QDROphile

A good plan document will answer the question. Absent a clear answer from the plan document, I would avoid deviation from standard practice. What whould the plan have done if one of the three had terminated? I suspect that distribution would be prompt and then there would be a tail distribution of the 2014 allocation. The answer might be affected by the employer's decison to terminate the plan or not.

You should be able to transfer assets even if it is a different plan of a different employer. The vendor should do what the plan administrator directs the vendor to do. That does not mean the vendor will behave. It also sounds like the new set-up is confused, and perhaps mistaken. That spooked the vendor. You need someone who knows what she is talking about to evaluate what was done formally, what needs to be done under the circumstances, and communicate with the vendor.

While the ERISA side of plan status may be arguable, the tax regulations have no confusion concerning whether or not there is a plan, and there is a plan unless there is some fatal defect under the section 403(b) regulations, such as not having a plan document. While I offer no comment on the safe harbor question directly, I don't think the "new plan" theory is viable no matter how you dress it up with plan numbers.

Forfeiture is an acceptable approach, but I would not forfeit until distributions are mandatory, which does not include a provision that is triggered by simply losing touch with the participant. It would work with mandatory distribution of small balances, keeping in mind the mandatory rollover rules.

What caused the request for the document?

The plan must be operated in accordance with its terms. I doubt that correction of the operational failure by simply skipping one year and extending the installment period would be an acceptable correction.

Yes and not much. Administratvie burden increases. Edit: Sorry, big oversight. Usually you have a second section 415 limit so employer contributions can be greater than with a single plan. Most nonprofit organizations are not that generous. It can work for organizations that are not subject to discrimination rules.

Self-insured plan or group insurance contract?

You can do whatever you want in 457(b) plans, subject to contractual restraints. Contractual restraints are likely to restrict ability to make mid-year changes that diminish participant benefits. Whether anyone will assert a contract claim is another matter. Results may vary depending on whether or not the 457(b) plan is a government plan. I assume that your response to the question thrown your way will not be taken in any way as advice. Although many apply 401(k) principles to 403(b) plans, the rules can be different. A last day provision is not in itself improper. There is no basis for retroactive amendment under 403(b) as there is under 401.

Unless the distribution is rolled over to a qualified trust (a trust maintained in connection with a qualified retirement plan) or an IRA that is maintained as a trust, distribution to a trust will be taxable. Delivery of funds to a trust other than a qualfied trust or IRA is not a rollover. If you are a representative of the plan, you should not be discussing personal tax matters or financial planning with the participant. Your script about distributions is very narrow. You can find it in the SPD and the tax/rollover notice.

This is not just about document updates. You have some legal issues involved in the arrangement that you have not mentioned and that have a bearing on what should be done. Given your inexperience with ESOPs, someone else should be hired to provide direction and you should not proceed yourself based on responses that you might get on this Board, however good they may be.

I am missing the premise concerning the successor plan rules. If Target's plan is terminated before the closing of the merger, the plan maintained for Target employees after the merger is not a sucessor to Target's plan. That allows transplanting accounts by rollover. The Roth accounts can be blocked by the post-merger plan and the other accounts can be rolled over. That may be unacceptable becuase it would allow participants to dispose of accounts in other ways. I agree with Lou S. that you can set up your separately accounted frozen Roth buckets if you merge the Target plan in to the aquirer plan.

What does the IRS have to do with it?

The estate will handle the check just like any other property of the deceased that is not subject to any other arrangement. The representative can negotiate the check.

A plan administrator has fiduciary duties generally with respect to participants and to a more limited extent to beneficiaries. Law relating to QDROs has some specific aspects that affect the more general duties. The law specifies that the administrator is required to do certain things when a domestic relations order is received -- that is another matter that I will not address but that might explain the poster's California employer situation. Until a domestic relations order is received, it is business as usual for administration. Among other things, that means that the administrator may not interfere with the participant's exercise of rights. For example, that means that if the plan administrator knows the participant is divorced, no delay or fooling around with respect to distributions on speculation that there might be a domestic relations order that has not appeared or that one might be prepared some day. However, the plan administrator is required to follow plan terms and procedures, so if the Administrator is dumb enough to have QDRO procedures that impose obligations with respect to some kind of notice about a possible domestic relations order, the Administrator may have to follow the procedures and delay or restrict distributions or loans or ??? The Department of Labor's view on the subject is contrary to the statute and the case law. The DOL informally maintains that a fiduciary has obligations to a would-be alternate payee if the fiduciary has notice (whatever that means -- a note taped to the mirror in the ladies room?) that a domestic relations order may be forthcoming.

I was asking My 2 Cents for clarification of the question posed to practitioners.

I would expect to find language in the plan document or loan policy that says that parties in interest are eligible for loans.

What's your question?

Not necesarily the specifiec benefit amounts for that particpant, but the options must be illustrated with representative numbers.

Don't expect to find anything specific about your Roth circumstances in EPCRS. You will have to build on principles. The IRS asked for comments about Roth issues whe it published Rev. Proc. 2013-12. I agree that VCP is warranted, but check on the self-stated limits of VCP with respect to income tax issues that are outside of qualification matters.

It is possible for the CA pension to have begun distributions to the participnt without a QDRO. In fact, the plan had to begin on time unless it had a domestic relations order. I think the responses are too specfic given the uncertainty about the facts. I could come up with an entirely different explanation, but it woud involve the same degree of speculation that the other views engaged in. I can say for sure that a social security number is NOT a requirement for qualification and neither is a birth date. The Plan can and will require both for determining and paying a benefit, but that information is not required to be in the order and is not required to be given before the order is determined to be qualified. The Plan may assert otherwise, but it would be wrong. Usually it does not pay to fight the Plan about formalities like that. Under some circumstances date of birth is not necessary at all. Prudence about identity acknowledged, the AP's address (not "last known address" by the way) still must be stated in the order for qualfication. Some courts have procedures for protecting the address from public disclosure.

Evaluation for operational failure and possible remedial action would be appropriate.

I am curious about you conclusion that the plan cannot distribute anything more to Dr. B. Unless the plan's QDRO procedures have an earlier trigger, the plan conducts business as usual until it receives a domestic relation order. Then it depends on the terms of the order wether or not distributions are allowed and how much. It is possible that the contempt proceeding has generated a domestic relations order that has been delivered to the plan, but I don't take it for granted. The person who should be concerned is the plan administrator, who can be liable for consequences of improperly interfering with the rights of participants. Given the complexity and potential nastiness of the situation, you should be very careful about reaching any conclusion about what should be done and should look to instructions from the plan administrator unless somehow it is your job to be providing advice about distribution eligibility and QDRO administration. If it it your job, you might consider buying some advice; the details and nuances may be very important in this matter.

From instructions to Form 1099-R: Nonqualified plans. Report any reportable distributions from commercial annuities. Report distributions to employee plan participants from section 409A nonqualified deferred compensation plans (including nongovernmental section 457(b) plans) on Form W-2, not on Form 1099-R; for nonemployees, these payments are reportable on Form 1099-MISC. Also, report distributions to beneficiaries of deceased plan participants on Form 1099-MISC.

The board does not have responsibility for naming a fiduciary if the plan document gives that authoriity to someone else, such as the CEO. That means you are screwed (in so many ways) by using a prototype plan. If the prototype does not name the sponsor as the plan administrator, the best that you get is a provision that the sponsor can name a different plan administrator, and the authority to act for the sponsor rests with the board unless corproate governance documents provide otherwise.