Peter Gulia

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?

If a plan has a provision that allows a distribution form other than a single sum only if the participant is required to take a minimum distribution while she is still a deemed employee, should be concerned that such a provision arguably discriminates in favor of highly-compensated employees?

mal, if the advice your client asked for was to explain what disadvantages might result from the absence of a current determination letter and you have explained the disadvantages, have you fulfilled what your client asked?

Does the employer desire to exclude all non-shareholder physicians, or only those of them who work less than 40 hours a week? Are all of the full-time non-shareholder physicians highly-compensated employees? Are some of the part-time non-shareholder physicians non-highly-compensated employees?

In addition to others' observations, a mention of "required" could refer to something other than public law. Just to pick two quick examples: An employer might have an obligation under a collective-bargaining agreement. A plan or its trust might have an obligation under a participation agreement with an investment issuer or manager. Or there could be a requirement or condition under non-tax law, including State or local law concerning the acts of the governmental person that establishes or maintains a plan.

masteff, thank you for the nice help. Concerning non-Medicare patients, one suspects that many of us will learn much more about how physicians arrange themselves from 100% third-person payment to 100% patient payment, and the complexity of configurations between those absolutes.

GBurns and Ivena, thank you for your good help. Today, I learned some new facts. It seems that the receptionist might have been blaming all the ills of the world on the Affordable Care Act; rather, the described belief is that New Jersey insurance law restrains the patient's proposed arrangement. To me, it seems odd that an insurance contract regarding which the physician is NOT a recognized provider could restrain the conduct of the physician merely because the patient could choose to get his insurer to pay for the service if the patient were to choose a different physician. Even if everything described is dead wrong, isn't this more complexity than our society should ask a patient to face?

SheilaD, beyond the text you noticed, New York's courts in 2008 adopted the New York Rules of Professional Conduct, and made those rules effective April 1, 2009. In doing so, the courts obsoleted the former Code of Professional Responsibility (the source of the "EC" [ethical consideration] and "DR" [disciplinary rule] passages you pasted). The current rules make even more clear that a law firm's qualified retirement plan may include nonlawyer employees. A comment to the rule suggests that profit-sharing may be based on the profit of the firm as a whole, or even of a department of the firm, but should not be based on the fee of a particular case. If you (tactfully) invite your prospective client to reevaluate this point, the relevant text is under Rule 5.4 [pages 140-141]. That said, there might be other reasons why the person you describe might prefer to maintain two, four, or some other number of retirement plans.

A friend visiting his physician was told (by the receptionist) that the physician does not participate in the insurance plan that covers the patient. The patient is ready to pay the physician's full fees (and to do so without seeking a reimbursement from the insurer), but the receptionist said that the Affordable Care Act prohibits the physician from accepting any cash payment from someone who is insured. Is that right? If there is a restriction, does it apply differently between those who are Medicare-covered and those who are younger?