Peter Gulia

Some executives or other select-group employees desire a 457(f) plan because one desires even more deferral after exhausting the limits of a 403(b) or 401(k) plan and a 457(b) plan. Some employers like a 457(f) plan because it requires an employment-related condition that is a substantial risk of forfeiture. An employer might see this as improving its ability to keep a desired executive. Both employers and employees use both kinds of deferred compensation as a way not to increase the salary reported on Form 990, hoping that some readers won't put together the pieces to estimate what the real total compensation is.

If one follows Senator Rubio's idea, is there an advantage to an employer? An employer's role would be limited to sending the contributions; an employer would be excused from responsibility for selecting investment alternatives, selecting service providers, and otherwise administering the plan. Would anything about Senator Rubio's idea be a disadvantage for an employer?

What do you think about Senator Rubio's idea of allowing non-governmental employees to contribute to (and invest under) the Federal Thrift Savings Plan?

Thank you, all, for the further perspectives. If an account statement is mailed in a sealed envelope addressed only to the participant, does that resolve a privacy concern about whatever is printed on the statement?

Thanks for the help. One more: If a distributing plan's administrator does not furnish a determination letter and refuses to sign anything at all, how does an IRA custodian satisfy itself that the rollover comes from an eligible retirement plan?

GMK, thank you for your helpful ideas. The situation I'm thinking about is one for which the plan's administrator has contracted with its recordkeeper for the recordkeeper to receive, process, and keep all beneficiary designations. The employer/administrator does not have any beneficiary-designation records beyond those kept at the recordkeeper. The recordkeeper also will print the beneficiary information on participants' quarterly account statements without an incremental fee. Do these facts change your thinking about whether it's a good or bad idea to display the beneficiary information on the statements?

If ERISA governs the plan, a fiduciary might get its lawyer's advice about the extent to which ERISA preempts State law. However, State law, even if not governing, might nonetheless be relevant if the plan refers to State law, or refers to a concept that is not found in Federal law. Likewise, a fiduciary might get its lawyer's advice about the extent to which it is at least permitted, and perhaps required, to follow the plan's documents. And if a plan's administrator has discretion in deciding whether to recognize a beneficiary's conservator, UTMA custodian, or other fiduciary, the administrator might consider its duty to exercise that discretion for the exclusive purpose of providing the plan's benefit to the beneficiary while incurring only reasonable expenses of plan administration.

What do think about the idea of displaying on every quarter's account statement the name that is in plan's records as the participant's most recently named beneficiary? Do you like this? Why or why not?

What do BenefitsLink mavens think about my remaining question: If the paying plan never filed a Form 5500 report, 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?

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).