GMK

Does this $2500 have to be taken care of (presumably, allocated as a match per the Plan Document) by the end of 2011? For example, post #12 here: http://benefitslink.com/boards/index.php?showtopic=45287 and this earlier discussion: http://benefitslink.com/boards/index.php?showtopic=34327 Or am I mixing the apples with the oranges?

Understood, but I am unable to reconcile that with: "the mere existence of the forfeiture balance would entitle such employee to a matching contribution for the year" in post #2, which sounds like the administrator has no discretionary choice and must allocate the forfeiture balance as a match. Otherwise, does the administrator "save up" the annual forfeitures until some year when they decide to allocate a match? In any case, as a participant, if a match is declared and I'm entitled to an allocation, it doesn't matter to me whether you use forfeiture or contribution money for my allocation. If the amendment does not reduce the allocation amount to which I was entitled prior to the amendment, have my rights been cut back? I don't mean to be argumentative. Just trying to understand. Thanks for your comments.

Maybe I'm missing something here, but if participants have a match coming to them, does it matter if the match is made with forfeiture money or an employer contribution? In other words, amending the plan to give the administrator the option to use forfeitures for plan expenses doesn't take away participants' rights to a match if the employer decides to allocate a match. It just means the employer has to fund the match if the forfeitures were used for plan expenses.

Tax withholding is voluntary on a rollover to a Roth IRA. My recommendation is to rollover the entire distribution to maximize the amount going into the Roth. Any withholding (from the rollover) will reduce the participant's Roth balance but not her/his taxes. To avoid being under-withheld, the participant should instead consider increasing payroll withholding or estimated tax payments, if possible.

Thanks for your thoughts. Makes a lot of sense. The "Don't Panic" message always applies, of course. What about having that towel handy?

Interesting stuff at Treasury Direct. Actually, my question about fiduciary responsibility is a serious one, looking for opinions.

So, do plan sponsors/administrators have a fiduciary responsibility to share this warning with participants and let them know that the sky may fall on their money market accounts? Should we wait until Monday ... you know, in case a just-in-time agreement is reached?

I agree with ERISAtoolkit. If the nondiscrimination tests show that highly compensated employees (HCE's) and Key employees are getting too much benefit compared to non-HCE's and non-Keys, then the plan has to make corrections, for example, sometimes by making additional contributions to non-HCE's. It depends on the details of who's getting what. And a useful reference if you're not familiar with all the terms like HCE, Key, nondiscrimination, etc. is: http://www.retirementdictionary.com/

Didn't we have a day that was 22/7 last year, too? Something about pizza as I recall.

I recall reading somewhere that the ultimate answer is 42. Mighta been a different question, though. ETK - Good point, althought the phrase "budgetary surpluses" might mislead some, since the federal debt has continued upward every year since 1957. But they get good spin when they ignore off-budget spending. http://www.treasurydirect.gov/govt/reports...bt/histdebt.htm

Somebody pays the tax on the interest payments. If you pay the interest to the bank, then the bank pays the tax on it. If you pay the interest to your account, then you pay the tax on it when you take the distribution. yes/no?

K2 - I agree with you for family members in the in loco parentis situation, which probably adds in aunts, uncles, etc. In the (desperate) case where there really are no funds except one generous grandchild's hardship withdrawal, I'd say, "Why not?" (assuming the plan document allows it, of course). I don't know how you filter out those who would game the system (and they will show up), but in the legitimate cases it seems quite appropriate.

This SPD lists funeral expenses for a grandparent under hardships (page 10, which is page 12 of the pdf): https://www.employeebenefitswebsite.com/amg.../retire-spd.pdf but I don't know if grandparents are "family members" for the hardship safe harbor. ETK makes a good point. If they are dependents, they are safe harbor. Safe harbor isn't required, but it is, well, safer. And check the plan document.

Looks like you only need one more. ... but maybe one with 3 different answers. Is that possible?

Thanks. That's what I thought it all meant.

I'm a little confused by who's who. In this sentence, "spouse" is the ex-spouse and not the IRA holder, right? And since the transfer is not a distribution to the IRA holder, the IRA holder still has an RMD/MRD due for 2011, based on the 12/31/2010 balance, yes? or am I more confused that I thought?

Ah, yes. Good point. Thanks.

Agreed, but I believe that the 10% penalty does not apply to payments paid to an alternate payee under a qualified domestic relations order (QDRO).

If there was any doubt, be assured that GMK is not ERISA. After further review, item 4 in our procedures, defining "in pay status," pretty much says that item 2 applies at times when the participant couldn't receive a distribution anyway (so it's pretty easy to maintain the status of the benefit). We have made distributions to participants while we knew that a DRO was being developed. Generally, the DRO was going to take 50% as of a given date, and the distribution was much less than 50% (not that that would have mattered). As I understand it, if the plan doesn't receive the DRO soon enough to prevent distribution of plan benefits to the participant, the ex has to go back to court to get the 50% or whatever percentage from the participant another way.

Yes, we do. Because of the possible confusion about what the phrase could mean, we specify how the Plan interprets it in our QDRO procedures, for the people working on the QDRO, for the next person who sits in my chair, and most importantly, for me.

uberzete - Here's what our procedure does: If, prior to receiving a DRO, the Plan Administrator receives written notice that a DRO is in the works: 1. Notify the participant and each potential alternate payee specified in the notice of receipt of the notice. We also send a copy of the QDRO procedure, so they know what we will and will not do. 2. If the benefit is NOT in pay status, take such actions as necessary to maintain the benefit, including possibly suspending distributions. 3. If the benefit is in pay status, take no actions to maintain the benefit, until the Plan receives a DRO. 4. Define "in pay status" 5. Address what happens to distributed dividends, if any. 6. Set a 90-day limit. If the Plan does not receive a DRO within 90 days after receiving the notice, revoke all actions. If a second notice of a pending DRO arrives, the Plan Administrator may repeat item 2, above, if the benefit is not in pay status at that time. Others may do things differently, but this gives you an example. Keep in mind that the benefit belongs to the Participant. Until there's a QDRO, the benefit cannot be assigned or alienated, voluntarily or involuntarily. Of course, you take into account what a divorce decree says (to the extent they'll tell you), and plan accordingly to the extent you can.

I think there can't be a hold if the account is in pay status, not until the DRO arrives.

After the plan receives a DRO (in writing, signed by the judge, and like that), the plan has 18 months to determine if the DRO is qualified (but it shouldn't take that long). For reference, the divorce decree may be DRO, although it is usually missing some of the information required to make it Qualified. If the plan receives WRITTEN notice that a DRO is coming at a time when the participant's benefit is not in pay status, the Plan Administrator can take actions to prevent distributions to the participant that would leave too little for the eventual alternate payee. Actions may include suspending distributions. If the account is in pay status, however, then the participant cannot be denied distributions until the Plan Administrator receives a DRO. The plan should have a written QDRO procedure. Previous discussions that might be of interest: http://benefitslink.com/boards/index.php?showtopic=48999 http://benefitslink.com/boards/index.php?showtopic=48385 Good luck.

Just curious... What happened to the 'you are no longer welcome on these boards' post? I kinda understand the search tools, but I can't find that post anymore.

It still looks like free advertising to me. But if it's OK with the paying advertisers, I guess a special section works. What if he "accidentally" or otherwise posts in the wrong section?