Pam Shoup

Calculating the test is ministerial function delegated to you by the PA. No fiduciary liability. If the trustee signs off on the refunds, you have NO fiduciary liability. You could have an E&O claim if you did not process the refunds as directed, but not a fiduciary claim.

We take a fiduciary position with the plans that we service. However, we do notify the employer of their refund and QNEC options and tell them that we will process the refund if no response by X date. As a note, ordering a distribution from the plan would fall under the operational fiduciary responsibilities so determine if you are authorized to order the distribution if you are not a fiduciary.

Something else to consider, does the plan do loan re-financing? For example, if an employee takes a new loan for $1, and re-finances the old loan into the new loan, that would allow him to extend the remaining loan balance (plus $1) out to the maximum loan repayment period which would probably lower his payment amount to a more affordable number. (Don't forget to apply the loan rules as to the max available when re-financing out to a period longer than the original due date.)

When I started in this industry as an enroller (late 80s), the insurance companies were pretty much the only players in the small plan market. 401(k) plans were like the wild wild west in terms of regulation. Insurance companies used to "strongly encourage" you to use part of the contributions to purchase life insurance. If I recall correctly, there was a rule that said that only 25% of the expected contributions could be used to purchase life insurance. You then had to deal with a life application and the limited underwriting that needed done with the policy, policy delivery, PS-58 costs, etc. I guess what I am trying to say is that life insurance within a 401(k) plan has always been a pain and I am so glad no one sets them up that way anymore!

Oftentimes, it is not the atttorney or the participant who calls us, it is the alternate payee. When you ask the AP for the QDRO, you are speaking a foreign language to them. I tell them to send over what they have and I then contact the attorney and ask for the QDRO. More often than not, a QDRO has not been drafted (and whatever I have recieved does not qualify) so I then have to walk the attorney through the process. I prefer not to read through all of the details but sometimes I have to slog my way through just to figure what what the AP is talking about!