QDROphile

I think that best practice is for the employer to oversee the required distributions with respect to its plan. I think the employer properly discharges its responsibility if it receives a representation from the particpant that the participant is receiving a distribution from another contract and specifies a distribution amount that is greater than the required distribution amount that is calculated with respect to the plan account balances. One can argue what the 403(b) regs require by way of determination that the "contract" meet the 401(a)(9) requirements.

The employer is responsible and the subject should be covered by the information sharing agreements so the employer is able to manage its responsibility. The employer can can hire a manager, and the manager can be one of the annuity providers, but I have never seen that work out in practice.

Wouldn't it be nice if the plan document had adequate provisions to cover the situation and answer the question? Next time you are in the market, take a look at the USERRA provisions and then ask how much more you will have to pay to learn how to adminster in accordance with the law. Add that to the price of the free document. The United States is almost always at war, and USERRA covers almost all military absence, so anticipate some need. The plan should cover imputed service and imputed compensation. The post is unclear if the plan has a 401(k) feature. If it does, the plan has to provide deferral opportunity with respect to the military leave.

What does your contract make you responsible for? If your engegement includes assistance with the Form 5500 and you become aware that something is inaccurate, at a minimum you need to report the inaccuracy to the person responsible. Even if Form 5500 is outside of your engagement, a word to responsible person is a good professional courtesy, but don't make it your responsibility by how you report. An an auditor might pass on the net of zero between the two years, but it does not mean that everything is square on taxes.

What kind of plans are you talking about? This issue can be dealt with by an understanding of the rules and appropriate plan terms and communications to participants. Those elements are missing from the mass produced documents and asset based marketing practices that prevail today. You might better argue that the rules should be changed to accommodate the market realities. The potential abuses pale by comparison to what is now passes for legitimate plan design, so removing the complexities would not do great harm.

I think one can say that there is a substantial risk that there will be no change in control in the next three years (depending on the circumstances, fo course). I think it is tougher to say that there will not be a change of control or dissolution in 20 years. A family-owned business might have that stability. An early stage tech company will not.

One way to look at the arranangement is that the compensation is subject to a substantial risk of forfeiture. That means it is not deferred compensation. The employer can accelerate the vesting at will (the employer has chosen to state a limitation on that ability) and pay at vesting. That puts a lot of pressure on the change of control as a substantial risk of forfeiture. I would not accept an unlimited time frame for the vesting event.

Principle #2: The record keeper is not the boss unless the record keepr is a fiduciary (ask and watch the backpedaling). The determination of eligiblity is a fiduciary matter and the fiduciary must act in the interests of the participant, which may mean no arbitrary restrictions, but reasonable administrative standards are also permitted. If there are administrative restrictions, they should be described in the SPD. Better to have them in the plan document to take pressure off the fiduciary.

The design is not compelled by law, but such designs can serve well. Without more details, the purpose and benefits can't be evaluated. It is posssible that the design has become corrupted or no longer serves its purpose, or the desire behind the design has changed.

Plan terms may have to be amended to describe the new approach to diversification.

Are you concerned that a particpant is entitled to exercise diversification rights at an earlier date than the expected distribution on termination? Or do you mean that the ESOP has been frozen? Freezing the ESOP will not excuse the plan from providing diversification.

I doubt that the plan document is silent and I suspect that the plan document provides for distribution in normal form (usually a single life annuity) when payments are required to start unless another form is selected. You can't expect the plan to address this specificall with respect to QDROs. The ODRO requires payments to start, so notify the AP what will happen if the AP does not respond in a reasonable time, taking into account any mandated notice periods. If the AP is unresponsive, then start payments. This assumes the AP has choices and that you have the relevant information to determine the payments. You might compress the process if the AP has no choices. #4 is negative for several reasons. Refusal to cash checks is a different problem that does not inform the timing of distribution.

Directly or indirectly the calcuation period is specified. If you think it is not specified, a match function that is based on compensation probably encompasses compensation for the entire year. The timing for delivery of contributions may be a differrent matter, but should be addressed in the document, if only to say that amounts may be contributed during the year. A true up may be inferred from a combination of calculation based on the entire year and ability to deliver contributions during the year. The document is inadequate if it does not cover the matters. What usually happens is that the document is based on the year and payroll-heads dictate pay period matching with resulting operational failures.

I don't mean to hijack the post, but could you explain what you mean by an in-plan transfer? I have not encountered any plan provision that would allow amounts from participant A's account to be transferred to participant B's account without an intervening distribution. Maintaining an account for participant B as a beneficiairy account as participant A's beneficiary is OK, but I think such an account would need to be maintained as an account separate from the participant B account. Depending on how one defines "account" at a minimum the former participant A account balance woule be subject to different terms than participant B's account (e.g. the amount would be distributable). I suppose one could designate all amounts held for the benefit of B as B's "account," but that account would have to be broken down by attribute and the beneficiary account would effectively be recognizable. By contrast, a distrubution to B and rollover to B's account can fit normal document terms because a participant can have rollovers in the particpant's account and rollovers are specifically described by law. I am not aware of any legal underpinnings for how I imagine an in-plan transfer would occur.

"It seems to me that the regulations do not exclude service credited before a company became part of a controlled group." The regulations do not exclude service credited before a company becomes part of a controlled group, but they do not include such service either. Since there is no rule that service before becoming an employee of the controlled group is to be counted (see section 401(a)(4) regulations that allow award of prior service credit if the award meets certain conditions), the regulations are simply establishing that all service as an employee in a controlled group, even in an ineligible position, count as service. Co. B employeees did not become employees of the Co. A until January 2012. That is when serivce starts for Co. B employees unless the employer chooses to award prior service credit and the conditions fit section 401(a)(4) regulations (which they should). Co. B employees have 3 months of service as of 4/1/2012 -- or a hire date of 1/1/2012, if you will. That does not mean that they cannot be excluded from the Co. A plan either before or after 4/1/2012. This view of controlled groups is exactly the same as the view that lets us terminate 401(k) plan before acquistions and not have the buyer's 401(k) plan be a replacement plan.

The answer should be in the plan documents, which would include written loan policies. The plan can be more restrictive than the law.

You might ponder Treas. Reg. section 54.4975-7(b)(5), which may be reflected to some degree in plan terms.

All of the matters that you are dressing are local court rules and procedures that have nothing to do specifically to do with qualifiction of a domestic relations order except the court's desire to see that the plan administrator has no objection to the proposed form of the order. While some of the matters appear to be relatively typical and you might get a response, this is not a very good forum for advice about such details. Very often someone in the clerk of court office will be helpful.

The law allows loans to be rolled over directly from a 403(b) plan to a 401(k) plan. The plans or those who administer the plans might not be accommodating.

Correction vs. true-up. Good point, but a systemic problem must be corrected with the first correction of the plan faliure. A plan cannot correct the results of a systemic problem under SCP year after year.

Your concern appears to be well founded. The match could exceed what is specified in the plan terms.

legort69: This is completely off-topic, and I can't quite tell from your description, but I am always suspicious when some limit relating to deferrals applies with respect to the 401(a)(17) limit on compensation that the plan is, shall we say, not optimally designed because of a misconception about how the 401(a) (17) limit operates.

I thought source matters in an EPCRS correction of a section 415 violation.

BG5150's post is based on an IRS ruling that you should review for the appropriate standard. There has to be a risk of liability and that requires an implication of fiduciary breach. It is not pretty stuff and requires serious consideration, but there are not other good approaches.

One way to look at it is that two mistakes occurred, both involving a failure to implement an election properly. Under EPCRS principles, all failures should be cured. Under EPCRS the "client's" solution is improper in two respects, (i) not correcting the Roth deferrals that were too much, and (ii) not following the prescribed method for correcting missed regular deferrals (the method does NOT prescribe corrective contribution of 100% of the missed deferral). The proposition might be approved by the IRS under VCP, but I think it is quite risky under SCP.