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Timing of distribution to alternate payee - protected benefit? Can plan be amended to postpone?


Guest LMalone

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Guest LMalone

When plan was restated for GUST, a provision was included that, upon issuance of a valid QDRO, the alternate payee could elect an immediate distribution, even though the participant may not be entitled to a distribution under the plan terms.

Employer now says he never knew this provision was in there and does not want to operate under it.

May this be eliminated now? We have a valid QDRO to be filed.

I have a feeling the answer is NO, it may not be eliminated, but any alternatives would be appreciated.

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Guest LMalone

We are thinking of amending the QDRO, which has not yet been filed, instead of amending the plan. The revision will specify payment at the participant's "earliest retirement age." Currently, the plan provides for an immediate payment to the AP unless the order specifies a later date.

Further ideas will be appreciated. The Employer has maintained a policy for many years of not paying terminees until NRA, and he wants to apply this to AP's as well.

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Either the plan provision exists or it doesn't. If it's there, the QDRO can take advantage of it, if the parties agree.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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