Peter Gulia

What about requesting the plan's whole actuarial valuation report, so you can read all the assumptions for yourself? (Or am I missing the humor in something you already understand?)

The Treasury department produced a nice bit of guidance. The idea of looking to a Form 5500 report to presume that a plan is intended to be tax-qualified is smart. What do BenefitsLink mavens think about these remaining questions: Is the Revenue Ruling's method inapplicable if the distribution to be rolled over was paid from a governmental plan or non-ERISA church plan that has not filed a Form 5500 report? If the would-be receiving plan's administrator asks the paying plan's administrator for a written statement that the paying plan is intended to be tax-qualified or eligible, and the paying plan's administrator refuses to sign anything at all, what should the participant do next?

Lame Duck, don't rely on the Labor department alone. Even if what you heard might be a correct interpretation of ERISA's Title I, the Labor department lacks authority on the issues of whether a trust is a U.S. or non-U.S. trust, and whether a non-U.S. trust might tax-disqualify its plan. Get your lawyer's advice. And ask your lawyer whether an Internal Revenue Service ruling or determination might help.

Jim Chad, A Shot in the Dark, and QDROphile, thank you for your observations. Does anyone have any experience, good or bad, with PENSCO Trust Company?

If the plan's fiduciary retrieves the prospectus from the investment fund's website, it might be truthful to say that the fund itself furnished the disclosure information. Following this, the Schedule C could report the name and address of the fund.

Leaving aside issues about the wisdom, legality, or tax effect of an IRA that is "self-directed" to invest in real property or other unusual investments, which trust companies would you suggest (or avoid mentioning) to someone who has decided on this form and kind of investment?

Is the 403(b) plan a grandfathered defined-benefit or money-purchase pension plan?

Buckoosier: No, this kind of internal-consistency check is not new. Even before electronic filing, it sometimes happened. In my older experience on this point (I haven't had a client stumble on it in recent years), the Labor department expects to see a change in at least one of the ending and opening values, or to see a financial-statements explanation.

Sometimes, the person that furnished the disclosures that allow an indirect compensation to be treated as eligible indirect compensation is not necessarily a recordkeeper or similar intermediary but might the fund's distributor or transfer agent, or even the fund itself.

If a plan's administrator were to decide that the "nothing" DRO is NOT a QDRO, what unwelcome consequence (if any) would follow from that decision?

To respond to Dennis Povloski's query about what (if anything) the employer must pay concerning interest payments, what do BenefitsLink mavens think? Must the fiduciary that breached (by failing to administer the plan according to its terms), restore the plan's losses that result from the breach? Or is it enough that the employer regularly pays in at least a minimum contribution based on what the actuary reports as necessary to fund the plan's benefits?

For just the reason that your last question suggests, a CCH set of "Pension and Employee Benefits" statutes and regulations is organized so that each Internal Revenue Code or ERISA section is followed by regulations that the agency has numbered as interpreting that section. For example, after ERISA section 3, there is reprinted rules or regulations that begin with 29 C.F.R. 2510.3-. Just because Congress suggested or even directed that an agency make a rule does not mean that there is such a rule. Sometimes, there is a wait. (For example, the first rule to interpret 1974's ERISA section 404© was published more than 18 years after the statute was enacted.) ERISA still hasn't turned 40. As far as I know, there is no regulation (at least not one adopted in compliance with the Administrative Procedure Act) that fulfills ERISA subsection 3(26)'s use of "in accordance with regulations of the Secretary". Is your purpose really about interpreting statutory language of ERISA's Title I. Or might it be about an accounting standard? The idea of reporting some "benefit-responsive" investments at "contract value" rather than "fair value" relates to some accounting concepts. Compare Financial Accounting Standards Board, Accounting Standards Compilation 962-325-35-5 with 962-10-05-5. At least for some purposes of reporting an asset on Form 5500 Schedule H, "current value" involves a hypothetical value because - for an asset that was not sold, redeemed, or otherwise disposed of - one considers its "fair value" as if there had been "an orderly liquidation at the time of [the] determination." To me, the differences between the values of a contract with or without assuming a use of, or the non-application of, a benefit-responsive provision are about differences between a participant's redemption of her individual interest, and a plan's termination of the contract. In putting a hypothetical value on an individual's account as of a date in the past for the limited purpose of a section 105 pension benefit statement, it might make some sense to refer to the value that she might have obtained had she done some legally significant act on that past date. But in putting a number on the plan's rights under a contract, one wonders whether it might make sense to consider what would have happened had the plan fiduciary acted on the relevant date.

How confident is the plan's administrator that a contribution really was "late"? Depending on the kind of business organization, the form and nature of each owner's shares or interests, and other facts and circumstances, an owner might not have a fixed wage-payment date from which the plan's administrator would segregate a participant contribution or compute a matching or non-elective allocation that turns on a measure of compensation. What (if anything) does the plan document say about when each kind of contribution is due to the plan?

Another reason for filing a report is that a bit of information disclosed by a Form 5500 report might result in treating a person as having that knowledge, which might start a statute-of-limitations period.

Just to repose my query: If an employer fails to report the value of a spouse's health coverage, do you think that a State will be aggressive or lax in its enforcement efforts? I believe that this question matters because, although there seems little doubt about what the conclusion will be when the final court decision is in, there is an until-then time in which an employer must make practical decisions concerning the expenses of reporting or the expenses of fighting a State's action.

To avoid the play-or-pay excise tax, a large employer need not offer health coverage for its employee's spouse. Internal Revenue Code 4980H(a)(1).

I regret missing your hypo.

I hope that BenefitsLinks smart practitioners will help me think through some practical questions. A few States have issued some guidance about tax-reporting for same-sex spouses. Nebraska http://www.revenue.nebraska.gov/question/same-sex_FAQ.html North Carolina http://www.dornc.com/faq/ssmarriage_faq.html Ohio http://www.tax.ohio.gov/Portals/0/communications/information_releases/DOMA_EWH_InforRelease11142013.pdf Wisconsin http://www.revenue.wi.gov/faqs/ise/samesex.html#samesex1 Some of these documents suggest that the amount an employer reports as its employees wages for State income tax purposes must add the amount that is the fair-market value of health coverage provided to the employees spouse if the spouse, even if recognized as a spouse for Federal taxes, is not recognized as a spouse under the States constitution or statute. If followed, this would result in different wage amounts for Federal and State (and locality) tax purposes. (As a Pennsylvania and Philadelphia resident, I know that there can be other kinds of differences between Federal, State, and locality wages.) And it asks an employer to estimate a fair-market value for something that has no market. What proxy or method should an employer use to estimate the value of the coverage attributable to the spouse? If an employer fails to do this reporting (and a States tax agency detects that the employer didnt do it), do you think that a State will be aggressive or lax in its enforcement efforts? Why? If an employer cant settle (with little or no money, and a sin no more pledge) a States enforcement effort, will a State really take this to litigation?

If a group health plan allows an employee to cover his or her spouse only if the spouse does not have an offer of coverage from another group health plan, what sources of information would such a plan's administrator use to determine whether a spouse has or lacks another offer of coverage? If the only source of information is the employee's written statement, how reasonable is it for the plan's administrator to assume that an employee who seeks coverage for his or her spouse tells the truth? If the information to be evaluated goes beyond accepting at face value the employee's (and spouse's) statements, what research and investigation methods would the plan's administrator use?

While I'm all for carefully monitoring and changing investment alternatives, I also can see reasons why a fiduciary might in the right circumstances slightly delay implementing an investment-menu change. And by delay, I mean a couple of months (or, for a small plan, a few months). Thinking through all the facts, circumstances, and interests is something for the plan's fiduciary to consider. Just to pick one example, I recently saw a situation in which sending an off-cycle notice would spend an incremental $33,000 of participants' retirement savings. Waiting a couple of months for the next quarterly account mailing spent a more modest $3,000. While recognizing that the replacement fund is better than the to-be-replaced fund, the fiduciaries estimated that the difference likely would not be $30,000 in investment improvement, not in a couple of months' time, recognizing that only a small portion of the plan's participants use the asset class involved and use it only for a small portion of the participant's account. Also, the fiduciaries were concerned about whether it would be fair for all participants to bear expenses that relate to an asset class used only by a distinct subset of participants. Conversely, if a fund has gone seriously wrong and the fiduciary decides that a change can't wait, those circumstances suggest that the fiduciary also can find that it's proper to spend the plan's money on a prompt communication. If a fund has gone bad, shouldn't we want to tell participants about it?

12AX7, thank you for sharing your experience. We see that you too have some quality-control methods for detecting some miscues. (I recognize that my SPD method tends to work with an employer that's big enough to have a human-resources person, and much harder to do if the would-be reviewer is the chief executive.) I have tried the method of out-loud checking each adoption-agreement selection, including line-by-line explanations of each choice. In your experience, how long does it take you to do such an exercise (while still feeling comfortable that the employer expresses the choices it really intends)?

If a plan's menu of diversified investment funds was prudently selected (and at least annually monitored), how does it happen that a fund becomes so inferior so quickly that, instead of waiting for the next cycle, the fiduciary must replace the fund immediately?

GBurns, thank you for this helpful information.

Situations of this kind suggest another reason for writing a summary plan description independently from those who compile the plan document. If an employer relies on a recordkeeper's or document provider's system to produce both the plan and the SPD, using the software will result in the SPD expressing the same mistake made in the plan document. If the employer (or a service provider separate from the one that produces the plan document) writes the summary plan description, doing so sets up an opportunity for the employer (or someone!) to read both documents to consider whether they are logically consistent.

Before thinking about how the universal-availability and coverage rules apply, how confident are you that the two charitable organizations really are under common control? Because charities don't have stock or ownership rights to look to in evaluating control, the section 1.414©-5 regulations look to whether 80% of the governing body of an organization are "representatives of" the other organization.