of the assignment and the transfer to the account for the alternate payee. This is a rare circumstance in which Humpty-Dumpty can be reassembled and I would allow the "correction" of the original order.

If an employer actually sets aside funds to cover the nonqualified deferred compensation obligation that accrues, those funds belong to the employer and the employer can do whatever it wishes with the funds, subject to any contractual (including trust agreement) terms about disposition of the funds. If you mean "can be prohibited" against its will, no. If means other than an appropriate grantor trust are employed to protect or secure the set-aside assets for the benefit of the particpant, the benefit may become taxable.

The plan and trust document provisions will determine the operation of the FSA and the application of the trust. Mind your words, be they expressed in one collection of pages or in several collections of pages.

1. The owner should be notified of the subpoena and the intent to furnish information so the owner has the opportunity to quash the subpoena -- which is most likely to fail if attempted. 2. Subpoenas are served on persons who are holding information. If the subpoena was delivered to the TPA, the presumption is that the intent is to obtain information held by the TPA and that would include plan information. It makes no sense to play games about scope. The source of the issuance of the subpoena should be contacted to determine and clarify what is actually desired. Usually a subpoena asks for far more than the target information for fear of missing the target and discussion and cooperation will narrow the request as well as allow more time and avoidance of appearance. A typical subpoena commands the record keeper to appear at a time and place and bring the documents. A cooperative approach usually results in sending copies of selected information in a reasonable time rather than showing up with a lot of unnecessary and unwanted documents. If you try to be cute and withhold information in possession on some technical or interpretive basis, you will at a minimum just get another subpoena. If the plan information is what is desired, ultimately it will be turned over. If there really is information that has a legitimate basis for protection, the owner should be the one who knows. See #1.

You are more likely to get helpful comments about technical aspects of QDROs on this board. For my part, issues about what is fair with respect to dividing assets or not are not matters that have answers that can be given from afar. Fight about that in local court. As to the technical issues, the stream of retirement payments for your life can be divided prospectively any way the court approves, including initial payments that are increased for some time to make up for past payments that were not divided. Yes, you can argue that the delay that caused those payments to slip by without division is the former spouse's fault and it is unfair to go back and retrieve them, but the federal law about QDROs is indifferent to fairness. That is a matter of state domestic relations law and a competent local lawyer is your best bet but will not be able to perform magic.

Only certain corporate entities can be a trustee - those with statutory trust authority. Otherwise it must be an individual.

I agree with Jim Chad. You might have to provide the long story to new SIMPLE IRA provider to convince it to participate in the correction and you employer might have to join you in the effort. Forty lashes to your employer and your credit union. I assume for now that you are an innocent victim.

Negative. You can ask, but the plan administrator cannot give you personal information without participant consent. The Department of Labor position otherwise is incorrect, but many plans will provide the information because of the DOL position or will ask the participant for consent. Your divorce probably enables issuance of a subpoena for the information and a plan should respect the subpoena. Also, if your divorce is pending, the spouse can be ordered to provide the information, but a subpoena is easier.

What you describe cannot be achieved in the conventional terms you have used. Lou S's observation indicative of the problem. You need someone with a lot of sophistication in accounting and compensation to achieve what is desired for the non-elective contributions. You should not try to circumvent W-2 compensation for elective deferrals (the elective deferral will not reduce FICA wages. the whole system will be confusing to the participants because they will be unable to match their concept of compensation with how amounts are treated for plan purposes.

Example of right conditions: The plan documents of custodial account arrangements (each of which is a plan) provide for transfer to/from another custodial account arrangement, as appropriate, and distribution restrictions are preserved in the receiving plan as required by law. It concerns me that this is a follow-up question because the best approach is to keep the one plan of the employer and modify it to have the current arrangement as an option under the plan while adding the desired new arrangements. No plan-to-plan transfers are necessary. I wonder if you understand what a 403(b) plan is, or are confusing my reference to plan transfers with contract transfers. Perhaps you are stuck with a particular provider and the provider cannot see beyond its experience with products or cannot offer you the best product. It is better for the employer to take over the plan and look at the desired products and features separately rather than let a product or provider define the plan.

A timely amendment may be possible to justify the action.