david rigby

I doubt that. Don't forget that "reasonable" has a "market" component to it. Sure, it sounds like a lot, but it may be comparable to others. What would the plan's legal counsel charge? BTW, is the $700 an average cost, covering both DB and DC plans? Since the average DC DRO is simpler than the average DB DRO, using an average cost will effectively mean the DC plan is subsidizing the DB plan.

Hey, wait a minute. BTW, my posting a smiley face here is proof that I have a sense of humor.

Financial institution requiring .....? Who makes the rules? What does the plan say?

Duplicate post. See other post for discussion:

IMHO, report that person as "retiree receiving benefits".

Yes, yes, yes. Think of it this way: there is no excess until all the benefit liabilities have been satisfied.

It's common for plan amendments to have prospective-only effect (in some cases, mandatory). Well-written plan amendments will address this issue up front, to remove ambiguity.

Exactly! While you are getting legal advice, be sure to include advice from an actuary experienced with small plans.

Clarification for the original poster, of advice above: When Kevin C states "they are supposed to explain why", he means you are making a formal claim for benefits. Every plan is required to have claim procedures, so you should state you are making a claim, ask for a copy of the claim procedures, and expect the response to include a clear explanation. When My 2 Cents states "not your problem", he means that if the plan has mistakenly paid the benefit to someone else, that does not invalidate your claim. If your claim is the correct one, then the plan will still have to pay you.

Follow the money. In this case, that might be "watch out for who gets what fee".

I'm not sure you should describe $60K/year as "low-income".

The terms "entire balance" and "lump sum" are often used to mean the same thing. Is that in conformance with your plan provisions? The instructions for Form 1099R make generous use of the term "lump-sum", but you may wish to review for yourself.

In my observation, there is a difference between "compensation" (ie, paid to an employee) and "fee" (paid to a non-employee, including a consultant). If it's a bona fide consulting relationship, what fee that person receives should not be relevant to a qualified plan. Or do I misunderstand the question?

My understanding is that any "housing allowance" must be reasonable for the purpose designated. For example, it would (probably) not be reasonable to replace a $30,000 salary plus $10,000 housing allowance with a $40,000 housing allowance. When you suggest that 403b distribution as a housing allowance, isn't that changing something defined as "deferred compensation" into "non-taxable compensation"?

Yes, it's an operational error, but there is also a practical aspect: maybe those participants weren't paid out because they never provided the ER with an updated address. A review of this may suggest that the ER modify an HR policy (ie, outside the plan itself) to emphasize to departing employees the importance of a mailing address.

It's common to see the various limitations get mixed up. If you can identify who told you about this 25% limit, ask for a cite. That is, the reference might not be correct for a DB plan, but it may have relevance on a related item.

Has someone reviewed a draft of the DRO? If not, and the draft requires modification, it may difficult to determine how much additional time is needed.

Thanks for sharing and contributing. Enjoy.

I think there is oversimplification in this analysis. It seems to assume that prices would be unchanged. You argue for the elimination of corporate income tax, but there might be equally valid arguments for the opposite: eliminate all tax on labor.

I've discussed this issue with a sponsoring church (also non-electing), although not yet implemented. We concluded "the document rules": Use the A.E. definition(s) in the plan; J&S election required only if the plan includes that language. (If spousal signoff is not required, but you want to include it anyway, get legal counsel signoff on that procedure, since you might be faced with a situation that contradicts the plan document if spouse says NO.) I doubt you need to include the immediate annuity option; it may seem harmless to include it anyway, as a comparison tool for the participant. However, it may backfire, especially if the EE is close to retirement age. Cautions: (1) watch out for generic language that might incorporate 417 by reference. (2) anticipate the possibility of someone electing the annuity, especially if the person is close to early or normal eligibility.

The Employer may have a different problem: an employee who has lied.

Data as of January 31, 2017 (Tuesday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 3.99 3.99 Aa 3.99 4.08 4.04 A 4.19 4.21 4.20 Baa 4.61 4.74 4.68 Avg 4.26 4.26 4.26 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.69 Medium-Term (5-10 yrs) 2.23 Long-Term (10+ yrs) 2.88

I agree with a desire for procedure(s), as long as that is general principles, not detailed instructions. However, I do not suggest putting anything in the plan (or SPD). BTW, I searched the Gray Book and found no reference.

Well..... that is a way to do it, not the preferred actuarially correct method. But you are in the ball-park. IMHO, the 7.5% rate is not reasonable, but it might be acceptable to the negotiation, and is certainly favorable to the husband. BTW, several of the actuaries who contribute to these message boards can provide a detailed service.

I've seen a POA a few times. In every case, the PA got its own confirmation/legal opinion that a POA was valid or not. (This may have included other practicalities, such as other known evidence about a participant's disability, etc.) In all cases, the PA was clear that lack of authenticity of the POA would mean "don't do anything", except that the plan's appeal process may be triggered by the submission of a (proposed) POA. If the POA was determined to be valid, the same legal advisor would describe whether the POA has limitation(s) within the plan context. (IMHO, this last part is essential, and is evidence that the legal advisor reviewing the POA should be an ERISA attorney.) As the actuary, I give my opinion only when requested by the PA, but always defer to opinion of the legal advisor.