QDROphile

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.

There are many contract providers that will handle the domestic relations orders. They did it of necessity and control before the tax regulations put into question whether or not we really have non-ERISA plans any more, except for government and church plans. The relationship question is now more complex because it puts the ERISA question sqaurely in faces. Under ERISA the QDRO determination and adminstration if a fiduciary function. Some providers are willing to step up and others try to aoid the question or avoid fiduciary status.

A lot "shoulds" in the last post are the opinions of the poster and not legal requirements. I don't necessarily disagree with the "shoulds" with that understandiing. With respect to your question about what the plan is required to do under ther terms of a domestic relations order, see section 414(p)(3)(A) if the Internal Revenue Code. We don't have any guidance about how far that goes. The provision is a refuge for victims of Fidelity, J.P. Morgan, and other system-driven administration.

The document at the site provides a nice example of how the Depatement of Labor can't even read the statute when it comes to QDRO matters: "QDROs must contain the following information: The name and last known mailing address of the participant and each alternate payee"

Is the employee getting any emoluments in July? Employment is as employment does is a good standard.

How can can you start in 2014 a profit sharing plan for the 2013 calendar year?

What year would be ther intitial year of the new profit sharing plan?

Did the person who drafted the plan have the language or legal skills or foresight to distinguish beween "add" and "offset? Plan interpretation is usually the province of the plan administrator, although the plan administrator can look to many sources for advice.

The EBSA website has a lot of resources for fiduciaries and directed to fiduciaries. I don't know where one gets the idea there is anything new about the idea that fiduciaries need to know their responsibilities and that they would need education if they don't already understand them. Actually, I do. The DOL has been especially active on the issue of fees and expenses and making fiduciaries aware of responsibilities to understand fees and evaluate them. That has been coupled with efforts to make it more difficultt for providers to diguise fees.

It is truly noble and upright for a record keeper to separately state elements of the record keeper's fees. Whether or not it is reasonable for the fiduciary who negotiates the fees to approve a certain fee for something that is provided (or whether or not to provide it) is another matter and involves evaluation of what is being provided and the value of it to the plan and its participants. To answer you question, I do not see plans with such an "automatic" charge. Provision of investment information, tools, and advice can be part of the services contract.

Plan terms should be consulted, but there is no legal impediment to rolling back with the 60-day limit. To the extent the full amount of the distribution (determined before withholding) is not rolled over (to the plan, an IRA, or other eligible retirement plan) within 60 days, the amount that is not rolled over is included in gross income.

With respect to the qualification of the domestic relations order, it is a discussion of what is right and wrong and a discussion of what is practical and what is not. It is so impractical to disqualify for the reason you suggest that it is wrong legally as well. A very recent court case likened the qualificatiion process as going through a checklist. I think it was an oversimplification, but the court made the point that if all items for qualification were properly in the order and no items in the order were forbidden by the applicable rules, the plan administrator should determine the order to be qualified. Can you point to anything in section 414(p) that suggests that if the order does not specify the name of the plan administrator correctly that it fails to qualify? I am sorry to say that because the other players are ignorant and the court does not care, you will probably get away with disqualification and another order will have to be issued, causing additional delay and expense. By the way, since you are neither a lawyer nor a fiduciary, how is it that you are determining or advising about whether or not a domestic relations order is qualified?

Listing the plan administrator correctly is not a requirement for qualification. If you want to punish someone for not paying attention to you, I suppose the adminstrator could disqualifiy the order, but the better practice is to disregard matters that are not important. You might findthe plan administrator 'splainin' to the judge why attorney's fees should not be imposed on the administrator for an improper disqualification. You will just create more work for everyone in any event. Who is paying for that in time or otherwise. If you are obsesed with sweating the small stuff, let's have a discussion aobut how bad a practice it is to namen the emplopyer as plan adminsitrator of a retirement plan. That has much more important implications.

Unless you are misuing the term rollover, none of the MPP attributes survive a rollover. The dollars are just rollover dollars, subject to the terms of the plan concerning rollover dollars. The plan could allow distribution of rollover dollars at any time.

I think the exclusion would get unfavorable attention if not outright challenge unless you can find a way to detach the hours feature of the standard or provide eligibility if the statutory 1000 hours standard is achieved. I am assuming that this is not a government or church plan.

Are you describing a SEP? Would a SEP and its rules be meaningful if what you describe could occur without following SEP rules?

Given that the IRS has determined that the essence of an ESOP is simply investment of plan assets in employer securities, the first question is whether or not a Roth account can be invested in employer securities. I am aware of no proscription. Next question: Can elective deferrals be part of an ESOP? Absolutely. Next question (other than about the wisdom of the proposition)?

Running elective deferrals through a section 125 plan essentially bridges to a 401(k) plan, but there are no extra tax benefits, no shortcuts on maintaining the 401(k)plan, and the extra connection usually causes confusion. In particular, the 401(k) deferrals continue to be included in FICA wages. Otherwise you might see more of such arrangements.

So the employer forgot to start payroll deduction that led to a tax event. Did the loan payments start after the discovery? Who gets a pass on payment simply because of the tax event? If the employer is feeling guilty, the employer can do something nice, but that does does not mean that the plan administrator looks the other way on loan payment or the employer facilitates continued default by not deducting for payments in accordance with the contractual arrangments of the loan. Mistakes get made, but that does not excuse their continuation.

It is not a matter for plan sponsors, it is a matter for plan administrators. Plan administrators are responsible for plan assets and loans are plan assets. In order to make a loan, the plan administrator is required to believe that the loan will be repaid. The payroll deduction feature is very comforting in suport of that determination, but it is worth much less if the employee may elect out. If the arrangement is optional with the employee and is terminated, the plan administrator will them be faced with whether or not to enforce the loan by other means, as would any creditor. That will not be a very comnfortable decision and enforcement is not a fun process. The plan is owed money; the plan administrator cannot lightly walk away, although the prudent decison may be that is is not worth extraordinary efforts to collect. Better not to be in that position in the first place by allowing easy escape from the payroll deduction.