QDROphile

Plan terms control. Most plans do not allow a distribution on account of termination of employment if the employee is rehired before the actual distribution.

Use such terminology if you don't care about the outcome. Any plan adminstrator worth its salt would not allow the term.

I believe that after the new section 403(b) regulations there is no such thing as a non-ERISA 403(b) plan, nothwithstanding the disingenuous rationalizations by the Department of Labor in its field assistance bulletin. The most we can get from the FAB is that the DOL is not looking to expand its scope to pick up new plans -- it is not looking for more work or more trouble. That does not mean that the plans are not subject to ERISA. The categorical exceptions still apply: governmental and church plans, for example..

The ESOP document should explicitly describe the automatic put rather than implement it implicitly. The cash can be directly rollover over. I can't remember the details of the IRS letter ruling on the subject, which may have been about an S corporation, but the IRS reviewers don't have any problem with the shortcut when a cash distribution can be required. Note that the determination letter does not cover the the rollover.

Why should the plan admnistrator undertake any risk in this matter by departing from conventional interpretations and arrangements?

Craft some class description that fits the participant and is exclusive and provide that participants within the description that are not HCEs will receive an allocation based on a different standard than 1000 hours. The allocation will have to be crafted to deliver whatever you believe the required benefit to be. You might limit the duration of the provision to suit the present circumstances and then be ineffective.

Too vague for my taste. Also, I don't like letting other laws infiltrate the plan document.

If the employee in not highly compensated, amend the plan to provide the benefit to her if that is what is desired to comply with Canadian employment law.

There are no well drafted prototype plan documents. It is almost a logical impossibility.

The response reasonably assumes the tha 401(k) plan uses the safe harbor for hardship distributions and that the same employer sposors both palns. If you don't like the answer, consider amending the hardship provisions to avoid the suspension.

A typical "marital portion" provision will take into account the entire accrued retirement benefit because it is recognized that defined benefit plan accruals are are often not linear, and are back loaded. The approach varies by circumstance and local custom, such as whether or not you are in a community property jurisdiction. It is possible that (a) you misunderstood, (b) someone did not explain it well to you or misrepresented the meaning, or © the document you approved was changed without your consent. Relief is unlikely for (a), (b) is difficult to prove and may not matter, and © is difficult to prove unless you have a document record. You are almost certain to be able to change the order if your fomer spouse agrees (relief from (a)). What sort of help are you asking about?

If you want to be a stickler about prohibited transactions, this is one. Carrying out your desire to help the charity is a use of IRA assets for a personal (i.e. not retirement savings) benefit. The more you make it look like not a conventional investment, the more you make it look like a prohibited transaction. For example, not having a conventional repayment schedule indicates that some other interest is being served. Your IRA is for your retirement, not for passing wealth to another person -- a scheme that does not pay until your death is another indication that something other than a benefit to your iRA is going on. I don't care what all of the life insurance junkies may argue about the accepted use of life insurance to fund retirement benefits. I am referring to some pretty strong evidence of an improper benefit being served by use of IRA assets. The DOL believes that intangible benefits are considered. They tend to be more difficult to prove.

It is not necessary to have separate trusts under the master trust.

The C plan need not have provisins for matching contributions that will never be received as contributions. The documentation of the transfer of the matching contrbutions to the C plan, however that is done, should acknowledge that the matching contributions will be accounted for appropriately, which means separately if you want to be sure not to have unexpected trouble.

Does the employer consider her to have health insurance coverage?

See sections 72 and 414(h) of the Internal Revenue Code.

If the 403(b) plan is terminated, the participants cannot be required to roll over distributions to the 401(k) plan. A rollover is not a distribution option. A direct rollover is an option for what a participant can do with an eligible rollover distribution. If participants have only annuity payment options under the 403(b) plan, no direct rollover will be possible because annuity payments are not eligible rollover distributions. Offering a lump sum distribution option will provide a participant with the opportunity to elect a direct rollover to the 401(k) plan.

Of course. Haven't you heard of a Deer John letter?

Even if you believe in the theory of rolling cure, may a responsible fiduciary allow recurrent defaults without at some point requiring the loan be brought current (e.g. by payment or reamortization) as a condition of reinstatement?

A common condition of correction under EPCRS is that persons who are affected by the correction be notified. I don't see how a notice can be given effectively without some explantion. QNECs are part of other kinds of corrections and adjustments. I think a fiduciary has to explain account entries, especially extraordinary ones, when asked. A participant has a right to know if the particpant is getting proper contribution credit. I would not advise an ERISA fiduciary to refuse to explan an account entry.

Even though ERISA does not apply, I agree with your thought that the Code should not be be offended if government plans pay expenses from plan assets in a similar way as private sector plans. I don't think ERISA holds the Code in check despite some diffrences between the COde and ERISA in certain matters.

You have to consider state law and regulations, if any, because state law is not pre-emppted and a government retirement plan has to be authorized by state law in some way. Not a specific answer and the task will vary form state to state and plan to plan. Don't expect a direct answer to your question, even if you find all the relevant state law.

If the participant could have taken a distribution rather than a loan, it might save the day, but I would expect some awkwardness with plan terms that don't quite fit.

None, as long as the change complies with regulations under section 411(d)(6), including 1.411(d)(4). I assume that the employer does not want to have the plan serve as an estate planning vehicle and does not care that the plan might more efficient than an IRA for managing an individual's retirement investments. I would also apply lump sum distribution provisions to required distributions rather than allow distributions of only minimum amounts.

While it is true that a plan can allow distributions to alternate payees before a participant is entitled to a distribution, the inquirer's interpretation of 414(p)(4) is incorrect. The recent airline pilots scam divorce decision took the position that determination of qualification is a mechanical process. If an order satisfies qualification requirements, then it is qualified and its terms must be followed. As I posted before, I don't see how an order can be disqualified for providing that a non-spouse alternate payee is to be paid immediately if the plan has been designed to allow a spouse alternate payee to be paid immediately. What QDRO requirement does the order fail? If the plan does not provide for spouse alternate payees to be paid immediately, then such an order would fail under 414(p)(3)(A), and that would be consistent with 414(p)(4). Without more detail and explanation, I see the cost rationale as smoke. Even if the rationale were facutally true, I don't think it matters for qualification. It may be an expense allocation issue, but qualification is another matter. The pity here is that the economics of QDROs means that a proponent will be discouraged from fighting an incorrect plan position. The Department of Labor might get interested in the matter. 42 USC 666 evidences a strong federal policy for collection of child support and I suspect that most non-spouse QDROs relate to child support. I am not saying that 42 USC 666 (or the state statutes enacted under the mandate) is authority that a plan is compelled to pay before the participant is entittled to payment.