Larry Starr

A judge's order is valid unless the judge vacates it or another court of competent jurisdiction vacates it. Either way, a QDRO (no such thing as a Federal QDRO) is a judge's order and has to follow these rules. Larry/.

Austin, While the owners might be paying union dues and getting benefits, they are NOT union employee (as determined for plan purposes) subject to the union exclusion BECAUSE their employment is not subject to the terms of a collective bargaining agreement. That is obvious when you note their income level. This is key: YOU DO NOT GET TO COUNT THEM AS UNION EMPLOYEES FOR THE ERISA EXCLUSION. Just read the actual definition in your plan document; you will see the standard language of employees whose employment has been subject to good faith negotiations blah blah blah. That does NOT describe the business owners. The union does not set their compensation levels, their benefits, nor their working conditions. You need to be very careful here. In fact, it is even possible that the union can renege on their retirement benefits some day if they get into a dispute with the union; the union will declare that they were never eligible for the retirement plan since they are not subject to the collective bargaining agreement (they most likely will return any money paid by the participants into the plan, but not the dues!). You did not explain enough about the business; are there employees other than the owners? I assume so. You haven't told us what "YOUR PLAN" is or what it is you are trying to do. You mention "maxing them out in this plan" but it is not clear what "this plan" is. But be VERY CAREFUL with these situations. We had some owners in New Hampshire who got burned; a labor lawyer suggested getting a separately written statement from the union saying that they understood that the owners were not subject to the CBA but, nonetheless, the union retirement benefits would not be revoked by the plan for that reason. Even that does not absolutely guarantee it, but it provides something called equitable estoppel if they have to go to court to enforce the benefit. Larry

Tom, what about the fact that she has no hours in 2018 and wasn't an employee for any part of 2018?

Bill his the nail in the proverbial head. If W-2, they can elect to defer 100% of any net paycheck; we have lots who make their full deferral out of a single bonus check in December. if K-1, then they can put the funds in any time during the year but it is all treated as earned at the end of the year. We mandate that our clients make their deferral deposits by year end, even though there is a slippery slope with self-employed individuals that can be argued allows them to make the deposit of their elected deferral (which does have to be done prior to the year end) sometime after the year end. We don't like having to deal with that so we avoid it if at all possible.

Austin; how could I miss it? I included it in my own posting an hour ago. In the immediate prior post to yours I said what I am still looking for; something that says what I am saying is NOT ACCEPTABLE. The other are the opposite: they are examples of what is acceptable but they do not include language that say they are the exclusive means of meeting those tests.

As I said earlier (but now a little stronger) there almost certainly is language that says he can get paid out at NRA. That section will override the termination/BIS rules that apply before NRA.

All right, but I still really need to see something that says you CAN'T do this. You said the IRS has specifically said that? Any chance of find that; my search was fruitless.

Not ready to buy it yet. The first does example does not do it at all. Yes, that is the definition of integration level in the plan, but that has nothing to say about showing that a particular allocation "scheme" meets a given integration formula that is acceptable (without a definition in the plan of integration level). The second one is only a little more troubling than the first. I think I need Mike's reference at some point to be convinced, only because it is quite possible for IRS to take the position (on a plan with each person in their own group) that an allocation meeting the equivalent of a properly integrated plan formula is non-discriminatory. I need to see where it says that such an allocation DOES NOT meet non-discrimination. In fact, this quote from an earlier posting: From §1.401(a)(4)-2(b)(2)(ii) (ii) Permitted disparity. If a plan satisfies section 401(l) in form, differences in employees' allocations under the plan attributable to uniform disparities permitted under §1.401(l)-2 (including differences in disparities that are deemed uniform under §1.401(l)-2(c)(2)) do not cause the plan to fail to satisfy this paragraph (b)(2). could be read to say exactly what I am saying. The allocation meets the rules IN FORM (in the form of the allocation) and therefore does not fail a4. Mike?

Austin: You say the rules "clearly" require that it has to be written into the plan. How about a cite for that? I can't seem to find it.

Huh? If you pass a design based allocation (which it would be), you don't use rate groups? The purpose of a -11g amendment is to allocate additional benefits in such a was as to PASS the general test. You have it backwards. If you allocation to the groups meets a regular integrated formula using the appropriate allocation percentage that goes with the percentage of the TWB that you are using as your integration level, you don't need to do anything else.

You can do that (though your original posting says 20%); at 50% of the taxable wage base your integration percentage if 4.3%. So long as you do your allocation to the groups on that formula, you still don't need an 11-g amendment. You can show that you met that allocation method if you ever need to prove non-discrimination. And no matter what percentage of the TWB you use, so long as you use the corresponding integration percentage, you can still using your groups without any amendment.

Thanks; I would actually reject that QDRO on behalf of the plan, and have them write the amount the person is entitled to as of 12/31/16. If I had those numbers, I would be happy to give them to the parties. But, it is again a nonsensical mathematical approach since you are deducting 2008 dollars from 2016 dollars; I am going to bet the attorneys figured that they were married from 2008 to 2016 so that's a fair way of doing it. It isn't.

It is likely there is another document section that you are ignoring that provides that he can get paid out at NRA. That would override having to wait for a 1 year BIS.

Calavera has it right. We all should agree that the individual in this situation is NOT still employed/working on 1/1/18, so he MUST have retired in 2017. I think it is just that simple.

I resemble that! :-)

This absolutely can be done and you now have the references. HOWEVER, this started out with a plan that has each person in their own group. When you make the contribution, you need to declare how much is being made for each group (person). If you do that in a way that the allocations are meeting non-discrimination by being an allocation that meets the normal safe harbor "integration" rules, then you don't even do an amendment!!!! Why are we talking about -11g amendments in this case? All we need is the allocation by group that meets the safe harbor integration rules. Has everyone walked past the point of the question? What am I missing?????

Easy: our plans use a very generous definition of disability; the inability to do their job and determined by a physician of the plan's choosing. However, we almost always will accept the a letter from the doctor of the employee, making that doctor the plan's chosen doctor for this purpose. You are right, almost the only thing it gives is full vesting and it's just never an issue (in 35 years). Our clients don't fight disability determination, so the new rules are just not a big deal. We have never had a disability claim become an issue in all these years. Hope that helps. How we handle the few disability situations that arise each year are, I believe, would already meet the new rules which is why it will not be an issue with any clients. WE guide the client on disability issues and have never had a client reject our advice/determination. I think the key here is what you note: in all your years, you have never seen a problem situation arise; that's what we expect to be the situation as well. And, our DB plans operate in exactly the same way.

No, you can't disqualify the plan for lack of historical data that is not germane to their current benefit entitlement. And there is no requirement that the plan provide such data. There are normal alternatives for calculating the benefit split, and a competent QDRO expert will understand those alternatives and, if hired, can explain all that to the parties and get agreement as to the methodology that will be used.

I wouldn't even try. The plan is NOT REQUIRED to do this work; they are required to do it and pay for it and if the data is not available, they have to do something else (like using a coverture fraction). It simply is NOT YOUR JOB and they should be told that.

Again, we would just reject that order; doesn't matter if we have the data or not, the PLAN is not going to do the calculation (because it is imprecise and open to arguments between the parties anyway). Now, if they hired me to produce the order and I have the information, they can pay me to go through that trouble (at my hourly rate) or, I can calculate the coverture percentage without reference to the specific benefits earned which is the more appropriate way to do so. My preference is to be, and I generally tend to be, part of the negotiations of what the settlement will provide. On the other hand, if they REALLY are adamant about wanting something nonsensical like you say they want (BTW, I have never seen such a request, and we would reject it out of hand if it were part of a proposed QDRO), then THEY have to do the work by paying someone to do it outside of the plan; that someone could be me but I really think it is unnecessary. They might very well find that they can't find someone to do the work because the necessary information is not available, and hopefully that will move them to something else like the typical coverture fraction calculation.

We don't see it as a big deal. We already have the amendment from FIS (Robert Richter did it). We will combine that with the tax reform changes regarding hardship distribution/loan provisions and sent it out toward the end of the year. The explanation is easy: "DOL made some changes that don't affect you but we need to add the language to the document; easiest to just sign and return but call if you have questions". Larry.

I question why old information about prior plan years is necessary for a current QDRO (we'll talk about the late provided ones later). I draft most QDROs for our client plans; there is nothing in prior years that should impact a current division of a participant's account. And if a QDRO is written by someone else that would require that we go back years and reconstruct accounts, we reject it (actually, the client rejects it with our advice :-) ). I wonder if you are accepting BAD QDROs. Can you tell us why you need old info and what info you need and how it impacts a currently drafted QDRO?

No resource necessary. He is self-employed with regard to his board of directors income and can clearly have a plan established for his self-employment income.

Please give us the EXACT language from the document; it more than likely is more like what Tom posts and now what it says above. The precise language is ALWAYS important.

Luke, there almost definitely is additional language in the plan document that deals with self-employed individuals and their compensation. I'd bet on it. So, I don't look at the statement as to what the definition of comp is as even dealing with the self-employed issue because there will be additional language in the plan that deals with the self-employed issue regardless of how comp is defined when dealing with a W-2 employee. It would be nice if the poster of the original message would confirm.