QDROphile

No comment on the plan terms, which may be the cause of the problem. The Department of Labor issued a Field Assistance Bulletin on demutualization proceeds that might be of some help.

As long as there is no uncertainty or ambiguity about the plan that is identified by the QDRO, I would not disqualify. The notice of qualification should specify the new and old names, somethng like "ABC 401(k) Plan, formerly known as the AAA 401(k) plan." The courts have been very forgiving about failure to specify the correct name of the plan as long as there is relative certainy about the plan that the order intended to cover. Don't waste your time or the time of others on something that is not important. If there is some reason to doubt that the order is intended to apply to the plan, then you might need to be more demanding.

A plan can be drafted to allow less than the law allows. I doubt that the plan has such provisions applicable to the circumstances you describe. Why would anyone want to provide for proration?

But there is a foul, so the correction should be done in accordance with EPCRS, and SCP should be available.

Not necessairly. The custodial parent may have more need for child care after losing the child care capability of the spouse. For example, the noncustodial spouse may have worked part timre or may have had a non-overlapping work schedule that allowed for child care while the custodial spouse was working.

Consistencey rule.

Let's not lose the big picture here. Disclosing a payroll period match without a true up IS A BIG DEAL. How many times have I received a call from an HR manager who had a footprint on his or her buttocks from a kick from a BSD executive who figured out that he or she did not get the maximum match despite a maiximum deferral under the plan? If the disclosure is not in the SPD (and the election form and every other communication about the match) someone will get shortchanged and will be justifiably angry and possibly will have a legitimate claim. So don't even talk about the deadline for publisheing the SPD or SMM. Get out there and disclose OR do the right thing and reinstate the true-up. By the way, you should check carefully to make sure you don't have a document problem. A pay period match without a true up has to be very carefully worded in the plan document.

Turning money over to the state should be considered as a last resort when the plan is terminating and the employer is dissolving and all reasonable efforts have been made both to locate the participant and establish an IRA for the participant..

This discussion has become far too chaotic. It appears that the bond is a fidleity bond for the benefit of the plan. The insured is State Street, as trustee of the plan and legal owner of the assets of the plan; that makes the plan insured. Some fiduciary has the obligation to make sure that the plan has the appropriate bond coverage. the fiduciary might be stat stree or someone else. State Street does not have to be bonded because it is a bank or trust company. All fiduciaries and those who handle plan funds must be bonded, Evidently the plan sponsor is a fiduciary, whidh is a common bad practice. The plan sponsor is bonded. Employees of the plan sponsor are fiduciaires or handle plan funds. Those people are probably bonded, but the terms should be examined to make sure. If the plan sponsor is a fiduciary and a corporation, all of the directors are fiduciaries (or at least the Department of Labor will say so) and the bond should cover them, but check the terms. It is appropriate for State Stree to use plan funds to bond everyone as described. Anyone with questions should start over from this context, including a criticism or correction of the description.

You might take a look at the Field Assistance Bulletin concerning demutualization proceeds for some applicable principles.

Now you have to wonder if the use of plan assets to purchase protection for the employer sponsor is a permissible use of plan assets.

Expect error. Attention to this matter is rare until there is a real question. The plan terms and plan operation problaby will not match or there will be no record of application of plan terms. The regulations speak to circumstances in which the employer does not actually record hours.

What do you mean by universal coverage? See IRC section 403(b) (12), usually referred to as universal availability. Note that this is not ERISA.

Possible economies or critical mass for certain services such as fiduciary and investment management. I don't favor MEPS of truly unrelated employers, MY point was more that that they are feasible and not to be feared. The question was "Can we have a MEP?"

What requirement is there for a binding factor other than a desire to particpate?

For defined contribution plans and participants who are not owners, the first distribution calendar year (a calendar year in which a minimum distribution is required is a distribution calendar year) is the calendar year that is the later of the calendar year in which the particpant attains age 70 1/2 or the calendar year in which the participant retires. Treas. Reg. section 1.409(a)(9)-5(b). An elligible rollover distribution is any distribution, subject to certain exceptions including distributions "to the extent required under section 401(a)(9)." IRC section 402©(4)(B). It is true that any distribution in a distribution calendar year is to be first attributed to the minimum amount required to be distributed for the year, even if the distribution is before the required distribution date for that distribution calendar year. But if no distribution is required for the year because the distribution is before the first distribution calendar year, no distribution is required under section 401(a)(9) and the distribution may be rolled over, subject to the other exceptions. I cannot answer your next question: If a particpant is age 72 and receives an in-service distribution during the year, how does the plan know that the particpant will not retire later the same year, making the year the first distribution calendar year and the first dollars of distribution attributable to the required distribution amount and therfore not rollable? The answer to that question may validate your statement that employment is not relevant when a certain age is attained..

Correction of citation: Treas. Reg. 1.401(k)-1(d)(2).

Please double check the point about being subject to RMD requirements based on age without regard for employment.

This analysis is similar to the analysis under that allows termination of a plan immeidately before a stock acquisition and not have the plan of the buyer be a successor plan. The target company controlled group (a one company controlled group) is not the same employer as the post-acquisition controlled group (a two company controlled group). The plan of the post-acquision controlled group is not a sucessor to the plan of the target company controlled group. This is an imperfect analysis, but a practical one that the IRS believes. Your circumstances work backwards. The post-acquistion controlled group that includes the plan sponsor is a different employer than the post-acquisition controlled group that includes the participationg employer (a one-company controlled group). If the participating employer no longer maintains the plan and is not in a controlled group that maintians the plan the employees have a severance from employment. Treas. Reg. 1.401(k)(d)(2). They cannot be required to take a distribution if the account balances are greater than the mandatory distribution amount. Confirm that the particpating employer is not eligible to particpate in the plan, which is probably tha case because most plans allow only members of the sponsor's controlled group to participate.

A little thought exercise: What if the employer allowed the employee to start vacation on June 10 and terminate at the end of the vacation? Same compensation, although I imagine that the vacation would have been paid as regular payroll while payment for accrued but unused vacation may have been a special check.

A multiple employer plan is feasible and not that much trouble. Some testing and reporting is done employer-by-employer, so some ecomomies of scale are lost and the serivce providers have to know what they are doing. The plan and trust documents will have to be amended. Spin off works, too, and will give each employer complete freedom and responsibility with respect to their plans.

How about an incentive to roll over directly? How about minimizing ability to try to cheat on taxes? Why do you think we have withholding anyway? We don't want the wage slaves to have too much opportunity cheat, only the masters and capitalists get that privilege.

There may be more elegant solutions, but if you want a step-by-step approach that is essentially self-explanatory, you would spin off the participating employer portion of the plan and terminate it. Except for the amendment to spin off and terminate, the particpating employer should not need additional plan documents. The trustee might insist on a separate trust document for the spun-off plan. A determination letter would be a good idea. It is a shame to terminate the spun-off plan. Someone should reconsider.

Next time (including the amendment suggested by BG5150) adopt terms that allow the plan aministrator to determine the effective date based on administrative practicality.

I don't think you can transfer between 403(b) and 401(k) plans. If you could, the you should also be able to merge.