ERISAAPPLE

I think this requires fiduciary judgment. If you a find a participant or a participant finds you, at a minimum give that participant the notices that are currently relevant. I don't see a need to send the participant a 20-year old SAR, and I can't imagine the DOL or a court would ding you for that - assuming the plan acted in accordance with ERISA's fiduciary duties all those years. Of course, written requests would be a different matter. If you want to dot all your i's and cross all your t's and mitigate all risk, give the participant everything.

What do you mean by "normal" form of payment? As I understand things, the normal form of benefit is a DB concept under 411(a)(7)(A)(i). It is used as a measure to value the benefit. Under 411(a)(7)(A)(ii), the value is the account balance. I admit my understanding of this could be mistaken. If by "normal" form you mean the default election, that would not consistent with Rev. Rul. 2012-3, because in that Rev. Rul. the default election is a life annuity. Even so, the ruling says the QJSA rules do not apply even with the default annuity unless the participant expressly elects the annuity option.

Are you filing with the PBGC or is this a non-PBGC plan? For PBGC terminations, there are distribution restrictions after you send the NOIT, but even then you can generally make distributions on account of termination of employment. And by "generally," I mean there are rules that apply.

The person who asked the question said there is. The question says the other participants will get their distributions six months from now.

That was my question: why is there a 6-month wait for the other participants.

Another tidbit. An internal Revenue manual I found on the internet suggests my conclusion is accurate. If the plan offers an annuity, how could the QJSA rules not apply to some participants and not others? I don't know, however, if this is the current manual. 4.72.9.2.1 (02-26-2015) IRC 401(a)(11)(B)(iii) IRC 401(a)(11)(B)(iii) provides that the QJSA/QPSA requirements apply to any participant under any defined contribution plan, even if the plan is not subject to the funding standards of IRC 412, unless the plan: Provides that the participant’s spouse must be entitled to the full non-forfeitable account balance upon the participant’s death. Does not offer a life annuity, or the participant does not elect a life annuity. With respect to a participant is not a transferee plan that is subject to the survivor annuity requirements, or there is an acceptable separate accounting between transferred benefits and any other benefits under the plan. Note: For purposes of the two conditions in b and c above, the QJSA and QPSA rules may apply to some participants and not others.

That used to be my understanding too - if the plan offers the annuity, spousal consent is required, period. I am reconsidering that position. It seems my new conclusion is supported by the analysis of the Revenue Ruling. I'm not sure a distribution option under the investment and the options provided by the plan can be distinguished. Why would the QJSA rules apply to the plan in the Revenue Ruling at all, if the plan does not offer annuities? The election would be under the annuity contract, not the plan. How can a participant elect an annuity the plan does not offer?

There are so many relevant factors it would impossible to address them all here. Here are a few. If the plan is self-funded, it is always nice to have the final discretion to pay benefits. You can have that though and still out-source. If in-source, the claims regs require you to hire a medical professional for claims involving medical judgments (unless you already have an in-house resource). In either case (insured or self-insured), the provisions of most "plan documents" are really just software on the insurance company's computers. That makes it more efficient for them to administer the claims. They know what their products cover. For HIPAA, it is easier to separate the plan from the plan sponsor if outsourced, but I would not consider that to be a driving factor.

If the old QDRO was done then you (or she) could get a copy from the court. If the plan already accepted it, they should accept a second copy. That doesn't solve what your account balance was back in 2007 (or 2000, as your question mentions both years). If the plan received the QDRO and accepted it, it is supposed to have a record of her account balance. That is required by ERISA. If it does not, the easiest and quickest approach would be for you and your ex to agree on a number and submit a new qdro with that number that supercedes the prior QDRO. I realize of course that such an agreement is easier said than done. She will think you had $100 billion in 2007, and/or you had only $10 in 2000. If you are like most people, including me, you will probably be prone to remembering that in 2007 you had only a few bucks and maybe some pocket change and lint in your account. You will have less leverage because the lack of records was the plan's fault, not her fault. Hopefully her old attorney would still have your ex's file and it will have a statement from your 401(k) account in 2007 (or 2000). Your attorney might have your file with statements. If the QDRO was never done, never submitted to the plan, or the plan rejected it, your ex has to start over. In that situation, coming to a quick agreement is also most like the easiest approach. You might have a little more leverage because it would have been her fault or her attorney's fault. It may be that in 2007 everyone agreed that 2000 was an appropriate date. Was that when you got married, but you already had the 401(k) before you were married? It could also be that back then nobody could get the data , and everyone kicked the can down the road without having complete data. That brings me back to the same position. Just come up with a number and see if you can get your spouse and her attorney to agree to it. Get a new QDRO that supercedes the old QDRO (if necessary) and that awards your ex that number, and move on. You should consider getting a family law attorney to make sure the matter is fully resolved from your perspective.

I want to make sure my understanding of the QJSA rules for DC plans is accurate. As I read Rev. Rul. 2012-3, if a plan offers a single life annuity or a QJSA as the default form of distribution in the absence of a participant election, and also offers a lump sum, spousal consent is not required if the participant elects the lump sum prior to the participant's annuity starting date. Assume the plan has no annuity investments, and thus, e.g., Situation 2 in Rev. Rul. 2012-3 would not apply.

It has been a while since I looked at issues like this. My recollection is that if the restriction is imposed by the investment vehicle, it is OK. If the restriction is imposed by the plan, I think you may have a problem. It would be different if nobody were to allowed to invest new money. If I recall correctly, when you eliminate a BRF, but some feature of that eliminated BRF continues to apply to the already-accrued benefit, you meet the BRF rules if that feature only applies to the already-accrued benefit. Consider a different BRF. If you eliminated a different BRF, such as a plan loan, but allowed the owner to get a loan on new money, it seems to me that would clearly be an issue. Look in the BRF regs. I'm pretty sure they discuss how to address the elimination of BRFs.

I would treat the request as a claim for benefits and, if the facts are as I think you are saying they are, deny it. In the denial I would include a copy of the waiver he signed. He would have a right to a copy in any event under the claims regulations. He may be happy the grandchildren will receive it.

I am just an ERISA attorney. I would ask an auditor.

Again, don't quote me on this, but I'm pretty sure when they say you have to file the financial statements, they mean the 5500 itself and all applicable schedules. The Schedule H (I assume you are not filing a 5500 SF) is a financial statement. I would ask the auditor and see what she or he says.

I said I would submit it to VCP. I have submitted many retroactive amendments to the IRS through VCP contingent on IRS approval. They have approved them every time, often without comment.

Check the 5500 instructions. I have to believe they say something.

If the plan was on notice of the pending QDRO and made the distribution anyway, you might have a chance to go after the plan. Your fact pattern suggests though that the first time the plan received any notice was after the distribution. Even if the plan had received prior notice, that would still be a tough row to hoe. You would need to know the plan's QDRO procedures, specifically its procedures on hold periods. Otherwise, the plan is out of it and you need to look to family law state court.

Not sure, but I think in the first year the financial statements required are the ones you provide in the 5500 itself, not in the audit report that otherwise would have been filed. What do the 5500 instructions say?

If I were doing this from a blank slate, assuming the client can get the amendment authority together in a timely fashion (board, committee, etc.), assuming also contributions are late and the CBA provides a larger contribution, and finally assuming I have perused the plan document and found nothing I could hang my hat on to justify a contribution without a retroactive amendment, I would have the plan sponsor amend retroactively and make the corrective contribution with earnings and then submit for VCP, essentially all at the same time. If someone were to balk, I would make the retroactive amendment contingent on the receipt of a compliance statement. If MoJo were the trustees counsel and therefore they would not accept the contingent amendment, I would just tell the client to make it retroactive and tell the client not to worry whether the IRS would approve it. A lot of how you approach this would depend on the client's relationship with the union.

There is no question a trustee can reject a contribution. A trustee accepting the res of the trust has been a fundamental principle of trust law since trusts have existed. Most trust agreements, somewhere, say something to the effect that the trustee agrees to accept the res. If the contribution were to result in a PT, the trustee would have a duty to reject the contribution. A trustee could not blindly accept the plan sponsor's parking lot, or a doctor's medical equipment used in the sponsor's practice, as a contribution and just hold it as trust property while the plan sponsor's employees use the property for the business. The trustee would be required to reject the contribution. Even if the contribution were cash, such as the proceeds of an ESOP loan that does not meet the exemption, the trustee would have a duty to reject the cash. Language in the plan document that violates federal law is void. If the plan language says a same-sex spouse is not a spouse entitled to a QJSA, that language is void and the fiduciaries cannot follow it just because the plan says it. If the plan language says a woman is required to contribute more for an annuity because women have a longer life expectancy, that language is void as a violation of Title VII, and cannot be enforced by the fiduciaries just because the plan says it. If the language says the plan must violate the NLRA, that language is void. The original question was which takes precedence. Everyone agrees the contribution required by the CBA must somehow or someway be made to the plan (again, if the CBA provides a bargained-for benefit that is greater than the plan's benefit). To me, that means the CBA, not the plan, takes precedence. Once more, I guess it depends on how you define "takes precedence."

It appears you would advise the trustees not to accept the contribution, even if offered, until the plan is amended. I would recommend they accept the contribution, if offered, even before the plan is amended, given that the plan must by law be amended retroactively anyway. That is really where the rubber would hit the road here. I believe the contribution could be a plan asset, regardless of the terms of the plan. You appear to think it is not. Let's change the assumptions. I originally assumed the CBA is better, and said the "general rule" is the CBA takes precedence. Just as ERISA doesn't allow plan fiduciaries to violate the NLRA, the NLRA does not allow the CBA to violate ERISA. For example, if the CBA were to require an accrued benefit be reduced, the plan would take precedence.

Why would they want to do that? Just increase it this year. Are they hitting the 415 limit or some other limit this year?

I seem to recall a few years ago the DOL put out something that said the DOL's position is you must have two documents. As Peter mentioned, courts have clearly allowed one document. If a client wants one document, I give them one document and explain how the the DOL might bug them about it.

Under no circumstances would the language of the plan document control if the CBA requires a contribution, but the plan does not allow for the contribution. I don't see how that can mean the plan takes precedence. The bottom line is that, regardless of what the plan provides, the employer and the plan's fiduciaries will be required by law to comply with the CBA. The employer will be required to make the contributions, and the plan's trustee/fiduciaries will be required to accept the contributions on behalf of the plan. If the employee handbook says the employer will not discriminate against black women, but the plan document were to say black women are not allowed to accrue a benefit, would you say the plan document takes precedence over the handbook? That would be silly. It is the same thing here. Just as the plan document cannot say the plan will violate Title VII, it also cannot say the plan will violate the NLRA. Such a clause would be null and void. ERISA, and the requirement to follow the terms of the plan document, do not allow plans or their fiduciaries to violate other federal laws. Any such language in the plan is void. The employer's failure to amend the plan only causes the plan to be disqualified, which could lead to other union remedies, but it does not alter the legal duty of the fiduciaries to accept the contributions on behalf of the plan. If the trustee were to refuse the contribution by relying on a wooden rule that it must follow the plan's terms, not the NLRA, and the union were to lose money as a result, I am confident a judge would find the trustee breached its fiduciary duties and therefore personally liable for those losses.

Again, clearly the CBA takes precedence. Even Mojo admits the contributions must be made to the plan, notwithstanding the plan language. The union would not sue the plan to cause the employer to make contributions. The union would sue the employer to cause the employer to make the contributions. The plan fiduciaries will have no authority to deny those contributions. If those fiduciaries go to the IRS, the DOL, or even to court on behalf of the plan, and try to argue the contributions can't be made because the plan doesn't allow the contributions, the plan will lose. Even if the employer refuses to amend the plan to allow the contributions, the plan will still lose. Even if the employer blows up the plan and makes it a non-qualified plan, the plan will still lose. No matter how you slice it or dice it, and even if you try to make Julian fries out of the plan document, the plan will always lose in this scenario, and the CBA will always win. There is no scenario under which the plan could deny the contributions required by the CBA on the basis of the language in the plan document. In my book that means the CBA takes precedence. I guess it all depends on how you define precedence.