QDROphile

The only funny part of the post is imagining a 100% ESOP owned company in 2013 when the ESOP apparently owns no stock in 2013.

Nothing is novel because the new guidance is just a minor extension of the Treasury Regulation; it provides examples, not a new standard. The principle is that the plan adminstrator has to have a reasonable belief the amount is an eligible rollover distribution and that does not involve an investigation appropriate for a reasonable determination that the amount is an elgible rollover distribution (e.g. determination letter). Intent that the sending plan is qualified is enough. The standard is low because of policy favoring transportability.

I start with the requirement that the securities must be registered (plan interests and employer securities) because the usual exemptions for 401(k) plans do not apply. It is possible that the arranagement operates under an exemption, but determining the exemption would involve sophisticated securities law questions. The registration issues did not start with the recent acquistion of A. There is a similar issue under the Investment Company Act.

It is involved in a lot of ROBs transactions. How involved it is other than as an inexpensive custodian, I cannot say.

As a former customer of Sterling Trust, I can say I am so pleased to be a former customer and wish I have been a former customer longer.

This arrangement has a lot of lawyers advising it, including securities lawyers as well as ERISA lawyers. If it does not, then it needs them now to address the mess that it is in. Ask the lawyers.

"Our client is a corporate medical office *** The document allows the employer to name additional or successor trustees." So the employer, not the individual trustee's personal representative, appoints the sucessor. A corporation survives the death of its shareholder. How the employer acts to appoint is a corporate matter that is not any business of the custodian as long as the corporate action in in accodance with plan terms and is communicated in conventional terms to the custodian.

There is no express time limit under federal law. State law may be another matter. However, as time goes by and developments occur, the ability to implement the division becomes more limited. By waiting until your benefits started, she lost the ability to have certain aspects of the benefit. By waiting until you remarry, she will lose other aspects of the benefit. By waiting until you die after remarriage, she will lose a lot -- maybe everything. What "half of your pension" means changes with developments. If she tries to recapture what "half of your pension" meant in 2011, some apparently uneven things may happen if she is sucessful. On the other hand, she may just be losing benefits as time passes without establishing her rights through a QDRO. If you want some certainty, you should take charge and get a QDRO implemented.

Although this article relates to Roth conversions, it it worth reading for the rollover, pro-rata, and ordering principles involved with attempted splits. http://www.kitces.com/blog/splitting-after-tax-401k-distributions-for-roth-conversion/

Not mandatory, but there is a different mandatory six-month suspension rule unrelated to the hardship distribution rules. The six-month suspension rules for hardships are for those who wish to suspend use of brains for hardship distribution administration.

For all the practical value of awarding a zero interest, I am not so sure it meets the definition of QDRO: "creates or recognizes the existence of an alternate payee's right *** to receive all or a portion of the benfits ***. Can the portion be zero? Is nothing sacred? Certainly if there is no domestic relations order, the alternate payee gets nothing. Does that phenomenon completely occupy the "nothing" space in the law, or can an award of a zero portion come to the same result throught the definition of QDRO? A more pertinent part of the law might 414(p)(5). Does that suggest that a QDRO can only divest a former spouse of surviving spouse rights (being the benficiary unless consent to another?). That is My 2 Cents's question. Except for that question, most of the time it will not matter if a zero award is treated as a QDRO or not. It is just a confirmation of what the absence of a domestic relations order leaves uncomfortably uncertain for some amount of time and causes the Department of Labor to look stupid in its failure to read sections 414(p)(6) and (7) correctly.

It is complicated and risky to use a number of hours other than based on the ERISA conventions if actual hours are not recorded and counted. In any event, the plan docment needs to specify how hours are counted. Standard payroll conventions are not appropriate.

One can always argue desserts and it is difficult to referee such arguments. Putting those arguments aside, you might look at it as though if you could have actually carved out the $195,000 and paid it to your former spouse on 9/28/2012 ("segregated"), you would have nothing to do with the amount and you would not have paid any further attention. Since the $195,000 essentially belonged to your former spouse as of the valuation date it only makes sense that the earnings and losses on that amount should go to her. Take a good look at the word "losses" to help you get an intellectual grip on the concept. If your account lost money ever since 9/28/2012, do you think you should pay her $195,000 today when you are ready to segregate the funds?

The law did not change recently, but it is a common oversight. Part of a fix that is impleemtned by some involves paying the FICA and Medicare taxes on the amounts distributed, but any fix should be advised by a compentent adviser. Intiating and maintaining a deferred compensation plan should be advised by a compentent adviser -- another commmon oversight.

Securities law issues must be resolved or ignored. The registration exemption may be lost until the ownership gets realigned. Ignored is the general approach. It tends to work pretty well because so few people are aware of the issue and it hs no regulatory priority.

In general you might consider how you are complying with section 415 limits when absence is extended. Your mention of carrier suggests that a disabled individual's compensation, as defined in the plan, might be very low or zero.

1. Not relevant. The IRS/DOL do not have hardship requirements for loans. The sponsor made up the requirement, so it can make up the substantiation requirements. 2. The IRS does not like that approach to allocations. Probably fails the "reasonably equivalent basis" requirement, which is not expressly concerned with HCEs. 3. Someone will look like an ass when the disclsure comes out. Might fail the "reasonably equivalent basis" requirement. 4. Probably.

Profit sharing plans are philosophically compatible with discretion and variability based on economic results. Going to the root of the name (no longer technically relavant), the contribution is a share of the profits. No profits, or not enough profit, no share or smaller share. One can find cynicism in anything, but the factor is not so high in profit sharing. Match is entirely different. Matching contributions are not based in how profitable the employer may be. A match is offered for other reasons, if reason has anything to do with the decison. Or a match might be cynical. Just take a look at all the posts about bizarre matching formulae with a purpose to skew contributions to the owner or highly compensated -- the question is, in essence, "can we get away with this"? I am aware that matching contributions are in the profit sharing category. You know what I mean.

The only uncynical way to justify discretionary matching contributions is fear so great that it overcomes logic and integrity.

It is all about what the plan (and maybe the SPD says) says. If the announcement locks the contribution, then it is required. That is unlikely. One might make claims on equitable grounds, such as promissory estoppel, but those are very tough to win. This all goes into the chapter entiteld "Discretionary Matching Contributions Suck for so Many Reasons that an Employer Should Be Ashamed for Having Them as a Plan Ferature."

What are the terms of the plan with respect to allocation of contributions? What is the status of the business (did the MD effctively terminate the same as the other employees?

If the distribution was within 60 days it can be rolled over back to the IRA. The IRS can give relief to certain botched rollovers via private letter ruling. The guitly custodian should be consulted to see what the custodian thinks can be done -- the custodian has the reporting duty and relevant records.

The failure to file a top hat notice loses the exemption for many things besides the Forrm 5500, so correcting the faliure should get all the attention. Or were you asking about the requirement under the DFVC to file an abbreviated Form 5500 for the missed years?

http://www.irs.gov/Retirement-Plans/Non-Governmental-457(b)-Deferred-Compensation-Plans You won't find anybody who knows how to do something that is not done.

The only question that is relevant is #3. In fact, if there are deposits to a segregated and dedicated fund or funds without formal trust arrangements, the plan is in violation of the DOL's administrative relief from the ERISA trust requirements. Not a precise answer to #3, but claims must be paid monthly or when a certain reaasonable amount has accumulated. Also, the timing of payment of benefits has nothing to do with the timing of "collection" from salary redcutions, excpet for dependent care account. Payment is due based on a receipt of a claim, and nothing else. The TPA's contract will say the the TPA will not pay unless it has received adequate funds, but that does not mean the employer is not reponsible for covering the claims timely.