Everett Moreland

http://www.oalj.dol.gov/libdba.htm Kirk: The above site has links to some useful information. I don't know of a useful treatise or article, but I don't work with Davis-Bacon plans. Perhaps another board user knows of one.

http://www.dol.gov/esa/whd/FOH/FOH_Ch15.pdf See pages 37 & 38 of the above document.

If increasing the NRA would delay vesting, this would be subject to the rules on changes in the vesting schedule.

See RR 2002-32

Following are notes to myself from some years ago when I concluded that the surviving spouse can waive the QPSA, provided the plan document so allows: 1.401(a)-20 Q&A-33(b) suggests that a surviving spouse may not waive a QPSA: "A participant in a plan subject to the survivor annuity requirements of section 401(a)(11) generally may waive the QPSA benefit (with spousal consent) only on or after the first day of the plan year in which the participant attains age 35. However, a plan may provide for an earlier waiver (with spousal consent), provided that a written explanation of the QPSA is given to the participant and such waiver becomes invalid upon the beginning of the plan year in which the participant's 35th birthday occurs. If there is no new waiver after such date, the participant's spouse must receive the QPSA benefit upon the participant's death." (Emphasis added.) Notice 97-11, 1997-2 I.R.B. 49, 54 (dealing with QDROs), indicates that a surviving spouse may waive a QPSA: "If the spouse does not waive the QPSA, the plan may allow the spouse to receive the value of the QPSA in a form other than an annuity." IRS Handbook 7.7.1, Employee Plans Examination Guidelines, Chapter 9, Qualified Joint & Survivor Annuity Requirements, 9.4.6 (3/11/98): "Following the death of the participant the spouse can waive the QPSA and receive an immediate annuity." 1.401(a)-11©(5): "A plan will not fail to meet the requirements of section 401(a)(11) and this section merely because it provides that the spouse of a deceased participant may elect to have benefits paid in a form other than a survivor annuity." 1.401(a)-11(g)(2)(ii): "To the extent that the pre-REA 1984 law either is the same as or consistent with REA 1984 and the new regulations hereunder, the rules in this section shall continue to apply for years to which REA 1984 applies. (See, e.g., paragraph © (relating to how information is furnished participants and spouses) . . . .)"

If the DB plan is a governmental plan, see Byrne v. Commissioner, T.C. Memo. 2002-319 (2002).

Your questions show you have a good grasp of this area. As to where to go to get a comprehensive overview of the issues relating to this situation, probably the best source is an attorney who works in this area and who has the profit sharing and estate planning documents available to review. My guess is you will find you cannot use each child's life expectancy. The IRS regulations provide that separate shares established at the trust level are not sufficient to allow use of each child's life expectancy. They must be established at the plan and beneficiary designation level. So you probably are left with either your father-in-law's remaining life expectancy or the life expectancy of the oldest trust beneficiary. Whether you can use the life expectancy of the oldest trust beneficiary cannot be determined without reviewing the trust. Perhaps the first thing to check is whether the plan allows for a long-term distribribution to the trust. You might find that the plan allows only a lump sum or installments over a few years. Then the next question would be whether the plan can be amended to allow distribution over a long term (if it does not now). You need an employee benefits practitioner to answer that question. As to rolling over, not under current law. Legislative proposals have been introduced from time to time to allow rollovers by trusts if allowed by Treasury regulations, but so far none has come close to becoming law.

The following definition is from Revenue Procedure 2003-44 (EPCRS). I've not gone beyond finding this definition, but it suggests to me that this can be fixed in VCP: "The term 'Employer Eligibility Failure' means the adoption of a plan intended to satisfy the requirements of § 401(a) by an employer that fails to meet the employer eligibility requirements to establish a § 401(k) plan."

Last time I researched this, there were two court decisions holding that a power of attorney is effective for an ERISA plan only if the power of attorney specifically references the plan.

pax: From the context of the question my guess is the client is referring to a 451 plan for a federal credit union, but maybe there's something new out there.

A client has asked about a "461 plan" as an alternative to a 457 plan. Anyone heard of this? Know anything about it?

My vote is as follows: 1. The auto rollover rules apply to "a distribution . . . in excess of $1,000," so the statute does not require an auto rollover where the distribution is $990 (because the fee has reduced the account from $1,010 to $990). 2. But the answer may depend on how the plan document is drafted and interpreted. If drafted to require auto rollovers where the accrued benefit exceeds $1,000, and "accrued benefit" is interpreted to be before the fee, then you might conclude that the plan document requires an auto rollover.

SECTION 11. QDRO PROCEDURE 11.1. PLAN'S QDRO PROCEDURE. This Section 11. states the Plan's procedures for determining whether a domestic relations order (as defined in IRC Section 414(p)(1)(B)) is a QDRO and for administering benefit payments under QDROs. 11.2. REPRESENTATIVE. A Participant and a prospective Alternate Payee may designate a representative to receive copies of notices and Plan information that are sent to the Participant or the prospective Alternate Payee under this Section 11. 11.3. COPIES OF DOCUMENTS. Upon request the Plan Administrator will provide to Participants and prospective Alternate Payees copies of the Plan, the Summary Plan Description, and any model QDRO and any other information the Plan Administrator deems appropriate to the purposes of this Section 11. 11.4. ASSISTANCE. The Plan Administrator may assist a Participant and a prospective Alternate Payee in drafting a domestic relations order that is intended to be a QDRO assigning benefits under the Plan. 11.5. DECEASED PARTICIPANT. If the Participant is deceased, references in this Section 11. to the Participant refer also to the Participant's Beneficiary unless the context requires otherwise. 11.6. DETERMINATION. Upon receiving a domestic relations order, the Plan Administrator will promptly notify the Participant and each individual identified in the order as an alternate payee of the receipt of the order and provide them a copy of this Section 11. Within a reasonable period after receiving the order, the Plan Administrator will determine whether the order is a QDRO and notify the Participant and each such individual of such determination and of the Plan's procedures in 11.7. for reviewing the determination. If the order is determined not to be a QDRO, the notice of the Plan Administrator's determination will include a description of any additional material or information, or modifications to the order, need to be supplied or made for the order to be a QDRO or for the Plan Administrator to be able to determine that the order is a QDRO. To determine whether the order is a QDRO, the Plan Administrator may: a. Consult with legal counsel concerning whether the order is a QDRO; b. Ask the Participant and each such individual to provide such information as is reasonably within their control as the Plan Administrator believes may help the Plan Administrator to determine whether the order is a QDRO or may assist the Plan Administrator in administering benefit payments under the order; c. Ask the Participant and each such individual or their attorneys to stipulate in a manner acceptable to the Plan Administrator that the order is a QDRO; d. Ask the Participant and each such individual to have the order modified in such manner as the Plan Administrator believes may enable the Plan Administrator to determine that the order as modified is a QDRO or may assist the Plan Administrator in administering benefit payments under the order; and e. Take such other action as the Plan Administrator believes may help the Plan Administrator to determine whether the order is a QDRO or may assist the Plan Administrator in administering benefit payments under the order. 11.7. REVIEW OF DETERMINATION. The Participant and each individual identified in the order as an alternate payee may within 30 days after the Plan Administrator provides notice of the determination file with the Plan Administrator a written request for review of the determination unless such person is not adversely affected by the determination or such person or such person's attorney has stipulated that the order is a QDRO. After receiving a request for review, the Plan Administrator will promptly provide a copy of the request for review to each such person; accept from each such person any written response to the request for review; promptly provide a copy of each such written response to each such person; make a full and fair review of the determination, the request for review, and each such written response, including, in the Plan Administrator's sole discretion, at a hearing; decide whether to change the determination; and within 60 days (90 days if the Plan Administrator holds a hearing) notify the Participant and each such individual in writing of the Plan Administrator's decision on the request for review, which notice will (1) state the specific reasons for the Plan Administrator's decision on issues considered on review, (2) refer to any specific Plan provisions on which the decision is based, and (3) state that such persons may have a right to bring a civil action under ERISA Section 502(a) to contest the Plan Administrator's determination and the Plan Administrator's decision on the request for review. 11.8. ADMINISTRATION DURING DETERMINATION AND REVIEW. During the period in which the issue of whether a domestic relations order is a QDRO is being determined (by the Plan Administrator, by a court of competent jurisdiction, or otherwise), the Plan Administrator will separately account for the amounts that would have been payable to the Alternate Payee during such period if the order had been determined to be a QDRO. If within 18 months after the date the first payment would be required to be made under the order: a. The order (or a modification of the order) is determined to be a QDRO, the Plan Administrator will pay such amounts to the person or persons entitled thereto as provided in the Plan. b. It is determined that the order is not a QDRO or the issue as to whether the order is a QDRO is not resolved, the Plan Administrator will cease to separately account for such amounts and will direct the payment of benefits with respect to such amounts to the person or persons entitled thereto in the absence of the order. Any determination that the order is a QDRO that is made after the close of such 18-month period will apply prospectively only. SECTION 12. CLAIMS PROCEDURE * * * * 12.7. QDRO PROCEDURE. The Plan's QDRO procedure is in Section 11. This Section 12. does not apply to the Plan Administrator's determination of whether a domestic relations order is a QDRO, a request for review of such determination, or actions under 11.8. in separately accounting for the amounts described in 11.8. or in complying with the requirements in 11.8. regarding the person or persons to whom such amounts are to be paid. This Section 12. applies to all other matters with respect to a QDRO, such as a claim that benefits have not been paid to an Alternate Payee as provided in the Plan or that the Plan Administrator has treated more benefits as assigned to an Alternate Payee than is provided in a QDRO.

A standard list I often use is to give a designated officer the power to amend the plan to clarify the plan, to facilitate the administration of the plan, and to make changes adapting the plan to the requirements of law, changes in law, or the terms of a collective bargaining agreement, all as determined in the designated officer's discretion.

1.401(a)(9)-1 Q&A-3 describes what a plan document must state to satisfy 401(a)(9) (which is well short of the model amendment). If a plan is amended to comply with those requirements and the amendment is submitted for IRS approval within the remedial amendment period you will be safe. For qualified plans I don't use the model amendment. For a document I don't plan to submit to the IRS (such as a 403(b) custodial agreement) I might, out of perhaps too much caution, use the model amendment.

My perspective from working with individually designed plans is to do the amendments now. You might discover items that need to be resolved now rather than on 12/31/05.

Please describe the state constitutional provision you are concerned about.

GBurns: Thank you for the terrific links.

erisafried: Would you please post links to where you found the Field Operations Manual and the ALJ benchbook?

As a non-answer to your question, your client could call the state bar for help tracking down the former law firm's files.

I think it could have been more helpful. It doesn't answer whether the remedial amendment period applies to an amendment to lower the minimum amount for an annuity from more than $5,000 to more than $1,000. Maybe I'm supposed to know that the minimum amount for an annuity is integral to the change in the automatic rollover rules, but it's not clear to me that it is.

The plan must send the special tax notice, offer a direct rollover, give the participant at 30 days to consider whether to elect a direct rollover, and comply with the automatic rollover rules (if applicable) and all the other rules associated with eligible rollover distributions.

See the discussion about this in Q&A 9 at the following cite: http://www.mcguirewoods.com/news-resources...m.asp?item=1358

mbozek: I agree with you. We have not found an acceptable IRA provider, and are concerned that the NESTEG provision for automatic rollovers to be transferred to the PBGC will prevent acceptable IRA providers from surfacing.

Harry O: Thank you.