GMK

If the plan does not already provide for diversification distributions, it must be amended before such distributions can be made. I cannot say whether your plan is eligible to offer diversification distributions. Your best bet is to contact a lawyer who understands these matters very well and have her/him write the amendment. Generally, the purpose of diversifying is to reduce the risk associated with having a large fraction of one's retirement assets invested in one security, but diversification could also be used to increase risk if that is the goal. The amendment will have to give all participants the opportunity to diversify, not just the large account holders.

This sounds like diversification distributions, which may not be available in your plan. The Summary Plan Description will explain diversification distributions if they are available, and you can contact your plan administrator if you need additional information. You will find that plans offer diversification distributions if the assets of the plan include the stock of the employer who sponsors the plan. Plan participants have the opportunity (under conditions defined in the plan) to take a distribution of some of the value of the company stock in their accounts, so they can invest it more diversely. If the distribution is a direct rollover to an IRA or other qualified plan, then no tax is due on the distribution at that time, and the early withdrawal penalty does not apply (as you describe).

If this is a 401(k) (or similar), the participant might qualify for a qualified reservist distribution.

Interesting question. I think the participant would have to actually be terminated. I doubt (don't know for certain) that a person on any leave can be "considered" terminated for Plan purposes, unless, as Belgarath suggests, you have explicit approval of such language. USERRA guarantees reemployment, reinstatement of insurance coverage, pension plan benefits, etc. to Qualified Reemployed Employees. If a participant returns to work as a qualified reemployed employee, she/he can (must) be reinstated as prescribed by USERRA whether they were on leave or terminated. If the participant is requesting a distribution, a hardship distribution, if available, might be easier.

You may also need to consider: who contributes the property interest to the ESOP? how is the property interest allocated to participants' accounts? who controls the use of the property interest while the ESOP owns it? what happens to income generated by the property interest and who pays its expenses (if any in both cases)? is the ESOP prepared to accept the property interest as an asset for a longer period of time in the (apparently unlikely) event that the person changes his/her mind about accepting it as a distribution? what if another participant requests a distribution in the property interest (or a part of it) before the original distributee asks for it? None of these issues may be relevant to your particular case, but it is hard to tell how many worms are in this can before it is opened. Your benefits lawyer may have some valuable insights.

There is some discussion of this under Retirement Plans > Qualified Domestic Relations Orders (QDROs), for example, the topic "QDRO - market loss" I would insert the link, but it looks like I need advice on how to insert a topic link (yes, I read the Help). Thanks.

QDROphile has it. When a temp works for the employer, the agreement is between the employer and the agency (the "leasing organization"), not between the employer and the temp.

But I didn't call the drug store, ask them what their terms and pay rates were on gum, and then tell them OK, I'd like that gum. I just walked in and took it (...I didn't really, just an example). I'm suggesting that an agreement exists when I ask for a temp under the temp agency's terms and at the agency's rates, and they say OK and send one over.

Just curious ... do any states limit the choice of dates that can be specified in a DRO as the date the assets get divided?

Does "agreement" mean "contract" in legal terms? Suppose the temp agency sued the Company, because the Company did not pay for a temp's services. Is the Company remotely likely to win in court by using the argument that it didn't have to pay the temp agency because there was no written agreement? I doubt it, but I'm not a lawyer.

I love these Boards. One place the experts are too serious. Another place they're having too much fun. FWIW, I'll keep reading Bird and QDROphile. But meanwhile, we are now reviewing beneficiary elections to be certain we know what participants want if they specified per stirpes. It's all useful. No fooling.

A very interesting thread. Thanks. We suggest that people list names and percentages whenever possible, because distributions will be delayed if we have to figure out who's left to split the benefit. (Is it true you can get stirpes by sharing dirty ladles? Maybe only oral stirpes.)

Just to be clear I still recommend that you proof read every letter, e-mail, brochure, etc. you send to clients. It's an image thing and a confidence builder (or breaker) for those who evaluate your proposals. Someone might wonder, for example, if you ignore typos, how attentive are you to other details?

I think you can see you have an uphill climb to sell this plan. But if you come in with details and answers to issues like those in masteff's post, you might have a chance. I'd recommend that you look for a replacement for the phrase "at no cost to the company." I have yet to see a plan or offer that comes at no cost, even if you do not count my time to hear about it. And be prepared to answer a question about how the plan protects the company if a disgruntled participant names the company as a co-defendant in a law suit, because the "company sponsored" plan goofed up.

Shoe size might imply gender discrimination. How about the sum of the digits in her/his phone number? Whatever criterion you use, it might be better if it is something you can use again in future years, to be consistent.

Nothing comes at no cost to the company. and hire a proof reader. There. (...their?...) Hope this helps.

Do those temporary regs still apply?

leevena is right. Check the plan document. COBRA coverage begins on the date that coverage would otherwise have been lost by reason of a qualifying event. Your plan specifies when coverage ends, which may not be the same day as the termination of employment. My little DOL booklet on COBRA says "COBRA establishes REQUIRED (my emphasis) periods of coverage for continuation health benefits. A plan, however, may provide longer periods of coverage beyond those required by COBRA. ..." See also page 12 of http://www.dol.gov/ebsa/pdf/cobraemployee.pdf

I trust that JanetM is correct, but it would be helpful to know why. Is it that one of the "benefit rights" awarded to the Alternate Payee is the right to the losses after 12/28/07? or is there a cite that applies when gains/losses are not mentioned in the DRO? Thanks.

Yes, I should have mentioned combined income - mea maxima culpa. John G - Your comments about 2010 are spot on. As it stands now, income limits on conversions to Roth IRA's will also disappear, and for a conversion in 2010, one has the choice to pay the taxes in 2010 or average them over 2011 and 2012. Of course, as things stand, ordinary tax rates go back up in 2011, so that might not be a bargain. We inform people about 2010, but advise them that when we get to 2010, it may not look the same as it does now.

Perhaps the intended word was "claudicant," which means limping. Go Badgers.

FWIW, I don't see rate change for COBRA continuation coverage on the list of qualifying events for COBRA. BUT if the question is whether she can come back into your plan (assuming she is still working for you), then that depends on your plan's enrollment eligibility requirements, not COBRA rules.

This could be Fidelity's response to the fraudulent DRO recently discussed here under QDRO from Hades ... not that that changes the Plan Administrator's need to follow the Plan's QDRO Procedure.

Some options to consider: Have your wife open a Roth now in her name and fill it up while she has earned income. Contributions to her Roth do not need to be from "her money." You do not have to withdraw the funds from your Roth to change where the funds are invested. If you have Vanguard change the investment from VFINX to something else they have that you like better, it is still your same Roth account. If what you want to invest in is at another company, contact that company to set up a direct transfer from Vanguard to a Roth in the new company. Changing your investment choices within a Roth and direct transfers from a Roth to a Roth are not taxable events (and no penalty on withdrawing earnings if under age 59-1/2). Earnings in a Roth grow tax free, which is even better than tax deferred.

Generally speaking and with all the conditions that otherwise apply to COBRA eligibility qualifications, a child born to or placed for adoption with Mom and Pop while Pop is on COBRA continuation coverage is considered to be a qualified beneficiary. That child's COBRA coverage begins when the child is enrolled and generally the maximum coverage period for the child is Pop's maximum coverage period. That is, the child's coverage lasts as long as Pop's family continuation coverage lasts for other family members. The other factors for qualified beneficiaries also apply to the child. For example, the child may qualify for extended coverage for a disability if the Social Security Administration determines the child to be disabled within 60 days after the birth or placement for adoption.