QDROphile

I do not subscribe to your proposed suspense account approach. The USERRA make-up should work like any other nonelective make-up except the employer should have the option to contribute more to cover it. Otherwise, in a leveraged ESOP, it comes out of the regular allocation, and thus distorts the allocation. The plan terms should provide for the special allocation, but do not count on the drafter cabal to have taken care of the matter. It is just so much easier to say the plan will comply with USERRA requirements than figure out how that will work.

Do not bother asking that question. It is meaningless in the current circumstances. The benefit has changed. it is now a stream of payments for the participant's life. A domestic relations order can assign some or all of the payments to an alternate payee. That is all.

This is a really stupid idea. If the employer is going to the trouble of maintaining a nonqualifed plan, it should not be limited in such a complicated way. Among other things, it is an invitation to mistakes in the plan

For a nonqualified plan, distributions are subject to FICA and taxation under special rules. the extent that benefits have not been included in FICA wages or SECA earnings at the time of accrual, they are subject to inclusion at distribution, again subject to some special rules for annuity type distributions. The instructions to Form 1099-MISC reflect those rules, but you need to know the rules to figure out the correct taxation and reporting. You also need to know how the deferred compensation was designed and administered to know what to do now. This is an area of considerable confusion.

And if the plan restricts rollover amounts, the plan should provide very clear disclosure before the rollover.

Perfect advice if you love agitation and intrigue, except that you should substitute Departement of Labor for DOJ. It is possible that the Departement of Justice was involved, but the DOJ comes in at the request of the DOL to add some enforcement muscle. If you think something is amiss generally or with the execution of the remedy, your entry point is the DOL. And if you take the bet, let us know the payoff.

Is it a nonERISA plan because it is a church plan or government plan? ERISA applies to nonqualified plans, subject to a lot of exemptions. The ERISA claims procedures should apply, and that is the forum for resolving who gets benefits.

I doubt that there is a requirement to provide a narrative account of the events, although it would have been a good practice. The failure reveals the attitude that the "powers that be" have about the ESOP and is the basis for my conclusion that the participants have been minimized -- so much for the ideal of creating an ownership culture, the Holy Grail of ESOP believers. The transactions should have shown up in some way, if only to show an adjustment to share price. Evidence might be found in the ESOP's Form 5500 (which should be made available to you on request, but it is not exciting reading) or in comparison of participant statements from year to year.

To you, the ESOP is a retirement plan that has its assets invested in the stock of the company that employs you. You hope that the value of your account goes up because the company is successful and and the value of the stock goes up. A sale of the company may or may not put an end to the ESOP, and with favorable economic consequences if you are lucky. You get statements about the value of your account, which should also let you know what the value of the stock is. If you think you have a more exalted position in the life of the company because of the ESOP, forget it unless you enjoy the agitation and artificial intrigue.

Fiduciaries get in trouble when they venture beyond established duties and plan terms to "help" participants.

For the once and future king?

The various benefits can be provided, subject to terms of insurance policies and other contracts, but the tax consequences are likely to be different and administration of benefits generally will be complicated by the addition. The organization must be particularly cautious about retirement-type benefits. There is some possibility of state insurance law concerns, depending on the benefit and how it is provided.

With respect to cafeteria plans, in which the stakes are higher because elections cover the entire year, the IRS has informally commented that a mistaken election can be corrected. That leads to a lot of discussion about how it is determined that an election is truly mistaken and the IRS assertion that a mistaken understanding of the tax effect of the election is not the kind of mistake that would be eligible for correction. Because of that assertion and the more limited scope of the "mistake" (only one pay period, then the election can be changed under normal procedures depending on plan terms), I would not get into the mess of looking behind the surface of the election paperwork and into the mind of the participant. The matter is not important enough for the plan to go out on a limb. I am unaware of any reliable authority that would allow recharacterization of the election or "refund" of the deferral.

This thread illustrates why it is not a good idea to have the corporate plan sponsor be the plan administrator. The Department of Labor can assert that every individual director and executive officer is a fiduciary personally based on the formal identification of the plan sponsor plan administrator, and it has done so. In the end, the argument that there is a very clear and well defined (by practice) limited number of persons who are the functional fiduciaries will probably control the personal liability questions, but it will be rather uncomfortable for those poor formal fiduciaries to suffer through the process with the liability cloud over their heads and the outcome is uncertain.

With respect to deposit of elective deferrals, the Department of labor view is the the plan administrator, or some other fiduciary, is responsible for receipt because the amounts become plan assets at some time and the fiduciary is responsible for the management of plan assets. To use what jpod posted, the fiduciary has a duty to make sure that the plan receives its assets. That does not mean liability for a late deposit unless the fiduciary breaches its duty either by not paying attention or by failing to take appropriate action if the deposits are not received timely (including an appropriate correction if the deposit is late).

OK to amend as you describe.

Has the plan filed Form 5500 in the past? Why not ask the vendor to explain its statement?

How does one change the plan sponsor if not by restatement or amendment? A restatement is an amendment, but not every amendment is a restatement.

The plan document should say that the sponsor may elect to cover administrative costs. Sometimes the sponsor is required to cover certain admimistrative costs.

Plans can have a safe harbor definition of compensation that excludes taxable fringe benefits. That DOES depend on plan language and I am glad to have the opportunity to clarify my statement that plan language does not matter for income tax purposes.

The plan document has nothing to do with the income tax treatment to an employee of employer-provided health benefits to a domestic partner. Marital status and dependent status determine the tax treatment. Domestic partners are not spouses unless the state has converted registered domestic partnerships to marriage. Check out Washington -- I do not think the conversions are effective yet.

I may have seriously underestimated the understandings and arrangements described in the post.

The original message also said that each of them has their own 401(k) plan, presumably as employees of the S corporation. Then it goes on about 401(k) plans in a partnership context and uses the term "partner" to apply to each of the employees of the S corporation. Who knows the actual circumstances? I only know that the correct assessment and advice cannot come from the message boards.

Employees cannot maintain personal 401(k) plans with respect to their W-2 income. You should also get acquainted with section 401© of the tax code. A partnership is the "employer" of an individual who has self-employment income, and the individual is an "employee." You probably need to buy some competent professional advice to find some compliant arrangements for yourself and others.

I know no secrets. The IRS let the horse out of the barn with its inattention to execution of new comparability and appears to have given up the chase. However a blatant pie in the face, with no attempt at illusion or formality, might get exceptional enforcement.