QDROphile

Does you boss explain anything?

Mojo: I am not discussing the propriety or consequences of the actions taken. The question was how to document what happened, not how to evaluate if anything is wrong or how to fix it. What happended was that the operations of the plan were suspended (rhymes with amended) and then restarted. A convenient and accurate way to record what happended is to create a plan document, called an amendment, to describe what happened and when (effective dates). That documentation is simply an objective discription of events. Nothing about documentation of fact suggest the the act of documentation makes what happend proper or without further consequence. If you and others want to explore and assist with the comliance issues that are implicit in what happened, go ahead. You suggested an inquiry into what might have been recorded that would constitute an amendment that properly and effecitvely changed the plan operations. Don't confuse trying to find evidence of proper actions that would avoid compliance issues (an amendment) with simply documenting what happened (an amendment). Amendment itself is neutral unless the amendment is inaccurate, such as backdating execution. Time, form, and substance of amendment are what determines compliance.

The plan does not have to give a participant the ability to to determine which investment funds will be liquidated to fund a distribution.

You are aware that the IRS allows documentation of amendments effective mid-year if the amendment document is adopted by the end of the year with a retroactve effective date.

For qualification purposes, the plan should do whatever it is ordered, including assignment of benefits that accrue after divorce and benefits that accrue after a prior QDRO. Exception: the order cannot encroach upon the survivior benefit of a QJSA. No comment on what state law will allow. I have heard that courts are reluctant to revisit settlements, but I can't see why a court would care if it is not contested.

Mojo: What were the changes if they were not amendments? I am willing to bet the that changes were dictated by a person with amendment authority or that person's agent. You are correct that the amendments may not have been conducted in accordance with the prescribed procedures for amending the plan and one hopes to cobble together enough communications to resemble whatever the plan requires to avoid questions about effectiveness. What is to be done if the amendments were not effective is a different question than how to document what was done. The question was about documenting the events.

Document the action as plan amendments with the appropriate effective dates for cessation of deferrals and loan payments and restarting deferrals and loan payments. The loan payment part is most troubling. This assumes everything happened within a year and rthe amendments are adopted before the end of the year. The plan terms should reflect what happened, which is the other side of the coin of the plan should operate in accordance with its terms. I hope that that the new owner is donig some sort of pennance.

This is all a matter of plan interpretation. The law does not compel any particular terms, arrangements, or actions after termination of employment except with respect to failure to pay timely and maybe no distribution of all the balance other than the loan -- maybe.

I don't think it can be done for an eligible rollover distribution.

A trust can be employed to commit fraud. :-)

Who is responsible for 403(b) compliance? That person needs to be able to explain how it fits the rules. By implication under 403(b), employee choice concering contributions is allowed only with respect to salary reduction agreements. There is no salary reduction aspect of the arrangement. If you take away the the wierdest part of the arrangement - the election by the employee for the 403(b) contribution and the possibility that the employee would fail to elect and therefore lose the contribution (how would that happen ???) - the arrangement would be an employer credit for healthcare (e.g. for elective coverage), with the employer making a choice about contributions to the 403(b) plan based on cost of health coverage (how much of the credit was used). The allocation of the contributions would be based on individual circumstances and not uniform, so the allocations would have to be be tested. That is the closest I can come to rationality and convention. the employer's employee-by-employee choice of contributions is still bothersome. I can tell you it is not a section 125 arrangement even though it has some appearances of section 125 features. This looks like it was dreamed up by a partially informed good heart or some informed person who had no fear of boundaries.

I think everything under 457(b) (elective or nonelective) is a deferral for purposes of the regulation. What was intended by the 401(k) plan language is up to the plan administrator (or whoever has interpretive authority) to decide. The participants under the 401(k) plan are big dogs unless the employer is governmental (and the 401(k) plan is grandfathered). I would be surprised that the 401(k) plan is intended to cut back on the big dogs. But then, I am a cynic.

It depends on what the 401(k) plan says. The deferrals under the 457(b) plan can be included in compensation for purposes of the 401(k) plan. Treas. Reg. 1.414(s)-1©(4). Without an express terms for inclusion, the definition of compensation in the 401(k) plan probably excludes the 457(b) amounts,

You should get acquainted with Rev. Proc. 2013-12 and what is suggests about your specific question as well as the greater implications. An amended form 1099 is appropriate and any nonrollable distribution amount is taxable. Maintaining ineligible amounts in an IRA or other eligible retirement plan has adverse consequences.

The answer depends on the nature and structure of the acquisition. It may be a big deal, but what difference will it make concerning your ongoing employment? In other words, what will you do differently depending on the answer?

Be very careful about accepting or acting on any advice that you may get from an unregulated source, especially advice in response to general questions. The mutual fund organization probably has every incentive to welcome money into the plan. That adds credibility to the statement that rollovers are not allowed into the plan under the circumstances that were described to the mutual fund organization. The days of having one's own 403(b) arrangement are over, except for certain grandfathered arrangements. Employers now are required to take ownership of plans to a certain degree and plans are getting more strict about complaince and administrative issues.

My thoughts are to get straight when restriction is required (hint: not when the DOL thinks), get straight what restriction is required ("hold" implies a much broader scope that what is provided in the law), give high priority to determnation of qualification, and rethink what the plan should say with respect to the 401(a) (14) requirment. It may be too late to have the best possible provisions in the plan and QDRO procedures on most of the points. You may have to focus now most on what restriction is required and the best way to accommodate start of benefits.

My first thought is the same as yours. The fees paid to the provider reduced the investment return of the account. For custodial accounts with mutual funds or their scammy insurance equivalents, that is a pretty simple concept. The investment return for some insurance products is not quite so transparent and it is possible that fees relating to the product did not identifiably reduce value or benefits. Following that thought, the refund should be used to restore the asset that was charged with the fee and the account that held the asset. A less precise approach was taken by the Department of Labor with respect to demutualization proceeds, but the sponsor did not get the demutualization proceeds directly, either. Also, demutualization proceeds typically were calculated based on many years of ownership of group insurance contracts. Associating the proceeds with the individuals who were the participants was completely impractical.

Forfeitures are annual additions. Allocation to a participant that does not have compensation for the year of allocation will violate section 415. There may be more reasons not to allocate as desired.

See section 125(f) of the Internal Revenue Code for refinement of what a section 125 plan really covers.

Where is the requirement that an employee must get spouse consent to designate a beneficiary other than a spouse?

What has the IRS got to do with the SPD or SMM? That is not a qualfication requirement.

So what does ERISA say about spouses and employer sponsored life insurnace? Contrast the tax code that says, for example, that a pension plan plan participant cannot designate a beneficiairy other than a spouse without spouse consent.

The rules and procedures for changing deferral elections are the rules and procedures for changing deferral elections.

What do you mean by "Check for QDRO?" As a naked proposition that is a very dangerous thing for a plan to consider. OK if you mean check to see if the plan has received a domestic relations order. I suggest checking for plan terms that apply to circumstances of an unmarried participant's death. Some plans say that a former spouse (a beneficiary by default or designation) will not be the beneficiairy unless the designation is made after the divorce.