QDROphile

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.

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.