QDROphile

Start with section 401(a)(13) of the tax code and section 206(d) of ERISA, but you will have to go to the bankruptcy code for a complete picture. Your question is not precise. A plan is not protected from its creditors. A participant's benefits are protected from the creditors of the participant.

See what EBIA is doing these days.

You have another issue if the sponsor is paying the expenses and getting reimbursed rather than having the plan pay expenses directly. See PTE 80-26. If the sponsor has been paying expenses and is discontinuing, it may change the ERISA reg. 404a-5 disclosure.

There is not a conceptual problem with a 403(b) money purchase plan but it is unnecessary and either a discretionary employer contribution under 403(b) or a 401(a) plan will be less complex and restrictive. Just choose 4% contributions.

Have you looked at Treasury Regulation section 1.403(b)-5?

If the employe retires in March, the first required distribution year is 2014. The first dollars distributed in 2014 after retirement are required distribution dollars and not eligible for rollover.

Including the individual policies in the plan documentation changes the optics, possibly to the point of making them part of the employer's ERISA plan. Including non-ERISA benefits in a document (defined as some pieces of paper held together with a staple) that serves as an ERISA plan document does not itself make the benefits subject to ERISA. It may make interpretation of the plan terms difficult and it may require certain things to be done with respect to the non-ERISA benefits as ERISA would have them done.

Aggressive proposal (but what I would do): Order is qualified under an interpretation that the AP's interest will be determined and effective 1/1/2012, with earnings calculated on the amount from 1/1/2012. If anyone disagrees with the interpretation they must notify the PA within whatever time is appropriate under the plan for claims. No distribution to AP until the deadline. If someone objects and will not back off when informed of the consequences, then the order will be disqualified, because, by golly, that interpretation was really wrong but the order, as properly interpreted, would require the plan to do something that the plan is not designed to do. Personally, I think plan B should try to get MEP A to calculate the pre-2012 portion and plan B can take it from December 31, 2011 forward. At least ask.

My take, based on how you report, is that the use of "gross" for application of the deferral percentage is OK and the use of the unreduced compensation for calculating the match (the number for application of the 4% to determine the maximum) is an operational failure -- not following plan terms. Best practice would be to include an explanation of the details about application of the deferral percentage in the deferral election form or the SPD.

Don't get involved with any pieces unless you are prepared to take responsibiity for the whole. The last thing the fiduciaries need is to have advisers working at cross purposes. Also keep in mind that some fiduciary may be facing some liability for getting the plan to this point in the mess so there may be adverse interests involved in workin out solutions.

So it would be under a cafeteria plan for an employee who chose the cash instead of the health benefit.

Aren't you describing a section 125 plan? And don't we suspect that the employer is not complying with the law by having a written plan document and following appropriate procedures under section 125?

Don't they have an operational faliure that can be corrected?

Come across incompetence in drafting? Sure. I am suprised that the document got a determination letter if it really does not address dispostion of forfeitures.

What does "signed" mean? It is evidence of a required event that has come to be mistaken as a requirement itself. You may be able to find other evidence of the event.

My response is mistaken. I thought you were dealing with excess deferrals, not faliure to implement deferral elections.

It is possible that the plan document covers excess deferrals in some detail. Otherwise you need to look at section 402 of the tax code and related regulations.

The dental benefits may well be excepted benefits, but an FSA can never be used for payment of premiums. Payment for dental coverage (premiums) would have to be through another feature of the cafeteria plan (some refer to it as "premium only")

Are you referring to Q&A 12? It covers only policies obtained through an exchange.

While there are certainly issues with funding individul policies through a cafeteria plan, you seem to be saying it is precluded. What has happened to cause that conclusion?

You said any comments. Who is advising about securities law compliance? And if you think that is an impertinent or puzzling question, you really need to make sure that no one will ever claim that is within your duties and your service contracts with MEP 401(k) plans should disclaim any responsibility for advising about securities law compliance.

Are you married to the FA or something? The FA does not touch any funds unless the FA is a custodian and there is no reason for that. The money goes from the employer's payroll to the IRA that is set up and designated by the employee to the employer. Under a 5305, the employer chooses an IRA provider, sets up the IRAs for each eligible employee with the provider, and the deferred amounts are sent to the provider with instructions about the amounts to be credited to the various employees' IRAs.

Agree with Bird plus the employer sends the funds to the participant's IRA. The participant never touches the money.

5304 provides that the individuals choose their own IRA providers. The employer does not designate the provider, as under 5305. Many financial institutions do not have a product that supports a 5304 so it can be tough on individuals to find an IRA to go with the SIMPLE.

If the employer wishes to take the position that the plan is not an ERISA plan, then everything about QDROs has to be done by venders. The employer cannot be involved. I would argue that the employer's limitation on venders based on which ones will administer QDROs could be a problem unless there is an adequate number of venders.