QDROphile

"Let's say the document contains this acceleration provision but also contains the nonassignability provision below ***" "Your thoughts, please." I think one must be able to look at all the relevant provisions before one can interpret.

While resignation is certainly an option and may be the most attractive choice for the adviser because of general risks of dealing with people who do not want to comply with the law, is there some governmental or professional regulatory or ethical mandate that compels resignation? Generally, an advisor who is not a fiduciary, does not mis-advise, and does not assist (including by concealment) should not be responsible for malfeasance of the responsible authorities. Egregious violations such as theft fall under other considerations. An adviser has no resposibility to correct a prohibited trnasaction unless the adviser is a party to the transaction. The prohibited transaction must be properly reported (e.g. on Form 5500). I am not arguing against the wisdom of resignation, but I would like to know if there is some authority that all the responders are observing.

The question is too broad. Part of the answer is that an exclusion cannot be effective for those who have qualified for the contribution/accrual before the amendment, by accruing more than 1000 hours for example.

jpod: Are you saying that if an employer meets the 401(k) plan definition for maintaining a church plan that the 403(b) plan of that employer should not be subject to 410(b) requirements (just as a 401(k) plan of that employer would not be subject to 410(b))? Or do you have someother analysis or authority?

If the employer by plan design or administration participates in the ordering of the contributions, so that the emplyoyee is not completely responsibile and in control of the amounts that go into a plan, both plans are ERISA. For example, if deferrrals are automatically switched from the plan with the match when the deferral for maximum match is attained, both plan are ERISA plans. That is not to say that both plans are not ERISA plans anyway. Employer participation in the integration of plan operations just makes it certain. I also happen to be one of those who believe that all 403(b) plans are ERISA plans unless they have an express exemption, such as church and government plans.

What you describe is the plan cutting the check to a person designated by the estate as a courtesy to the estate to save the estate some administrative steps. The tax reporting by the plan is still that the plan distrubuted to the estate. This does not seem like a huge benefit to the estate and it could implicate the plan as a conspirator in some evil machinations by the estate or the estate beneficiary to evade taxes or something else like a bogus rollover. The plan does not owe the estate any accommodation. It only owes the distribution.

If it is all about the employee's election, then we are talking CODA. This can also be a problem under section 125 and I see a lot more of it under section 125. The employee forgoes health coverage and gets higher pay compared to an identical employee who gets employer provided health coverage.

You might consider how this fits with the rules on one-time irrevocable elections.

Although most defined contribution plans, including 401(k) plans, are designed to allow distributions after termination of employment, they can be designed to hold the funds until retirement age. Age 59 1/2 is a common age for access among such uncommon designs. The amounts held under the plan are not the "company's" funds. A church plan is not subject to ERISA requirements unless it elects to be covered. SPDs are among ERISA requirements. None of this post is a comment on your circumstances.

Treas. Reg. section 1.411(a)-11(e)

Perhaps the most civilized and practical thing to do is amend retroactively to provide for a true-up.

You are correct that an eligibility definition based on measure of service or a proxy for measure of service could be a problem under section 410(a) even if the excluded group does not cause failure under section 410(b).

The plan cannot require SSN or date of birth as a qualification requirement, so a mistake is not relevant to qualification unless it calls into question the identity of the participant or alternate payee, which is exteremely unlikely with a difference if a digit. The plan can require a SSN as a condition of distribution because the plan has to report. The plan can require a date of birth if needed to compute a benefit (defined benefit plan) or to comply with required distribution rules (really lame if the QDRO is administered correctly). The plan should not require that the SSN or date of birth be provided in the order.

You are so optimistic about the capability and performance of drafters.

Review of a domestic relations order might be interesting under those circumstances. Which plan does the order "clearly specify"?

The plan may have a blackout period in connection with the change of investment provider; appropriate advance notice will be required. The restatement need not be effective as of the pror January 1 (or other first day of plan year). Care shoud be taken either way to be sure the plan operates in accordance with its terms. Are you serious about the scope of allowable investments? If the plan is open to so much trouble, one might think it would indulge in a custom document.

A 403(b) plan of a section 3121(w)(3)(A) or section 3121(w)(3)(B) organization is exempt from all 403(b) discrimination rules. Is the exemption from the rules listed in Treas. Reg. section 1.403(b)-5(a)(1) -- borrowed from the qualfied plan rules -- also conditioned on being a section 3121(w)(3)(A) or section 3121(w)(3)(B) organization or is there room for exemption from the -5(a)(1) rules based on the section 414(e) church plan standards? For exemple, a non-electing church plan under section 414(e) that is not the plan of a section 3121(w)(3)(A) or section 3121(w)(3)(B) organization would not be subject to by the current provisions of section 410(b) if the plan were a qualified plan. If the same organization had a section 403(b) plan, would it be subject to the post-ERISA section 410(b) standards?

What are you doing about spouse consent?

Section 72(t)(2)© is up for interpretation, but I think the intent is that the 10% additional tax does not apply. No comment on the specific code for the form.

I don't know how an "Asset Management Fee" works. First, some expenses cannot be paid by an employer. The IRS ruled that comissions on stock sales could not be paid by the employer because commissions were inseparable from the price of the stock. Second, procedural and timing issues can affect the viability of employer payment of expenses. As suggested by BG5150, expenses that are separately billed and paid directly by the employer are the best circumstances. Long delays are not good circumstances no matter if the employer agrees up front to pay and then reimburses late or defers the decison to reimburse until some time after the expense is actually covered. I agree that a contribution cannot be allocated to a participant who is not eligible for contributions and participants who are former employees will not be eligible for a plan year after the year of termination.

An employer can make a discretionary contribution on whatever basis the employer chooses, as long as the plan allows a discretionary contributions, the contribution does not run afoul of applicable limts, and the contribution is allocated in accordance with plan terms. The employer could use the average daily temperature as a guide. Are you asking if the expenses can be paid by the employer though reimbusement of expenses paid by the plan, which, among other things, would change the allocation to participants as compared with a contribution of the same amount?

I disagree. ABC employees have no service in the XYZ controlled group, which maintains the plan, until the acquisition. They can be given prior service credit, but it is not required.

Please explain more about termination of the trust. Why does it need to be terminated in connection with the amendments that would be done to have it serve as the trust for a single plan and file a single Form 5500? If you don't get some pretty good answers from the trustee, you should consider changing the trustee in the process of amending the trust document to serve the current needs. Changing the trustee does not terminate the trust, either.

Do you have a reason not to clean up documentation, simplify, and file a single Form 5500 with the one plan?

How high is up?