QDROphile

I don't see your problem, other than it will be a more complex document than may be usual for you. One way to organize the doucment is to have each subsidiary adopt the plan. Each subsidiary's adoption document would set out the eligibility and benefits terms applicable to the employees of the subsidiary in lieu of the general terms of the plan. The plan document would have terms providing for adoption by subsidiaries and the ability to modify by adopting special terms in the adoption document. You might not consider that to be one plan document, but "plan document" is not a precise image. Different eligibility and benefits can be accommodated under Form 5500, but attention should be given to the applicable discrimination rules.

A reading of plan terms that cover the circumstances. If there is a surviving spouse, the plan will provide for payment to the surviving spouse.

A lawyers's answer: Not at all. But that answer comes from a premise that a TPA should not be answering any legal or interpretive questions and that premise is never respected. Next question: What services did you contract for and what expectations did you create on the part of the plan administrator?

I think it would be very enlightening to learn why your friend is upset about the timing of receipt of distribution information. It would also be enlightening to learn what your friend learned from the distribution information that the friend should not have already known. So far it has all been about grasping at tidbits out of context. What is the story?

The auditor is technically correct, but I am not sure about the specific statement you attribute to the auditor. The "six consecutive months" does not assure compliance with eligibility rules. You might be able work with the concept and pass 410(b) with more complex provisions, but the IRS might still be concerned about 410(a). Section 410(a) has been more of a hot button lately. I suspect the auditor is only on to 410(b) at this point.

One thing you have to keep in mind is that the plan does not have to offer everything that the law allows. Discussions of what is allowable must defer to the the plan, the offical interpretation of the plan, and applicable plan policies. You might start with reading the plan. You could look at section 457(b) of the Internal Revenue Code and related regulations. I think that you will find that a home purchase is not an appropriate event for access to funds while you remain employed. That is not the rule for 401(k) plans, so do not be confused by what you may learn about 401(k) plans.

"The plan sponsor is looking to us for advise...." On what basis are you going to advise if this is where you start?

The mechanics can be a lot more complex. The plan does not have to extend to the limit of wha the law allows.

With the Department of Labor, I have been successful with arguing that the valuation does not matter unless it is used for something that has consequences, primarily distribution because that determines tax liability. Other uses might be determining contribution or funding requirements or limits, the maximum loan available under a plan, the amount of fidelity bond, or taxes on prohibited transactions.

What would "non-amender" mean to you or the plan?

The sponsor or fiduciary should get advice about how to address the situation.

I thought you cannot cross-test ESOPs.

Look for plan terms that treat authorized leave of absence as in service.

A deferral arrangement is going to be subject to the FICA rules, so that should take care of the matter.

I would try to to convince somebody that a match is the wrong approach to enhancing the benefit.

EBIA publishes materials (Cafeteria Plans manual) that provide rather detailed guidance. Some testing is subject to uncertainty, so don't expect a simple step-by-step, fill in th blanks template. Your prior consultant amy have boiled everything down to a mechanical procedures after having made some choices. The difficulty will be with the health FSA. The dependent care FSA is more straightforward.

I agree with the responses, but this is a personal tax matter and it would be best for the plan and the em[ployer not to get involved.

If you crave certainty, amend to vest.

You zeroed in very nicely. The 401(k) plan must accommodate the protected distribution provisions of the amounts transferred into the 401(k) plan. The MPP's annuity form is protected, but I think only for amounts greater than $5000 (subject to plan terms, as always). The amounts are transferred, not rolled over, from the terminating MPP. Some plans anticipate transfers and have ready-made provisions about protecting distribution options. If your 401(k) plan does not accept transfers, it will have to be amended to accommodate the terminating plan. Amounts not greater than $1000 (or $5000, depending on terms) can be distributed from the 401(k) plan pursuant to 401(k) plan terms. I did not review the FAB to see if it prevents the indirect distribution of the small accounts after the transfer, but I do not recall that it does and it would be overreaching to interfere with 401(k) plan mandatory distributions.

FAB 2004-02 does not inform about what is allowed or required under section IRC 411 with respect to distributions. I don't think you are getting the nuances of the requirements, or perhaps you just dislike the outcome so much that you are asking for confirmation of answers given. Either way, you should seriously consider engaging professional assistance rather than trying to reach conclusions from discussions on this board. Perhaps others will try to walk you throught the maze.

How do you move the balances to IRAs? You can only do that with a distribution. If the balances are not more than $5000, then look into provisions for mandatory distribution of small balances. Finding an IRA provider won't be easy even if you resolve the distribution issues. I am not sure that I understand or agree with you comment about purchasing annuities. You don't have to cross that road until the time comes for distribution and the individual does not choose another option. Individuals do not choose annuities, especially for small balances. Somewhere there is an insurance company that will sell an individual annuity of any size, for a price.

Regulation 1.411(a)-11(e). It is a transfer, not a rollover. Distribution options are preserved.

The contribution is a non-elective employer contribution to the plan. The deferral limits do not apply, so there is no need for an increase in the limit or an exception. It is unfortunate that anyone is using terms to the effect that the employer is "paying the teacher" $32,000. That is causing the confusion and they get to get off of that bus. If they are required to start with "paying the teacher," the analysis gets much more complicated. In any event. it sounds like the plan needs amendment to allow the contribution. It would be nice if the school is a public school, too, to avoid thinking about other issues.

Personally, I would not bother to track down anything related to the plan if the plan no longer holds any funds accrued for your spouse, except to find out how much was accrued and distributed. You are interested in the amount so you can take it into account when you divide property in the divorce. However, you are motivated and relatively well informed. You can amuse yourself as you wish.

Most 401(k) plans do not require spouse consent for distribution. Plans that provide an annuity as the normal form distribution option will require spouse consent to a distribution that is not in the form of a joint and survivior annuity. A plan can be designed to require spouse consent, but most plans do not add provision that increase administrative burdens beyond what the law requires. Rollover is something that can be done with a distribution. There are no spouse consent requirements specifically associated with an election to roll over a distribution. If you are getting divorced, the property division can include an award to you of some or all of your spouse's IRA whether or not you are a designated beneficiary.