Plan acquisition/QDRO

[Guest Julie]

We recently acquired another company and merged the 401k plans. After the merger, the previous plan's administrator presented me with a domestic relations order they had received prior to the merger. Nothing was done with the order. Because the order indicates the name of the plan before it was merged into our plan, does the order have to be amended to reflect the current plan's name before we can accept it?

[Guest earthy]

I don't think an amendment of the order is a necessity.

Under the 414(l) regulations, the successor/merged plan assumes this liability. Post merger, this participant's account should have been available to pay benefits to either themselves or their beneficiaries. Treas. Reg. 1.414(l)-1(o).

See IRC 401(a)12 and section 208 of ERISA.

earthy

[RCK]

I would take a practical perspective on this situation.

I agree with earthy--an amendment of the order is not necessary.

But since this is presented as a DRO and not a QDRO, that means to me that neither you nor the prior plan have certified it as Qualified yet. If there is anything else in the order that you are going to require be changed, then get the plan name changed too. But if the order would be otherwise approvable as is, then let it go as is.

RCK

[david rigby]

RCK's advice sounds good. One minor modification: when specifying the name of the new plan, it might be a good idea to describe it as the successor to the old plan. Yes, I know it's picky, but you rarely have too much documentation. For example, if the DRO is for a former employee who still has a benefit/account in the old plan, that employee may never have been an employee of the successor company. Just avoid the confusion.

[Kirk Maldonado]

The legislative history of the Retirement Equity Act of 1984 (which added the QDRO rules) expressly states that QDROs are binding on successor plans.