QDROphile

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.

At one time there was a provision in the tax regulations that spoke to the ability of anyone to pay the COBRA premium for someone, leading to a fantasy scenario that a hospital treating an uninsured person could discover that the person was still eligible for COBRA coverage. The hospital could pay the premium to gain the coverage for the person and have insurance pay for the some portion of the cost of care, which would be much higher than the cost of the premium and a better recovery than the hospital could exepct to get any other way. Do you need authority to permit it?

K2retire: You can't say that with confidence. That is a typical arrangement suggested by the somewhat disjointed post, but the procedures for retirement or removal of a trustee and the replacement of appointment of a new trustee are determined by the trust terms. Those terms may or may not speak to the corporate governance aspects of the arrangements. In fact most prototypes avoid any statments about goernance matters, much to the dismay and confusion of hapless HR personnel who have no clue abut corporate governance matters, which brings us to Eleanor Rigby's father's most appropriate questions.

The Form 5500 for an FSA is required because it is a health plan. As with other health plans, it may be funded through a section 125 plan. As an ERISA health plan, it is subject to the ERISA trust requirements. The DOL's limited nonenforcement policy is mostly either misunderstood or disregarded. If done properly, the FSA can be administered through a checking account of the employer.

Determining qualification is a fiduciary function. You need to understand if the service provider will be functioning as a fiduciary with full responsibility of if the service provider is going to try to duck the responsibility and leave the plan administrator responsible. If the plan administrator remains responsible, then the plan administrator needs to attend to that responsibility. If the service provider is going to be the responsible fiduciary, then the appointing fiduciary needs to monitor as it would for any other appointed fiduciary. One question: Who is responsible for the written QDRO procedures? Then you need to figure out if the QDRO fiduciary is handling plan assets and is required to be bonded. Interpreting domestic relations orders and determining qualification involves the ability to direct the dispostion of plan assets. Maybe that becomes a test question for your interview. If you are having the participant/alternate payee bear some of the administrative cost of the QDRO processing, then the plan administrator has to determine that the cost is reasonable.

It is permissible for an employer to cover more of the employee cost of premium than the employee elects to forgo in pay under a cafeteria plan. You may have to come to grips with discrimination rules depending on circumstances.

Would you be more comfortable if it were described that the employee was entitled to a certain amount of cash compensation but could elect instead to have the employer pay the health coverage premium that the emplopyee would otherwise have to pay to get coverage?

As a practical matter the plan that is making the distribution will not send the entire balance as a direct rollover. The required distribution amount will be sepeartately distributed to the participant. The distributing plan could distribute the entire balance to the participant (less the 20% withholding on the rollable portion) and the distributing plan would have no care or claim if the new employer's plan improperly accepted the entire distribution (plus the amount withheld). The accepting plan would have some qualification issues. It has reason to beware of the required distribution issue with this participant and cannot accept a rollover without reasonable belief that the amount accepted is an eligible rollover distribution.

Yes. That is why it appears that a required distirbution will occur for the 2013 distribution calendar year even if the distribution/rollover occurs in 2013. If the distribution occurs in 2014, a required distribution will occur for both the 2013 and 2014 distribution calendar years. No required distribution from your plan until retirement from your firm.

While I am familiar with the concern that ostensibly self employed persons (partners) remain self-employed as they move from firm to firm and therfore never have a retirement or severance from employment, I look to section 401© to normalize employment arrangements. Therefore, leaving a firm and joining another is a severance from employment and allows a distribution. Leaving a firm after normal retirement age is retirement from that employer for purposes of section 401(a)(9). Working at a firm past normal retirement age means the person is not retired from that employer (or that employer's plan, including amounts rolled over into that plan) for purposes of section 401(a)(9). Trouble begins when firms allow "retired" partners to continue to dabble in practice. They are "retired" in many senses, such as they no longer participate in firm administration or receive benefits such as health coverage. However, they generate revenue for the firm and are compensated, may on W-2, maybe on K-1. Their continued presence as an elder may be very valuable to a firm or it may be an accommodation out of respect, affection, or lack of backbone. They are working, albeit at some reduced schedule. Are they retired for purposes of section 401(a)(9)? I am am concerned that if working in any capacity after normal retirement age is not retirement for section 401(a)(9) purposes, it is a great opportunity for abuse of the rules. But how does one measure a level of work that is bona fide? Do we look to section 409A standards for separation from service and say that 20% is the mimimum level to avoid retirement? Or do we play safe and say that any post-retirement age significantly reduced work status that also involves loss of other attributes of regular employment status (e.g. health benefits) will be treated as retirement for section 401(a)(9) purposes? Reduction to part-time work is not retirement, but where does it cross the line for persons who are or were owners (partners), whether or not at 5% ownership?

Exactly. It is not the TPA's concern that the plan was terminated and liquidated as long as the TPA followed the instructions of the plan administrator unless the TPA undertook responsibilities for comnpliance and planning that would have been unwise to undertake.

If the plan assets have been distributed, your job is over. Whether or not your are engaged to do something else is up to you, keeping in mind that if you are re-engaged, it should be by the same plan administrator that hired you in the first place. You probabaly have confidentiality responsibilities with respect to the plan. The plan sponsor seems dumb enough that it probably was the plan administrator. If the plan sponsor's identity has become confused because of the transaction, the person who wants to engage you should be the one to explain and convince you who the successor plan administrator is as a result of the transaction This is not a very good place to get a lesson in corporate law. You may need to pay for some education to ensure that you are engaging with the appropriate party relating to the plan.

The plan should have been designed to forfeit the benefit after failure to locate after appropriate efforts.

Most states have laws that proscibe deductions from pay without employee consent.

The law allows payment for stock distributed in lump sum part in cash and part by promissory note, and the plan may have terms that allow payment in accordance with that law. The rules are complex and ther are standards and conditions. The summary plan description of the ESOP should explain the distribution and payment options. Based on all of you posts, it appears that the real problem is the the employer does not have the funds to pay the benefit in accordance with the plan terms or original expectations. What is needeed is a competent adviser for the participant to understand all of the facts and circumstances so the participant understands the participant's rights and what make sense in terms of compromise or challenge. Having theoretical rights may be nice, but that does not guarantee that the participant will get what is due on those terms. The situation is complex and the best solution is most likely not going to be found in the books or in this forum.

I see the words "state agency." No fear of Department of Labor. If you need to force the issue, you need to go to the court whose order is not being obeyed.