Peter Gulia

Even if one accepts the premise of SunGard's article, one might quibble with its observation that "[m]any practitioners assume the risk in making these amendments[.]" Relatively few plans are stated on documents for which a firm of lawyers, accountants, or actuaries is responsible. Instead, when a plan's sponsor wants to amend its plan, it puts its service request to the recordkeeper or financial-services business that maintains the pre-approved documents. And that business usually warns that it does not render tax or legal advice. So it's really the plan's sponsor (and the plan's participants) that takes the risk that amending a plan might also mean unraveling a safe-harbor treatment, which could lead to tax-disqualifying the plan.

The corrections programs start from a presumption that the failure results from an innocent lapse or error, not an intentional act.

If an employer paid a contribution by a mistake of fact, returning the mistaken amount (adjusted for loss, but not for gain) to the employer (within one year after the payment) is not prohibited by ERISA's anti-inurement provision. The plan's administrator should check that the return would be consistent with the plan's documents. In addition to paying the right wages that was due each affected employee, the employer should pay each something for the time value of money.

Or too bad that the Internal Revenue Service did not design its internal administration of restatement cycles for pre-approved documents to follow an information cycle that has been in the statute since 1974.

Imagine a situation in which there have been a half-dozen SMMs since the last integrated SPD. How many tack-on SMMs should we require a participant to read to figure out which portion of the base SPD no longer describe the plan's provisions? The rule requires a "freshener" SPD after a decade of no change. If there are changes, could five years be a reasonable interval for integrating the SMM changes into the base SPD?

Are the plan's trustee and administrator satisfied that the amounts were paid under a good-faith mistake of fact?

I couldn't paste-in a text.

What does the plan document say about a participant's account - accrual method or cash method? If the plan does not specify, what has been the plan administrator's regular practice?

If the annuity contracts really are individual annuity contracts, how would such a contract's holder - each individual participant - assign to himself or herself a set of contract rights that the individual already holds?

masteff, thank you for your excellent pointers! In 2009, the IRS stated its intent to allow individual determinations on 403(b) plans. In 2013, the IRS declared it "not feasible". Further, the IRS stated: "[A] sponsor of a [section] 403(b) plan will be able to obtain reliance as to the acceptability of the form of its plan only if the plan is a pre-approved plan[.]" That decision leaves some charities with a frustrating choice: to get a fully careful and readable document, the employer cannot get IRS reliance. (My observation about pre-approved documents is not a criticism of the professionals who write them. As someone who has been the author of such documents, I understand that the business goals for these documents require design choices and writing compromises that weaken a document's uses.)

The Internal Revenue Service does not have a determinations program (except for its recent prototype program) for 403(b) plans. In the 1980s and 1990s, some charitable organizations obtained letter rulings that were, in practical effect, similar to a determination on the form of the employer's plan document. Is that still possible? For an employer that does not want to use a prototype document, can one request a letter ruling that contributions made under the plan stated by the document submitted would get the Federal income tax treatment of IRC section 403(b)?

GBurns, thank you for the further explanation.

Your query turns, in part, on whether the decision-maker considers a holder of the CFP certification mark to be a "professional individual" within the meaning of ERISA 4021©(2)(B). Given that text, a range of statutory-interpretation arguments might be possible. Consider suggesting that your client get its lawyer's advice about whether it makes sense to seek a PBGC opinion letter, or to rely on a lawyer's written opinion.

Does a State's insurance law try to regulate anything beyond the group health insurance contract and its insurer? If so, does ERISA preempt a State law that would regulate a non-insured health-reimbursement plan?

mastiff, thank you! This is exactly the cookbook I need.

Ivena, thank you for your help. Does the rule precluding a dollar limit on a group health plan's coverage apply to the health-reimbursement plan?

A few years ago, some small-business employers - in an effort to make health coverage less expensive - used a design of increased deductibles and other cost-sharing provisions of a group health insurance contract, coupled with a self-funded health-reimbursement plan that covered the difference in the deductibles and cost-sharing. Those who advocated this design asserted that the employer's expense under the health-reimbursement plan would be less than the incremental premium attributable to having foregone the lower deductibles and cost-sharing. After the Affordable Care Act and other law changes, is such a design still permitted? If not, which statute or rule precludes it? Does the analysis vary with the size of the employer (for example, more or less than 50 employees)? If such a design can continue, is a plan-document revision needed to sustain the design's compliance with relevant law?

Under 29 C.F.R. 2520.102-4, a plan's administrator may meet a requirement to furnish a summary plan description by furnishing a different SPD for each class of participants. An SPD may omit information that is not applicable to the class of participants to which that SPD is furnished.

Rball4, do your rules of professional conduct include as an exception from a duty to report another's bad conduct that you need not (or must not) report if you learned about the other actuary's conduct in the course of your actuary-client relationship with your client (and your client has not consented to the reporting)?

Even apart from shareholder circumstances, it's possible for an employee to have zero wages for a period if she performed no work during the period. This sometimes happens when an employee is available to work, but the employer had no work it wanted the employee to do.

SAS3, is there a financial consequence that might make it undesirable to the Buyer organization to decline to assume, or allow Buyer's plan to accept a merger from, the Seller organization's plan? Unless there is a significant difference between immediate vesting or recognizing forfeitures under Seller's plan, what financial consequence might that be? Is Buyer's acquisition a stock purchase, or an assets purchase?

KSCG, thank you for sharing this case with us. Conspicuous by their omission from the list of litigants are the two children. (Both became adults before their mother pursued their interests, and were adults even before their father's death.) Do they agree with their mother's efforts to pursue their interests? Will the participant's widow/executrix appeal this decision to Virginia's Supreme Court?

masteff (I undid the automated spelling-changing this time) mentions a helpful point. If ERISA does not govern the plan we're thinking about, it also does not preempt State law. That leaves open that a court's order has whatever effect it has under relevant law, including the law of whether a person that might be called to do something in response to the order is or isn't subject to the court's jurisdiction. Internal Revenue Code 414(p) governs only a Federal tax treatment that follows from whether an order is or isn't a QDRO. This includes whether a payment from a 403(b) contract is or isn't excused from a 403(b)(7) or 403(b)(11) condition against a too-early distribution. A State's court cannot meaningfully decide whether an order is or isn't a QDRO; only the United States courts could render a decision that binds the Internal Revenue Service.

mastiff, thank you for the pointer to these EBSA Q&As. But I'm asking about situations in which ERISA does not govern the plan, or at least the employer does not concede that it established or maintains a plan within the meaning of ERISA. If the employer says "not me", does the insurer or custodian take over and decide the QDRO matters? Or is there a stand-off that leads to a battle? And how does the battle play out?

Regarding an ERISA-governed retirement plan, a person who wants to be recognized as an alternate payee submits a domestic-relations court's order to the plan's administrator. If such a person submits the order to the plan's recordkeeper, a typical recordkeeper will send the order to the plan's administrator, or do something to make clear that the recordkeeper is not the decision-maker. What about a 403(b) plan for which the employer seeks (whether to avoid establishing or maintaining a plan within ERISA's meaning, or for other reasons) to not involve the employer in benefit claims decisions (except to furnish factual information that is specially known by the employer)? In those circumstances, will a 403(b) insurer or custodian make QDRO decisions? What restrictions or provisions (if any) does an insurer or custodian request? Does willingness to handle QDRO matters vary between insurers and custodians? Is there a difference between group and individual annuity contracts? Is there a difference between group and individual custodial-account contracts? If both the employer and the insurer or custodian refuse to decide whether an order is a QDRO, what happens?