QDROphile

From Devil's Dictionary by Ambrose Bierce: "Cynic, n. A blackguard whose faulty vision sees things as they are, not as they ought to be. *** "

This is a legally and factually complex question that cannot be adequately addressed in this forum. Maybe it is, maybe it is not. If the individual has a compelling reason to disclose/disparage and is afraid of the contract, then personal legal advice is needed.

Please provide the authority for your statements and explain when filing is not necessary with respect to earned income. I cannot tell for sure, but it appears that you are confusing the obligations of the payer and the payee. The free pass you give on a "coupe of thousand dollars" is very suspicious. While it is true that earned income may not ultimately be taxable for some reason, contribution to a Roth IRA requires earned income and cannot exceed earned income. If one is going to assert receipt of earned income (by contributing to a Roth IRA), it is certainly best practice to report the income, even if the income tax liability is zero. A schedule SE (for SECA taxes) must be submitted if self-employment income exceeds $400. Contributing to a Roth IRA may get you an audit if tax returns are not filed. An audit is no fun, especially if one has no records, even if there are exceptions to filing because the income is below the filing threshold.

For defined contribution plans, plan-to-plan transfers often work well, but have implications that should be understood before undertaking them. Both plan documents must have appropriate provisions for the transfers. In-service distribution and direct rollover work if in-service distribution is allowed. The participant has to elect the distribution. Your post implies that the employee wishes to move everything to the other plan.

Nothing legally wrong with the employer loaning the funds to the former participant for payment of the plan loan to avoid the adverse consequences of alternatives. It is not a good idea in general to have employees or former employees as debtors.

Installment period cannot exceed 5 years. What you describe is defensible, if not generally accepted. A devil is in the operation (other demons are in ESOPs in general , but they were installed by the creator). The changes, which are amendments, cannot be discriminatory.

Allowed, not uncommon.

I agree with Kevin C but I also acknowledge that there is disagreement. I also think that there is no such thing as a nonERISA 403(b) plan except government and church plans. The DOL is disingenuous about its positions over time and its current position is a laugh.

If you want certainty you are going to have to go the VCP route. That should not be any problem. The IRS allows retroactive amendment of failure to adopt all the time. If you want certainty, you have a new thing to worry about. Multiple employer 401(k) plans have an issue with the securities registration exemption that covers single employer plans and plans without elective contributions. I think that if the participating employers have material common ownership, although not at a level that allows a single employer plan, the exemption applies. But we have no authority that gives a definitive answer. And no one seems to care.

I do not think there are special rules. For example, the spouse consent rules are no different because of incarceration of one or the other. A prisoner is not out of touch or incapacitated. In an exercise of fiduciary caution, the plan administrator might make greater effort to assure that the notice of qualification was actually received by the AP, which might mean resending the notice to the prison by return receipt mail and restarting the 60 days.under the renewed notice. Was the order so difficult to interpret that the plan administrator thinks there is a substantial chance of controversy? If so, the order should not have been qualified. Or is the plan administrator (a) uninformed, or (b) cowardly?

Treas. Reg. section 1.401(b)-1. Revenue procedures from 2007 on have discussed the regulation in a helpful way. You have to look out for the special 401(k) rules relating to when a deferral election can be effective, and that might put you off.

Consider that covering the new entities is a plan amendment effective January 1, 2015 and there is time to adopt that amendment yet in 2015 under the standard timing rule.

Although the Department of Labor disagrees in concept with this message to some extent, the notice of qualification which explains in detail the award (doesn't it?) establishes the AP's benefit and frames the potential contest. At that point the AP has the ability to file a claim under the plan's claims procedures concerning qualification and the interpretation of the order, as expressed in the notice, which includes the awarded amount and related earnings credits. Look to the plan's claims procedures for indirect guidance on how long the AP has to complain. Most plans use 60 days. The notice of qualification should explain (didn't it?) that the participant and AP have 60 days to complain about everything, using the plan's claims procedures. If there is no communication after 60 days, the AP has accepted and the participant is liberated. This should all be part of the written QDRO procedures of the plan (isn't it?). So get some competent QDRO procedures. The DOL disagrees to the extent that qualification is a matter that is subject to the plan's claims procedures -- or at least the DOL took that position on a panel ten years ago and the DOL does not learn or teach very well so who knows what the DOL thinks now.

Not quite that long ago, but long, an employer always had at least one HCE.

There should be some discussion of the fiduciary issues -- the plan administrator (fiduciary) has engaged (a fiduciary act) an investment adviser (a fiduciary) available to the participants. Who has what responsibility/liability; what are the consequences of participant use of the investment adviser; what are the options of the participants with respect to investing. Without appropriate discussion and cautions, the plan administrator has effectively, as a fiduciary, recommended the investment adviser to the participants -- a pretty serious responsibility.

Was the amount delivered on or before the last day or work? If so, I would have to be presented with something else before I would believe the amount should be excluded from the contribution calculation. If not, I would look at the annual addition terms because those terms might address amounts paid after separation from service.

You know that you are going to receive at least one response that asks what the plan says. The definition of compensation for purposes of the profit sharing contribution is relevant. The vacation pay policy may also shed some light on the matter. For example, if unused vacation can be cashed out every year, it is not likely to be treated as severance under the plan for a participant who terminates. In the abstract, amounts that are included in the final check tend to be included in compensation for contribution purposes, such as eligibility for elective deferral.

The event described is not separation from service, it is separation from service after 65 and before seventy. Not the same thing. If separation form service is a payment event, it has to be separation from service -- not separation from service plus some other condition.

Sorry (not really) to be so grumpy about it, but the 401(a) (17) limit is an AMOUNT limit, not a TIMING limit. There has never been any credible controversy over the meaning. Honi soit qui mal y pense. That said, a plan document can create the problem that does not exist in the law because of stupid drafting or cynical drafting by persons whose concern is simplification of payroll processes rather than offering elective deferral opportunity. At this late date, anyone who "innocently" can't come to the right conclusion deserves contempt, especially KC Retires lawyer.

Benefits accrued after 2004 are subject to the 409A requirements. Any noncompliant terms would have had to be modified by 2009 with respect to the post-2004 benefits (which would include "earnings" accruals). How are you interpreting #3? If the individual does not retire by age 70 is the benefit forfeited or simply not paid until death? The age 65-70 window is problematic because it does not fit the separation from service event.

Try Treas. Reg. section 1.457-8(b).

We would only need to know more if it made a difference. What difference would any of those elements make? The 457(b) plan has terms that describe what the benefit is, translatable in some way to dollars. All of the benefit dollars are taxable to the recipient. How the employer comes up with the dollars from its own assets is not a part of 457(b). I am curious about other compliance issues, such as the annual limit to benefit accrual. Are the "contribution" and "earnings" part of the benefit terms related to the terms of the life insurance policy (e.g. premiums, cash value, death benefits)?

The domestic relations order can be arranged through the Washington court that issued the original divorce decree. It is possible that the order can be arranged through a Utah court -- that would be a matter of Utah domestic relations law and would possibly be affected by whether or not there is a dispute over terms. If all that is to be done is to satisfy requirements for a QDRO, the easiest approach would be to go through the Washington court with a domestic relations order that implements the terms of the divorce decree with respect to the retirement plan. The domestic relations order IS just one more piece of the divorce papers, with a long time gap since the last piece. The time gap could create some minor complications that will not seem minor if you are trying to do this yourself.

There is not a problem when all benefits have started before the appropriate required beginning date. But if the plan allows the AP to start later than the participant, the plan has to pay attention to make sure that the "separate account" benefit is paid properly. But why bother with the possibilities? A plan is not designed to maximize anything for a former spouse of an employee. Would you be hoping for an actuarial gain by an untimely death after the participant starts benefits?

My 2 cents: Look at Treasury Regulation section 1.401(a)(9)-8 Q&A 6 I raise you another 2 cents. gregmk: The plan cannot be expected to have such provision for an alternate payee. The plan's QDRO procedures should cover the matter and provide the clarification that the plan means what it says: the benefit has an ultimate commencement date, and that is when the participant starts benefits. The phenomenon of a possible earlier starting date for an alternate payee (by design or because of the statute) does not detract from the ability of the plan to enforce the ultimate benefit starting date. With inadequate QDRO procedures, the plan administrator will have to interpret the plan and determine administrative policy from scratch.