Larry Starr

Not at all concerned. While I may be a disqualified person, I am NOT a fiduciary. Also, I do not actually make the decision; I advise the plan administrator who makes the decision and controls the assets. In fact, if I am hired by the participant's (or ex's) counsel, it relieves the plan of paying me anything to review the QDRO on the plan's behalf because I do not charge the plan for QDRO review if it's my draft that is submitted. My counsel reviewed these issues many years ago (with particular attention to the unauthorized practice of law as well) and we are quite convinced that we are operating correctly.

I do, on behalf of the plan administrator. Of course, if it's my order (which it usually is), it's sort of a non-question!

Here is what we tell the employer: 'If any employee comes to you talking about a divorce and the retirement plan, tell the employee to tell their LAWYER to call ME. That way, we carve you out of being involved in your employees domestic problems and someone else will pay me to do what needs to be done so it won't cost you anything". Most employees do bring it up with the employer long before it gets to the QDRO stage. It's only rarely that a DRO shows up for us to review for one of our plans where we didn't know it was going on.

There is no such thing as an "owners 20% deductible limit". The deduction limit applies to the PLAN as a whole. That may be what is confusing the issue The allocation to the owner (and what shows on the 1040) is not limited to the 20% net (25% gross) that would apply to a one man plan (because the one man is the entire compensation so the limit applies to just the one participant).

You have gotten excellent advice; you need a good ERISA attorney to advise the plan. And possibly the best approach is to consider interpleader (where the whole mess is thrown to the court and the plan either pays the money to the court or waits for the court to decide what to do with the money). The plan really does not have a stake in the outcome; the plan knows it has to pay out the funds and is indifferent to who is entitled to it. The ONLY way to be sure of what you do is to have a court tell you what to do. But as noted above, get thee to an ERISA attorney!

First, PLEASE call me Larry. Second, I draft QDROs for participants in plan that we provide services for (I used to offer QDRO drafting for anyone who needed it, but I have restricted my practice for the last number of years to just my client plans). I actually am hired by one of the attorneys for either the participant of the soon to be ex and draft the order for the attorney to present to the court. I am not a lawyer, so while I can practice ERISA "law" as an Enrolled Agent, domestic law is another issue. Therefore, I provide the order to the attorney as their work product for them to take to the judge. Technically, my "client" is the lawyer for one of the parties. Is that what you are looking for?

Part 1: Yes. Part 2: Maybe. This is a complicated question not well handled here. The specifics of the loan will be critical to knowing if it is possible or if it is a prohibited transaction. It is easier to talk about a specific intended investment and why or why not that may be problematic. Then, there are investments that are allowed but still should not be done for many administrative and complexity reasons. We insist that a client call us ANYTIME they are even THINKING of doing some "different" than what we have already discussed they will be doing. And since we teach them that we have to be involved in setting up ANY investment account (or otherwise we can almost guarantee it will be done wrong), we (almost always) can nip these bad decisions in the bud.

FWIW, we eliminated reference to the specific YEAR in our SH notice way back when..... We use the same SH notice every year (specific to each client but no changes from year to year). Makes life much easier.

You raise an interesting issue; I always have to explain to the lawyers I am drafting QDROs for (for my client plans) WHY there is no allocation of gains through the date of distribution. That's because the plans are mostly trustee directed balance forward plans where the allocations of gains and losses occurs only on the last day of every plan year. So, if the award is for 1/2 of the account as of 3/18?18 (on a 12/31 year end plan), then it's half of the 12/31/17 account value UNTIL 12/31/18. If the distribution is made anytime prior to 12/31/18, there is no change in the value. If it holds over past 12/31/18, then it will get its share of the gains/losses for the 2018 calendar year. So as you can see, it is plan specific. So, even though the language may talk about allocating gains and losses, the actual gains and losses allocated may very well be zero since there is no allocation applicable until the plan year ends. We also just had a distribution to an ex that was exactly $1,000,000 (so long as made during 2018). And we all had to fight the ex-spouse's lawyer in Oregon who put a November, 2017 date in the divorce decree and expected gains and losses until the payout. I should point out that even the EX was fighting with her lawyer because she and her ex-husband agreed it would be exactly $1mill in this year and they were all very happy with that (the relationship between the two exes is actually pretty good; always nice when that happens). The lawyer ran up thousands of dollars in extra expenses fighting her own client, including hiring someone else to draft a QDRO (which was deficient) even though the parties actually wrote in the divorce decree that I was to do it (I didn't ask for that; it's just that I have worked with both of them for many years and they knew I would make happen what it was that they wanted to do). Now, we are thinking of bring a suit against the lawyer! Sheesh!!!!

Just not enough there to make any cogent suggestions or know what the issues are. Probably needs a phone conversation. If you would like to talk, feel free to call me at 413-736-2066 and I might be able to give you a more useful response.

No, I live in MA but I'm from NY and that's what explains it! Maybe you are too (I am NOT a Red Sox fan!). Lighten up! My response was simply factual; neither condescending nor snarky. Lots of people are reading these threads who are looking for guidance. You may have thought that your question was helpful, but (to me and some others) it clearly was not dealing with the question asked. I bet most folks reading this knew that IF there was rollover money, he could get at it. The participant wanted OUT of the whole thing. When someone has a question, it is best to try to find out exactly what the issue is and answer that question; not some other question. You didn't just ask if there was rollover money; you provided an answer to his question that required there to be rollover money. If you had just asked if there was rollover money and waited for the answer (which would have been no), then you would not have had an off target answer. And if the answer had been yes (as unlikely as it seemed) then you could have pointed out the options with regard to rollover money. We do have to be careful about telling people how to build the watch when they need to know what time it is. And yes, EVERYONE'S comments are EVERYONE'S business. Otherwise, why were my comments your business????? And I'm not afraid to attach my name to my comments.

100% agree.

Well, you need to be a little more specific. I am going to guess you are talking about an employee stock purchase plan (such as a 401(k) with company stock) and you are talking about the 11-K that is required to be prepared by the plan. Clearly, that is a requirement leveled on the PLAN and should be an allowable expense to be paid by the plan. This would NOT be SEC guidance, but would fall within the DOL purview. However, this is a complicated issue and there should be very competent lawyers involved who understand that SEC registration rules. There is a special rule that might apply: Employee stock purchase plans of publicly traded companies must make their own Securities and Exchange Commission filings. This is to ensure that investors, including company employees, have access to timely, accurate data regarding the issuing company's financials. Form 11-K is required to be filed even though the issuer of the securities also files its own annual reports under Section 13(a) or 15(d) of the Exchange Act. However, Rule 15d-21 under the Exchange Act provides that in certain cases the information required by Form 11-K may be disclosed for the plan as a part of the issuer’s own annual report. Reports on Form 11-K must be filed within 90 days after the end of the fiscal year of the plan, except that plans subject to ERISA have a filing deadline of 180 days after the plan’s fiscal year end.

NO; the distribution has been made in accordance with the valid court order. This bell cannot be unrung via the plan. If they have a problem and the funds were moved into an IRA, the court can issue a new order giving part of the IRA that the parties are considering "too much" back to the ex- spouse and that doesn't require a QDRO. The plan did what it should have and is done with this transaction.

Fairness is not part of ERISA.A whole bunch of Mass state cops are going to lose their pensions because they cheated the state by saying they worked shifts when they didn't. A bunch of them just gotten indicted and there are supposedly more coming. Because it is a governmental plan, they CAN lose their pensions. And that's because the good members of Congress exempted governmental plans from the same rules that we have to live with. Ain't nothin' fair 'bout it! If "pro" is the opposite "con", what is the opposite of progress?

My answer was as stated BECAUSE of the question that was asked. Now, YOU are asking DIFFERENT QUESTIONS that were not in the original asked by Kwalified. Nowhere in the original was there a issue of being NECESSARY. Nowhere did I say it was to track separate 5 year conversion clocks. Kwalified asked: However, are you aware of a situation where it is beneficial to open multiple ROTHs from one traditional? How about you simply want to have two different beneficiaries; maybe you want to invest them with different custodians. I'm sure I can come up with others if I was so inclined. When someone asks me what time it is, I don't usually explain how the watch works! :-)

I have that same chart rubber-banded to Natalie's hardcover edition of her text! I don't have any idea how I got it, but it is a very well done piece.

"All values under the plan will be paid to my beneficiary Y, excluding any life insurance contract in the plan which full value of same (not taking into account any plan borrowing against the cash value) shall be payable to the EX via cash or distribution of the contract". My spidey sense says it is probably totally screwed up because I wasn't ask to write the beneficiary provisions! :-)

Hmmmm.... here is the original posting: Situation is this.... An employee who is a participant in the plan (SH Match 401(k) ) simply doesn't want to play anymore. He wants to take his money and invest it somewhere else... away from the plan. There is not a distributable event... not 59-1/2... not disabled... nothing. The employee is out of luck... correct? Money has to stay put. Just pointing out that there is nothing in that question that remotely suggests rollover money is involved. MOST documents (mine too!) allow distribution of money that rolled in; your comment, while true, just didn't relate to the original posting. You were answering a question not asked, and thus my comment. Does that help?

Assumes facts not in evidence. Read the original question for the issue raised.

1. I've never seen such a designation; I doubt it exists. But even if it does... 2. Mary's entitled to the $90k; the PA, in getting her the $90k, does the stripping and pays out both pieces. No way she would not get the full $90k. FWIW.

Send me an email at larrystarr@qpc-inc.com with all the details and your contact information. We may be able to help you (we wouldn't do it, but one of my employees chairs the Relius Northeast Users Group and can almost definitely point you to a couple of possibilities). We won't be able to reply until Tuesday as we are out Monday on a company outing.

Ed, I don't think so. If the bene des does as you suggest, they strip out the cash and still distribute the full amount. They distribute the cash (can be rolled over) and the distribute the contract. If the bene want, she can pay back the loan to make the contract whole. Does that help?

Because it's very easy NOT to have to. Go back to my prior response; strip out the cash value via a max loan and then distribute the contract. Pay tax on only 10% of the value and the rest can end up in an IRA.

Yes.