Peter Gulia

Beyond the Government Publishing Office: If you want the older sources in convenient bound volumes with CCH's finding lists, indexing, keying to CCH Pension Plan Guide, and other editorial enhancements, CCH in 1989 published "Pre-1986 IRS Revenue Rulings" and "Pre-1986 IRS Tax Releases Other Than Revenue Rulings". There are second-hand dealers who sell these.

Consider this rule and the several statutes' sections and other rules this cites: https://www.ecfr.gov/cgi-bin/text-idx?SID=55842d869c1e469dad9d00e37cea9aff&mc=true&node=se29.9.2530_1200b_61&rgn=div8 Consider also whether imposing as allocation conditions not only 1,000 hours in the year but also a last-day condition might help accomplish some of what the sponsor seeks. But also test it for coverage and non-discrimination.

With a lawyer-client relationship and more facts, I might be inclined toward that view. But if I were to express it in a social-media forum, I'd have liability exposure and might breach a statement made to my malpractice insurer.

You might want your lawyer’s advice about: whether reporting the circumstances to your liability insurer is your obligation under your contract, or is only a condition for coverage; what after-the-fact notice or written explanation might make sense; whether to offer to adjust the affected participant’s account for some investment-direction opportunity she claims she missed because she lacked notice of the blackout; the exact meaning of Form 5500 Schedule I item 4n’s query and the instruction for it, and whether a proper response is Yes or No; if that response is No, whether a written explanation attached to the Form 5500 report might be helpful or harmful. How those and related points play might affect how likely it is or isn’t that the Secretary of Labor becomes aware of the failure, or assesses an ERISA § 502(c)(7) civil penalty. If you get Labor’s notice of intent to assess a penalty, observe that 29 C.F.R. § 2560.502c-7(d)-(e) allows not assessing the penalty if the Labor department is persuaded by your reasonable-cause explanation.

If a QDRO would pay the alternate payee 100% of the participant’s benefit, how close would that come to the value your client would negotiate for her marital property interests in her spouse’s pension right and the company’s right to a reversion from the pension plan’s surplus? Could your client be better served by negotiating for a payment from property other than the pension plan? Could doing so get a quicker payment? Might it get a no-worse or better tax treatment?

And consider that a governmental plan might have provisions stated through statutes, administrative-law rules and interpretations, court decisions, and other sources of State and local law.

About records retention, there is no one uniform answer that is right for every service provider. Here’s a list of some questions I ask when I design a TPA’s, recordkeeper’s, or similar service provider’s records-retention/destruction plan: How often does it happen that a client’s question, worry, or request, or the business’ response, is in e-mail and is not fully described in other writings? Does the business want to be ready to save a client from the client’s failure to keep a record it ought to have kept? Does the business or an affiliate sometimes offer services as a § 3(16) administrator? a plan’s trustee? an investment manager? Does the business or an affiliate sometimes offer banking services? insurance-agency services? securities broker-dealer services? commodities dealer services? investment-adviser services? Has the business made any agreement with another service provider or a financial-services business? Read each of those agreements to find records-retention obligations. Does any record about a client ever get used in evaluating an employee’s job performance? In how many States are the clients located? Considering the business’ usual forms of service agreements, do they always, often, seldom, or never specify which State’s law governs the agreement? Considering the business’ usual forms of service agreements, do they always, often, seldom, or never specify a time limit on claims against the service provider? How often does the business face subpoena and other document-production demands? Does the business charge a client expenses, fees, or both for a document production?

If one uses a warning that an e-mail or some other writing must not be relied on, at least remove from it anything that says or suggests that the Treasury department or the IRS requires the warning. The IRS now treats such a statement as false or misleading.

What is the administrator's work method for reading each Form 5500 report to decide that the report is complete, accurate, and correct?

QDROphile describes smart concerns, and a plan can’t completely solve them. But one partial effort to help negotiators spot issues is this: Among other conditions that are tighter than the QDRO regime, a plan-approved domestic-relations must expressly state: that the court made its order after all litigants informed the court they had considered all non-U.S. taxes, all Federal taxes (including income, FICA, FUTA, estate, gift, transfer, and excise taxes), and all State and local taxes; that nothing in the order can alter an employer’s or other payer’s duty to withhold taxes and to tax-report information as required by law.

Some speakers sound an optimistic note because the speaker or her client has a business interest in having an audience perceive some realistic chance for this legislation. But as little as one spoiler can kill a bill. Just to pick one example: Chairman Neal stripped out of the bill a provision that would make homeschooling expenses a § 529-qualified expense. House Democrats wanted to quiet objections from public-school teachers. A Senator who supports homeschooling might insist that a Senate bill include the dropped provision. Under the Senate’s rules and customs, even one objection could derail a bill from getting a vote. Or if a bill includes this or another Republican provision passes the Senate, it could force a reconciliation showdown that might make it too difficult for both bodies of Congress to pass the same bill. The Groom article seems right in suggesting the best hope for those who favor SECURE/RESA legislation is a tuck-in with whatever appropriations, budget, or debt-ceiling legislation Congress perceives as must-pass.

Let's thank Luke Bailey for an interesting idea. Would a plan amendment of the kind described be a satisfactory correction if the plan's administrator had applied the wait to other participants who, but for the wait, were entitled to a distribution?

I confess a lack of experience about life-insurance plans. Employers seem to fall in with an insurer’s contracts, without an employee-benefits lawyer’s advice. About deferred compensation plans, here’s some practical suggestions: If a plan is not governed by ERISA § 206 and does not provide for recognizing a State court’s domestic-relations order, consider the many ways in which an employer or administrator might incur expenses to resist efforts to get the plan or the obligor to recognize a non-participant’s right. Then, the plan’s sponsor might consider whether all or some of those expenses should be a subtraction from the participant’s account, right, or benefit. In my experience, few employers beyond governments and churches will commit even-handed and sustained attention to resisting domestic-relations orders. For select-group and other deferred compensation plans not governed by ERISA § 206, I’ve had successes with plan provisions that recognize only a plan-approved domestic-relations order (with a definition that avoids the QDRO label) under conditions that avoid some weaknesses of the QDRO regime and do more to protect the employer, “rabbi” trustee, and administrator.

Has anyone had an experience in which someone submitted a domestic-relations order to a life-insurance plan's administrator before the participant's death?

Are you asking about how a life insurance plan’s administrator should respond if an order someone asserts is a QDRO is submitted for the administrator’s disposition? Or are you asking about whether the described precedent is correct?

If you find that the payment refers to the plan but is not allocable to a particular individual, you might ask the responsible plan fiduciary for its instructions about how to allocate the amount in the plan's subaccounts. While I don't give anyone legal advice, at least one bit of nonrule administrative law suggests some ways a plan's fiduciary might evaluate an allocation. https://www.dol.gov/sites/default/files/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2006-01.pdf A service provider also might inform the decision-making fiduciary about the service provider's fee for processing the allocation because that information might affect the fiduciary's reasoning.

Has the plan asked the distributee to pay back the plan's money?

Before answering your question, if a difficulty is about explaining provisions that apply differently to different groups, consider making two (or more) summaries. Even for an ERISA-governed plan, the regulations expressly approve that method. Each summary would describe the provisions that apply to a particular class of participants. 29 C.F.R. § 2520.102-4 https://www.ecfr.gov/cgi-bin/text-idx?SID=3a755c0fd8410a941af9b029f61c0e60&mc=true&node=se29.9.2520_1102_64&rgn=div8 There are potential benefits of good communication beyond doing the decent thing of furnishing information a participant needs to protect her rights and interests. As you suggest, having furnished written information might set up a response to a “why didn’t anyone tell me” criticism. Similarly, it might shorten a statute of limitations or other time limit on a participant’s (or beneficiary’s) lawsuit or claim. Many court decisions treat a person furnished a disclosure document as having knowledge of the information one could learn by reading the document. Knowledge sometimes invokes a shorter time limit. For some kinds of claims, knowledge might defeat a claim entirely.

This afternoon, the House of Representatives passed (417-3) the SECURE Act bill.

spiritrider, thank you for your helpful description about one of the proposed changes in minimum-distribution provisions. But is the relevant age of "majority" 18, or might it be 21?

The preceding post describes that ERISA governs a plan that is "established or maintained" by an employer. But, even if so established or maintained, ERISA does not govern a governmental plan. Likewise, ERISA does not govern a church plan unless the plan affirmatively elects to be governed by ERISA. Consider also that a plan someone assumed was not governed by ERISA was governed by ERISA.

Without disagreeing with the other observations: If one is considering contributing property other than money, here’s a list of prohibited-transaction exemptions for an “in-kind” contribution to a pension plan. PTE 2017-02 Aon Pension Plan (LP interests) PTE 2016-08 Baxter International Inc. (stock) PTE 2015-21 Idaho Veneer Company/Ceda-Pine Veneer, Inc. Employees’ Retirement Plan (real property) PTE 2015-16 Red Wing Shoe Co Pension Plan for Hourly Employees, Red Wing Shoe Co Retirement Plan & S.B. Foot Tanning Company Employees’ Pension Plan (stock) PTE 2015-07 Rock Wool Manufacturing Company Salaried Retirement Plan (real property) PTE 2014-10 Family Dynamics, Inc., Pension Plan (notes) PTE 2014-06 AT&T Inc. (together with AT&T Inc.’s Affiliates, AT&T) (preferred membership interests) PTE 2014-02 ABB Inc. Cash Balance Pension Plan; Cash Balance Pension Plan for Certain Represented Employees of ABB Inc.; Pension Plan for Employees of the Process Analytics Division of ABB Inc. Represented by the Laborer’s International Union of North America, Local No. 1304; Pension Plan of Fischer & Porter Company; ABB Inc. Pension Plan (U.S. Treasury securities) PTE 2012-12 Weyerhaeuser Company and Federalway Asset Management LP (assets) PTE 2012-06 Retirement Program for Employees of EnPro Industries (GIC) PTE 2012-01 The Kemper Corporation Pension Plan (stock) PTE 2011-23 Bayer Corporation (U.S. Treasury securities) PTE 2011-13 Ford Motor Company (amendment to PTE 2010-08) (LLC interests, notes, warrants and stock) PTE 2010-12 Chrysler LLC (stock and note) PTE 2010-08 Ford Motor Co. (LLC interests, notes, warrants, and stock) PTE 2008-06 The Swedish Health Services Pension Plan (securities and mutual fund shares) PTE 2006-19 Kaiser Aluminum Corp. and its subsidiaries (stock) PTE 2006-03 The Zieger Health Care Corp. Retirement Fund (LLC interests) PTE 2005-05 RG Dailey Co. Inc. Defined Benefit Plan (stock) PTE 2005-04 Wheeling Pittsburgh Corp. (WPC) and Wheeling Pittsburgh Steel Corp. (stock) PTE 2005-02 Roy A Herberger Defined Benefit Pension Plan (stock) PTE 2004-08 Kinder Morgan Inc. (stock) PTE 2004-01 United States Steel and Carnegie Pension Fund (timber rights) PTE 2003-26 Northwest Airlines Pension Plan for Salaried Employees et al (stock) PTE 2002-24 Carl Mundy Jr Defined Benefit Plan (stock) PTE 2000-40 Washington County Hospital Association Employees Cash Balance Plan (securities) PTE 1998-51 US West Inc. et al (stock) PTE 1998-02 First Bank System Personal Retirement Account (interests) PTE 1996-77 Mewbourne Oil Co. Inc. Plan (securities) PTE 1996-21 WW Taylor Jr MD PC Money Purchase Pension Plan (securities) The hyperlinks lead, in series, to the Federal Register notices. Reading these can help a practitioner discern conditions the Labor department likely would require. If the business owner can sell his securities, why wouldn’t he?

Here’s a quotation from the statute: If some or all of the information necessary to enable the administrator to comply with the requirements of this title [I of ERISA] is maintained by an insurance carrier or other organization which provides some or all of the benefits under the plan, or holds assets of the plan in a separate account, . . . such carrier [or] organization . . . shall transmit and certify the accuracy of such information to the administrator within 120 days after the end of the plan year[.] ERISA § 103(a)(2)(A), 29 U.S.C. § 1023(a)(2)(A). https://www.govinfo.gov/content/pkg/USCODE-2017-title29/html/USCODE-2017-title29-chap18-subchapI-subtitleB-part1-sec1023.htm

loserson, thank you for your further observations. Those points (and more) were in my advice.

Thanks. The plan's sponsor is the trustee. They tried to get a bank or trust company to serve, but none wants this plan's business. (There might be other reasons for that.)