QDROphile

Even with publicly traded stock there are securities law issues and there are accounting issues. None are show stoppers, but the additional complexity and potential for mistake and misunderstanding are a consideration.

The plan is likely to end up with violations of the trust rules, plan terms, and distribution restrictions.

Rather than play a guessing game, how about providing some relevant information, such as whether or not the stock is publicly traded and what you mean by a supplemental 401(k)? No matter what, an employer stock investment option increases complexity and potential for trouble, especially if elective contributions are eligible.

Depends on definitions and interpretation of plan terms. It is a bad practice to treat someone as employed if they are not performing services and entitled to the usual perquisites of employment. Employers use it as a bright idea to solve various problems and they are kidding themselves as well as often violating state law. And don't send a message about ERISA preemption. I am making a more general point and not saying it is necessarily a violation of rules applicable to retirement plans

You should take another look at what "they" suggested, with two thoughts: 1. The freeze is simply a proscription on new money or transfers going into the current contract and the "new" plan is the new options for holding/investing new money (an expansion of the current plan). "They" would have to agree based on what the current contract says, but I do not see a difference. "They" suggested that individuals could transfer or not separately at their elections. 2. Distribution events are required for transfers by rollover. A distribution event is not required to transfer from the current contract accounts to the new accounts/options under the plan. Conceiving of the arrangement as the same plan rather than a new separate plan should help you get your head around this, but transfers from plan-to-plan also work under the right conditions. You should be happy to have a provider that is looking for solutions that do not involve the provider holding on to old and new money. I depart from the suggestion because I think it is unnecessary to end up with two plans when some participants choose to keep old money where it is.

What and when were the formalities of adoption of the substantive provisions for elective deferrals in the plan document, and the effective date? What were the relevant communications to employees? For example, was the document (with the elective deferral provisions) adopted in 2015 with a January 1 effective date with a notice issued to participants that described elective deferrals? "Lack of intent" on the part of the adopter is meaningless in light of action and documents that clearly and loudly speak otherwise in such a monumental way, although the plan might prevail upon the IRS for grace under VCP. If participants were given reasonable opportunity to elect contributions but all failed or declined to defer, the plan can be amended prospectively to remove the elective deferral provisions.

If the plan administrator has determined that the petition is not a QDRO, then it is not enforceable. However, there are formalities associated with determination that an order in not qualified, and a reasonable time must be given to cure defects. Meanwhile the statutory protections afforded under the QDRO rules remain in effect during that reasonable time.

"Giving us time to flip our plans. 2 days notice" and "left us with one day to take care of the matter" Would you care to provide more details to make sense of this?

The plan can accept eligible rollover distributions under its own terms. Generally it is not a good idea to allow rollovers for anyone but "active" participants and I do not think it is discrimination to deny rollovers into the plan for "inactive" participants. Your circumstances are worthy of exception and I think the DC account balance should be irrelevant, but a distinction should not be discriminatory or otherwise impermissible.

Appointer vs appointee is not the issue. In a small business, they are likely to be the same. One important feature is that appointment has the effect of excluding unintended persons from potential fiduciary liability. Naming the employer as a plan fiduciary gives the DOL a broader net for indiscriminate fishing.

The plan sponsor has nothing to do with investment fiduciaries. The plan administrator has that responsibility. Generally, the plan sponsor should not be the plan administrator.

Lou S. is correct and an intelligently drafted document would have provisions that would make it unnecessary for you to be concerned about the circumstances if the intent was only to accommodate the early migration from D to G.

The consultant's contract should include responsibility for ongoing monitoring of the investment option menu and notice to the trustees of any development that would be reason for special attention to the option before the next regular meeting. Examples include a material change in the manager of the fund and any fundamentals of the fund.

Your conditions swallow the question. A fiduciary does not have discretion about the issuance of a loan outside of determining if the loan meets the legal and plan document requirements. Everything in this topic relates to legal requirements. Making some of the required determinations may require some judgments and certain designs may require more judgment calls than others.

A section 125 plan can be set up to provide for payment of dental insurance premiums, but an FSA cannot be used to pay or reimburse the premiums and "reimburse a participant up to $400" sounds more like an FSA to me.

I think it would be a breach of fiduciary duty when the loan went into default unless the fiduciary went to extraordinary lengths to determine full payment could be reasonable expected despite the apparent lack of current projected income to do so. Making a loan that is expected to default is effectively allowing an in-service distribution, and if the participant is not otherwise eligible for an in-service distribution, it could be a disqualification event if the loan in fact goes into default and is not cured before deemed distribution. Also, there is following plan terms, and projecting a shortfall in payroll deduction while approving a loan does not look good. I would guess that the majority of plans allow regular payment only through payroll deduction. Are you suggesting that those terms are improper limitations, so that loans should be approved even though the plan will have to deviate from plan terms to accommodate loan payments?

No loan should be made without the expectation of repayment, Using payroll deduction as a repayment method is the primary factor in a determination that the loan will be repaid (as well as an administrative aid). Without that support, it is reasonable (or compelling) for a fiduciary to refuse a loan because of the uncertainty of repayment, or the likelihood of failure of repayment.

Yes, there is a deadline for a nonspouse beneficiary to roll over the distribution of the death benefit if the beneficiary wishes to use the lifetime method of distribution from the IRA: end of the year following the year of participant's death. That is not the plan's concern.

The DOL shamefully failed to fulfill the mandate to deal with post-death QDROs in the same way the the DOL has consistently failed to get QDROs right since 1984. The regulations provide no new information or guidance. Don't fuss over what the regulations say or do not say in your situation. It is pointless. The DOL had nothing on its mind, so no one can fathom what to do in the interiesting sitations from the DOL's mindless imagination and inadequate efforts reflected in the regulations. I approach the problem by looking at what was determined before the participant's death. If there is no domestic relations order provision that speaks to the division of the pension benefits, then it is unlikely that I would allow any interest to be awarded after death. However, I would be liberal in the evaluation, subject to allowing a cheat because the participant is not around to negotiate. For example, if the divorce decree (issued before death)said that the spouse gets half of everything as of some effective date (no specific mention of pension), I would allow a post death order that specified that the spouse would get half of the accrued pension benefit as of the efective date, including half of the related QPSA. The post-death order is not trying to cheat by capturing more of the QPSA that is implied by a reasonable interpretation of the decreee. I would not approve an order that tried to award more than half of the QPSA. If the plan administrator wanted to be aggressive, then the post death QPSA wold not be allowed because there is no pre-death evidence that the QPSA was intended to be awarded and the the law requires a death benefit to be specified in order to be valid. I recommend against stingy and technical interpretations, but I would hold the line at an agressive post-death award that appears to try to exploit the absence of the participant to resist. That means anything but a conventional division would be rejected.

Depends on the relevant state law. Under an ERISA retirement plan, if the beneficiary was the spouse of the participant at time of retirement, the former spouse cannot be assigned any interest in the survivor annuity.

Are you entertaining questions about the premise, such as whether the plan is an ERISA plan and whether or not the employer is going to concede the validity of the judgment to the extent it requires retroactive installation? I can understand that compliance with the judgment may be the lesser of evils.

What is the need? What are the needs identified by the plan?

Are you asking if the employee has a right to enroll in the plan, or if section 125 and the terms of the cafeteria plan allow the employee to change the salary reduction amount mid-year for payment of the employee portion of the premium. The cafeteria plan can be more restrictive about mid-year changes than the law, but most are not, so checking plan terms might answer that question.

I am with Chaz.

An amount deferred in violation of section 409A is subject to the consequences of violation. An amount that is deferred and paid in compliance with section 409A will not be subject to any of the taxes imposed by section 409A