QDROphile

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.

The IRS recently accepted this approach in a VCP filing under Rev. Proc. 2013-12. Rev. Proc. 2013-12 does not say for sure; the IRS has requested comments on how to correct such a faliure.

The thought is that the IRS may be forced into hastily asserting liability to preserve possible claims. Once the IRS is in that posture, it is more difficult to deal with and it might want some blood for the extra adminstrative trouble instead of some more cooperative resolution of any issue of interest. I have only refused to extend the statute once. That was with the Department of Labor when it was so far out of line with its original assertions and general rudeness in the process that things could not get worse. That is not typical of my experience with the DOL. We tend to get constructive behavior from IRS agents, too, so we generally accommodate.

"the PEO is in TX" There's your answer. Texas is too big for the the law.

One thing that jpod is observing is that in almost any company there is disparity in compensation among employees, and there is often no objective measure about who deserves what, which gets one into the "business judgment rule" that protects directors against mere disagreement with shareholders over decisions about how to run the company, including compensation. A class warrior would robserve that management rapes the company to the extent that the shareholders let them get away with it. Other perspectives also have merit. Shareholders have recourse either by electing directors who have less tolerance for management rape or by a derivative action against the directors. Some ESOP fiduciary holds the shareholder rights in your company. If the directors are out of line, the fiduciary should take appropriate action as a shareholder. The trick is that the ESOP fiducicary is almost certainly either appointed by the directors or is one or more of the directors. Nice logic loop, isn't it? A fiduciary who does not take appropriate action as a shareholder against directors who tolerate mamagement rape breaches fiduciary duty. To prove breach, you have to estalblish that the directors are out of line in what they allow. You are at least aided by any confilict of interest of the fiduciary, but the business judgment rule is a huge barrier. I can promise you that the business judgment rule does not align with your sense of fairness.

If an ESOP is a shareholder, it would be helpful to know how much of the stock the ESOP owns as a percentage. It would not be uncommon for the ESOP to own 100 percent. It would also be helpful to know what benefits are at issue, if the directors are also employees, and the identity of the ESOP fiduciaries. The plan administrator and the ESOP trustee(s) are fiduciaries. The ESOP may have other fiduciaries.

Acquire shares in the company. Vote for directors who will take actions that you think should be taken in the interests of shareholders.

Plan terms probably prevent allocation in accordance with 2012 compensation at this point. To illustrate in the extreme, if someone terminated in 2013, the plan probalby would not allow allocation of a contribution in 2014 to that account. I know you instructed to assume that the plan does not have any language that otherwise indicates when a contribution must be made for the plan year, but you need to test that assumption very carefully and tose particular words are no the end of it. You should check to see if allocation according to 2013 or 2014 compensation is a close approximation of what is intended.

First, because this is a government plan, it may be subject to state or local law that affects the matters. Assuming that the plan follows federal standards under section 414(p) ot the tax code, it sounds like the order was not qualifed when "approved", as suggested by GMK. The approval was probably only with respect to form, which is a common procedure preceding submission of the proposed order to the court for its consideration and approval. An order cannot be qualified before it is issued by the appropriate authority, usually a court. The "my ex refused to agree to it" statement is the clue. One of the standards for qualification is that the plan cannot be ordered to pay more that the value of the benefit. The administrator's suggestion for terms of the order to be submitted now is constructive: pay the lesser of the value of the benefit at the time the order becomes qualified or the entire value of the benefit. The order will not qualifiy if it demands more.

That is a question for the fiduciary who has the authority to interpret plan terms.

Grandpa cannot be sure there is no risk. The raising of the credit is a benefit to a 25% shareholder, and generally providing a benefit to a family member is recgnized to be an intangible benefit. The Department of Labor is not forthcoming about where it draws the line, so we cannot say for sure that the DOL would not take issue. The circumstances may suggest that there should be no trouble, but I don't like to argue facts and circumstances when it comes to prohibited transactions.

A certain amount of diligence is required before accepting a rollover to avoid disqualifying the plan. It is not much. Check the regulation cited above for examples.

Your suggestion is viable and certainly beneficial to the participant. Many administrators do no like the addtional hassle that goes with collecting checks. Your terms should deal with what happens with late checks, checks for the wrong amount or NSF. Keep in mind that collection is a fiduciary matter, so if there is a default, the fiduciary will have to decide what to do about enforcement of the promise to pay. And everything will have to be disclosed in the laon disclosure. A more radical approach would be to require the employers to continue with payroll deduction and forwarding funds to the plan after discontinuing particpation in the plan. Who makes the call?

#2. Failure to follow plan terms.

Your plan document should address when coverage ends. Also be careful to distinguish when coverage ends (qualifying expenses afterward are not covered) and runout deadline (claims for qualifying expenses incurred before coverage ends can be submitted). A person who terminated in October 2013 probably lost coverage before 2014 and expenses incurred in 2014 are not eligible.

Some plans expressly provide that persons on approved leave, including medical leave, are treated as employed for limited purposes or for all purposes. FMLA is subject special rules and is treated as employment for limited purposes. Many plans have a waiver of such conditions for death, disability or retirement. You have an interpretation issue that does not have a pat answer. I have trouble with the term "actively employed" and never willingly use it.

Determination letters are not obligatory, but it may be imprudent not to get one,