QDROphile

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?

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?