rcline46

You have to remove it from the 98 distributions since there is no tie in to termination date. Make sure your distributions in Relius Top Heavy specs. are for the first year in which no service is performed regardless of when actually distributed

ERISA 206(d)(3)©(ii) relates that a QDRO must specify the percent or how to calculate the percent due to alternate payee. If the calculation METHOD is not faulty but the lack of information prevents the use of the method, does the DRO fail to be a QDRO? In cases similar, we have responded (before accepting as QDRO) with the information we have and asked for guidance on how to comply should we accept. Usually this all comes out when the court is gathering evidence about the values in the plan, well before the DRO is prepared. I still believe the DRO does not fail if the methodolgy is precise. That does not mean it can be implemented. As to arbitrarily stating some cut off point, I think the plan sponsor has enormous responsibility for the dearth of information and should be either acquiring it or getting some indemnity insurance. THey are required to have the records necessary to detemine a participant's benefits.

That is what I am saying - it meets the legal requirements of a QDRO but the information available prevents the calculation of the requested distribution amount.

I think you are confusing the qualification of a DRO as a QDRO (names, plan names, plan benefits, etc) with the calculation of QDRO amounts. What you are proposing has nothing to do with determining if a DRO is QDRO. The other part is benefit calculation. If it will be difficult, then you must disclose that to the parties and have them reach a reasonable conclusion on how to proceed. I believe the calculation part can be charged to the participant / alternate payee, but not the determination part.

There have been interesting discussions regarding this point. IMNSHO, any pay received on or after the entry date is eligible for deferral. Why? The Cash or Deferred election must be made before income is received (constructive receipt). Nothing in the law or regs say it must be made before the income is earned. The employee does not have constructive receipt until they receive their check.

There is nothing that requires a trustee to inform the participants or plan sponsor of investment decisions. Under their trust agreement they have discretion to the limits of the 'prudent man' rules. However, if you are the plan sponsor and gave instructions to put the funds in a money market, they trustee does have an obligation to do as requested or to tell you why they will not do so.

That is the wonderful thing about any SEP plan, it is an IRA, and can be transferred to another IRA at will, and withdrawn at will (subject to penalty taxes). Special penalties apply for SIMPLE IRA plans.

Two times, year deposited and year distributed. And I think it is rollable, although no original deduction so it will be doubly taxed, which is a real bummer on top of excise taxes. Once distributed, not in trust, so no excise tax.

We need regs, and they aren't out yet, so we are guessing! I would say NO because match is based on deferrals. In most cases match cuts out before ees get to 11000 anyway.

The only reason for an ongoing company to terminate a profit sharing plan is to put money in the pockets of its employees. There is no other reason. Especially if they are installing a 401(k) plan. BTW there is no such thing as a 401(k) plan! Its just a handy shorthand. Code Section 401(k) allows a Cash or Deferred Arrangement (CODA) to be attached to a Profit Sharing Plan, so a 401(k) plan is merely a Profit Sharing Plan allowing pre-tax deferrals.

You cannot apply hindsight to trustee decisions. Because it frequently takes 6 months or more for the IRS to rule on a plan termination, it would not be considered prudent to leave the money in a money market. Consider if the market had gone up and it was left in the money market - would you be upset?

We are not waiting. We are filing the Volume Submitter plans now, with the $125 fee.

NO NO NO- All participants must be treated equally. THis has been discussed in other threads here. Also check the DOL opinion letters relating to fees. Very interesting.

The document will state both the lookback period and the stability period. If lookback is 0 or 1 mo. and stability is plan year, then the rate for Feb 2001 is what would be used, or actuarial equivalent if higher. Also must know what happens with any grandfathered benefit on the switchover - may be any of three methods for disposing of old accrued benefit.

Investments are DOL requirements, to be found under the DOL regs for ERISA 404.

You should be more specific in naming groups in the future. She is a shareholder and therefore is in group A. Create 3 groups - and specifically name the daughter in one group.

In these situations, we tell the participants that if they cannot locate the trustee, then call the DOL. We do not feel it is a problem since the company is effectively gone.

Send registered letter stating that if match is not in by xx days after receipt of letter you will contact the DoL / PWBA.

No exceptions. If any thought of ever revoking waiver, then name out of plan specifically (as long as all other tests are passed).

If the plans merged 12/31/99, then a final 5500 was filed for 12/31/99. The fact that the registration on the assets was not completed until later is irrelevant. Nothing for 2000. Unless you are saying the plans were merged retroactively, but that would be illegal, and you couldn't be saying that.

Distribution in error, participant must return amount. Make sure 1099 gets corrected. Or trustee must put in funds (mutual fund on hook - they could if participant won't return them).

If you are talking about Vanguard's 401k plan investing in Vanguard's funds only as proprietary funds, I still think prudent procedures are required. If you are talking about Merrill Lynch's 401k plan investing in the Merrill Lynch funds, which are not publicly offered, it is really serious. In the first case, anyone can choose the Vanguard suite (and they do). In the second case only M/L clients can choose the funds (which is what I would call proprietary funds) and outsiders cannot invest in them. Also, independent performance comparisons are very difficult.

Ok, I will hit the highligts: 1. A fiduciary shall discharge his duties.. with the care, skill, prudence, and diligence..that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Would a prudent investment person pick the proprietary funds? 2. "and investment will not be prudent if it would be expected to provide a plan with a lower rate of return than available alternative investments with commensurate degrees of risk, or is riskier than alternative available investments with commersurate rates of return". Most prop funds perform worse than equivalent open funds. 3. Check preambles to the 1987 proposed 404c regs and 1992 final regs. 4. consider - is the exclusive use of prop funds 'in the best interest of the plan participants and beneficiaries' or in the best interest of the purveyor of the funds? 5. Get the outline "401(k) Fiduciary Responsibilities" by C. Frederick Reish presented at th 2000 ASPA conference. Proprietary funds may be perfectly acceptable when compared to other funds. However, I would be very suspect.

First is elig rules. 6 mos. is working in 6 mos. Not all plans require them to be consecutive, just withing a plan year - check doc. You might interpret it to mean 6 mos EVER. Then comes entry date which you were not clear on - date of event, monthly, quarterly, dual, annual? If not employed on entry date, cannot enter. Plan might say immediate entry on rehire if ever satisfied elig. Lots of stuff to check in the document.

All laws should be interpreted by an attorney. It wouldn't hurt the administrator to look at them, but that is why the distribution should be given to the court.