QDROphile

gregmk You are correct that requiring an AP to start no later than the participant avoids RMD problems without having to evaluate every situation and taking extraordinary measure when the circumstances require. It is just a good administrative rule. The other fundamental reason, which is related, it that there is one benefit per participant, notwithstanding all of the misunderstanding behind the nonsensical use of the term "separate interest." When that benefit starts, there should not be a residual that starts later. On a more practical level, why deal with two benefits if it is not necessary? I admit that "should not" is a value judgment and "two benefits" cannot be totally avoided -- only certain aspects. If the plan wants more administrative work, it is free to chose another path, but it cannot be compelled to allow a later start by an alternate payee. IRC section 414(p)(3)(A).

I thought purchasing employees went out sometime in the 1860s

It is an RMD issue. If you can deal with that issue, it is a matter of design. If they thought about it, most plans would not choose a design that would permit part of the benefit to start later than the participant starts.

Fabulous coinage: rocket surgery. Now it is in the public domain and I intend to use it.

A letter or other notice to the plan is not going to provide any protection unless the plan has decided that something less than a domestic relations order will suffice. The law requires a domestic relations order before a plan is required to act (including to protect a would-be alternate payee). If the plans are based in California (and maybe elsewhere) they will probably treat a California joinder order as a domestic relations order for purposes of preserving benefits until matters are resolved. A joinder is an abomination, but most plans will choke it down with the intended effect.

Nix on rollover. Transfer.

Protecting participant information is a fiduciary duty, but there are no articulated standards that I know of except with respect to matters relating to employer securities. Some things are obvious, such as not in appropriately authorizing disclosure of participant information and maintaining appropriate policies and supervision of company employees who carry out the administrative activities of the plan.

So amend the plan.

if the husband approved the loan it really does not matter if the transaction were before the marriage unless it was so far before the marriage that the individuals did not know each other. However, the description of the transaction and the roles of the individuals does not facilitate an understanding of the transaction. A prohibited loan is a continuing prohibited transaction, so the PT is required to be reported on the current Form 5500. The fiduciary should hasten to correct the PT and maybe should inquire of the person who advised about the proposed transaction.

Depends on what you mean by termination. If you mean liquidation, which terminates the plan for tax purposes, then contributions have to be made first.

Consult IRS Publication 571 for some of your questions about 403(b) plan.

Will you be able to explain to them the risk that they will be subsidizing each other's benefit? That is not immediately obvious in a cash balance plan.

It is not a good idea. It adds confusion to complexity.

The plan document may have terms that specify how to deal with an excess, based on provisions of the tax code. EPCRS guidance says that if the code provides a correction method, then that method applies. The EPCRS guidance also says that a failure cannot be corrected by an action that would cause another failure. Failing to follow plan terms is an operational failure. What you might find is that the correction provisions speak to corrections after the end of the year and your question will become whether or not you can do something else if you find the error and correct before the end of the year.

You are going to have to explain how a partner has 1099 income rather than K-1 income before the question even gets started. And the details will be critical.

If you want to add complexity to your considerations, check Field Assistance Bulletin 2008-1 wonder how that figures in.

A trust is the owner of plan assets. Generally a trust, or trustee, has its own EIN. A change in plan sponsor would not change the EIN of the trust. When the corporation was the sponsor, the corporation could not have been the trustee. It is possible that the individual sponsor is the trustee now.

Mr. Simmons is probably either the hospital's or the doc's lawyer. In either case he won't be able to rely on the determination by another person, at least not without disclaimer. I have been involved in situations with elements similar to what you describe. I advised that separate arrangements would fail if challenged and the IRS tends to scrutinize physicians with good reason. The nonqualifed options tend to be unacceptable, as you suggest. A 457(f) arrangement will not provide the long-term tax deferral that is desired. Generally, the greed arrangements are covered by the common law rule of "tough" and there are no clever substitutes that satisfy the greed standards. There can be issues other than payroll and benefits related to these sketchy arrangements. The assumption is that the employer is not a government entity or instrumentality.

Whenever faced with a controlled group or affiliated service group question, I always ask, "What undesired or abusive practice are/were physicians engaged in that resulted in the current law to prevent the abuse/practice?" Advising under the circumstances is difficult -- both the judgment calls and communicating an unwelcome conclusion. It can get especially difficult if you firmly believe in an outcome but are asked to assist with an arrangement that is improper under that outcome. In a slightly different vein, I am unaware that the lawyers for Microsoft suffered any consequences for bad plan drafting relating to eligibility of what were determined to be employees, notwithstanding contracts that said otherwise.

Because it is not good faith compliance with the SCP guidance to disregard a pretty clear interpretation as applied to the circumstances and the IRS is sensitive to disguised contributions.

What more do you need as long as there is nothing contrary? Also consider that you and the participant would want to reduce the excess net of negative earnings, so you should be consistent and reduce the account by the positive earnings on the excess.

"does a recordkeeper allow" For any respectable plan administrator,there's the rub, innit?

Back to the original Department of Labor position, except that the Department said that it was impermissible to allocate the charge to the participant's account. The Department's recant only said that is was permissible to allocate to the participant. It did not say that treating the expense as a general expense of administration was improper.

The IRS might assert that the provision effectively causes a violation of section 410(a). Section 410(a) involves standards for participation in the plan, but one cannot participate effectively in the plan if one cannot accrue a benefit. Any exclusion based on minimum service is going to rub the wrong way.

I support sticking with the interpretation of the domestic relations orders received as a QDRO. The plan is already deep into that position. The efforts should now be directed at administering the QDRO in accordance with its terms, whatever the plan administrator interpreted them to be. If the AP was shorted $2000, then fix it. Following documentation formalities as much as possible in the process would be both good training and good for defense.