J Simmons

BeBunk, Please re-read QDROphile's post. While he gives citation to court decisions that would favor yours and your current wife's rights trumping those of the former wife, QDROphile pointed out that the Carmona decision (9/17/2008) opens the door for a bit more intensive analysis by the court as to whom ought to prevail.

Everyone eligible gets an SPD, within 90 days of becoming eligible. Page 17 of the 2007 Form 5500 Instructions includes the following provisions:

Under your plan, what will happen to those 100% invested in Brokerage link but do not want to voluntarily move 10% of their invested benefits?

And at that, benefits from 401k contributions may not be distributed to an employee that is in-service and under age 59 1/2. IRC § 401(k)(2)(b); Treas Reg § 1.401(k)-1(d)

A qualified retirement plan (i.e. 401a) to qualified retirement plan transfer as decided by the employer and plan officials, not the employee, is permitted. Certain profit sharing plans are designed to permit in-service distributions of profit sharing contributions made by the employer after the dollars in questions have been in the plan for as little as two years. If so, the individual employee would have the option to take a distribution and have it rolled over into another qualified retirement plan, a traditional IRA or Roth IRA (if the employee is eligible that year for Roth conversion). A QRP may limit distributions for the time specified after separation from service; typically this is not after the plan's normal retirement age. However, as to benefits accrued under a QRP that did not have the delay in the plan documents at the time of accrual cannot later impose such a limitation later on those accrued benefits.

Those who are both owners and employees of an S corporation can receive payments from the S corp either as wages (reported in Forms W-2) and as dividends. That which is received as dividends is passive, not earned income and thus not compensation for qualified retirement plan purposes.

What david rigby is so gently getting at is the old refrain on these Message Boards: check your plan document--here to make sure that the new group is in fact part of the plan, such as by the definition of employer as encompassing any other members of a control group to which the older, big group is a member. If the new group is not, then the reallocation would be appropriately limited to plan-eligible employees of the old, big group. However, if that is the case, the new, small group's employees would yet be considered in the testing pool because of the control group rules.

See DoL Reg http://' target="_blank">§ 2510.3-1(b); Fort Halifax v. Coyne, 482 U.S. 1 (1987). You may not even have an employee welfare benefit plan if the sick and STD practice is a payroll one that does not require 'administration'. It would take a facts and circumstances analysis of your 'plan'.

An order is a domestic relation order (DRO) if it relates to providing alimony or marital property rights to a former spouse (414p1Bi) and is made pursuant to a state domestic relations law (such as community property laws) (414p1Bii). If the order that is issued by the divorce judge and the presented to the plan administrator meets that first set of criteria, then the plan administrator must undertake a process to determine if if meets a second set of criteria. The second set is to determine if the DRO qualifies to be recognized and honored by the retirement plan. (E.g., is the DRO qualified to be exempt from the general rule of anti-alienation?) Only if the DRO meets the second set of criteria and is thus qualified is the plan administrator allowed to recognize the order and honor it by taking some of your benefits and giving them instead to your ex-spouse. In the divorce court proceedings where the question of modification now sits, you need to present your fairness arguments (i.e., equities arguments), including how the failure of your ex-spouse to take steps to perfect the old DRO as a QDRO led you and your current spouse to plan your retirement, depending on resources that it now turns out you would not have if your ex-spouse is successful. Maybe, for example, you retired earlier than you would have had you known that you and your current wife would not have all the pension you've been receiving the past 17 months. Point that out to the court, and how your old job is not open to you to return to and how this will work a hardship now at this late date. If the divorce judge issues a modified order, it will likely be presented to the plan administrator by your ex-spouse. The plan administrator's role is not to second guess the equities/fairness that the divorce court sorted out. The plan administrator's role is simply to make sure the order does/does not have certain 'bells and whistles' that make it a QDRO. The plan administrator's job is not to second guess the divorce judge as to whether the order is fair or makes an equitable split of your benefits between you and your ex-spouse. It is at this stage that your new spouse's claims become more acute. She can make a claim with the plan administrator that she is and should remain the 'surviving spouse' of all your benefits because she qualified as the surviving spouse of all those benefits on your annuity starting date.

VG is boglehead-speak for Vanguard, and the actual identity of DEF Co.

Don't sign anything without first being advised by a qualified ERISA--better yet, qualified QDRO--attorney. A "QJSA..."? QJSA is an acronym for 'qualified joint and survivor annuity'. If it is something they want you to sign that lists your ex-spouse as your 'surviving spouse', it may be something very detrimental to the position that you or you and your new spouse might want to take. A federal matter? It is. More precisely, there are federal rules about when a qualified retirement plan must/must not recognize and honor a state divorce court order attempting to award part of your benefits under the qualified retirement plan to your ex-spouse. 414(p)(6)(A)(ii) requires that the plan within a reasonable time determine that an order presented to it is/is not a QDRO. Nothing from your facts belies that has happened. It sounds like the earlier order was rejected as not a QDRO. If the plan receives another order--the result of the modification that your ex-spouse is seeking from the divorce court--the plan must also within a reasonable time determine if it is/is not a QDRO. The equities--like laches--must be fought out between you and the ex-spouse in the state divorce court. If the your current wife is going to lodge a claim/objection to any recalculation of benefits, that should be with the plan administrator.

I think that your laches argument would have to be made in the state divorce court action where your ex-spouse's attorney is trying to modify the DRO to that it can be determined to be a QDRO. In March 2007, the U.S. Dept of Labor issued regulations (29 CFR §2530.206) that specify that amended QDROs and QDROs issued even after the death of the participant are to be recognized by plan administrators as to yet unpaid benefits if the orders otherwise meet the requirements of IRC 414p and ERISA 206d3. If you are now in pay-status of a joint and survivor annuity form of benefit based on your marriage to your current spouse, the plan could stop that benefit and recalculate the remaining value based on what a modified DRO might leave for you and your current spouse after the awarded benefit for your ex-spouse. Your current spouse could possibly throw a monkey wrench into whatever your ex-spouse might succeed in getting by way of modified DRO from the divorce court (to which your current spouse is not a party and thus should not have res judicata effect). Your current spouse could post an objection to any re-calculation by the plan at this time, claiming that her interest became fixed when the joint and survivor annuity form of benefit began based on hers as the second life. That would put the plan administrator between a rock and a hard place, and may resort to federal interpleader for direction.

From my bag of cliches, I'd oversimplify Peter's approach to consulting a client as "We report, you decide."

The trustees should, under these circumstances as always, act prudently in the best and sole interests of the plan participants and beneficiaries, keeping in mind the liquidity needs of the plan to pay benefits. The finger pointing will likely increase, so the need to investigate thoroughly and document the fiduciaries' findings and decisions is more critical than ever. I've found that the non-published opinion of March 21, 2006 in the case, In re RCN Litigation, U.S. District Court, New Jersey, Master File No. 04-5068, to be useful in providing discussion of specific steps taken in satisfying fiduciary duties with respect to investment issues.

You can impose minimum age (up to age 21 years) and minimum service (up to 2 years,a but if you impose more than 1 year, then you cannot impose any vesting requirements on what part of employer contributions that a terminated employee is allowed to take with them). Excluding based on job category or those hired as of a certain date is trickier. There are limitations. One is minimum coverage rules. Counting those employees for testing, basically the percent of the non-highly compensated employees that do benefit must be at least 70% of the percent of highly compensated employees that benefit. (There is a much, much more complicated alternative.) Excluding employees by job category might make you fail minimum coverage. Also, for excluding all employees hired on a certain date, you might want to check Treas Reg 1.401(a)(4)-5 and take whatever steps seem prudent not to cross the line there in general nondiscrimination. If the job categories you exclude or those that are excluded by reason of being hired on a certain date have a significantly higher concentration of females, racial minorities, those of a certain religion or creed, disabled individuals than your employee pool at large, you might face Title VII or similar discrimination.

Most IT systems give an 'instant' confirmation to the employee so that the employee can verify and make changes during the open enrollment period. When I was in-house, the post-enrollment period confirmation was a few weeks before the new plan year begins, one last look. Not to allow employees to change their minds, but to provoke those whose confirmations did not jive with what they actually attempted to elect during open enrollment to come into the Benefits Office and have a Benefits Rep begin investigating the situation to see if there was situation as described in post #2 in this thread that could be sorted out before the elections went live on the first day of the new plan year.

Is the enrollment window specified in the plan documents? If so, there's a fiduciary duty to follow the written documents.

I think you would need clear evidence that the employee attempted to enroll the dependent in question during the enrollment window and reasonably thought all steps to enroll the employee were in fact taken. If it is an online enrollment process (which I suspect given the confirmations), then I think you'd want to see what traces, if any, there are in the online system that might show or point to the attempt by the employee to have enrolled the dependent. You could compare this against answers the employee gives in an interview about what steps were taken by the employee.

Take a look at this thread, 403b Document what you are asking is discussed there, as well as whether a plan document may be avoided all together.

I like the analogy. I think when it comes to consulting in such context, the old addage, 'pigs get fat, hogs get slaughtered' captures it too. A consultant should help fatten his clients, but not get them slaughtered. Skinny or dead pigs aren't well served clients.

I think both of George's comments above are sage. The very fact that orm did not 'notice' the e-mail notices until too late begs for the consent from the EE in the first place. Many people yet do not treat e-mail with the same importance and urgency as they do hardcopy mail.

I agree, Bird, that failure to follow the new 404©(4)© mapping procedures does not necessarily equate to fiduciary liability. But the fiduciaries' failure to follow 404©(4)© opens the door of possible liability. 404©(4)© provides a safe harbor from liability for those fiduciaries that follow it. Barring the application of the 404©(4)© safe harbor, plan fiduciaries that move an EE's plan benefits from arguably the most conservative investment option made at that EE's directive, into investments with 85% stocks without the benefit of a new, affirmative directive from the EE would seem to have some answering to do to that EE--maybe liability to restore the benefits to what they would have been had the investments remained in money market funds.

Look at ERISA § 404©(4)©--if the switch of the investment of your plan benefits from your directed money market fund investment to the one with 85% stocks is not a 'qualified change in investment options', then the plan fiduciaries are possibly liable to you, they would have no 404© protection. DoL Regs §2520.104b-1©(2)(ii).

I'm not sure that it should have been defaulted into the QDIA (qualified default investment alternative). You had an affirmative direction of investment into a money market fund. They should have tried to map you to the closest thing to what your affirmative investment directive was. That is, if the new provider has a money market fund option, that's where your investments should have been mapped. QDIAs are only for EEs that have not directed the investment of their benefits. Also, I'm not so sure that the e-mails fulfilled the notice requirement on the plan administrator. Had you ever given the plan administrator permission to provide you notices via e-mail?

Here's what I think. It's COBRA continuation of the group health plan coverage. The ER can charge 102% of the cost to the COBRA continuant making the election. The COBRA continuant would have to pay with after-tax dollars from whatever sources are available to that person, having no mechanism available to do so on a pre-tax or tax-free basis. You'd set up a separate FSA with the amount elected for the remainder of the year, crediting the entire amount up front and collecting the cost from the COBRA continuant monthly over the balance of the year. The EE's FSA remains the EE's, untouched.