Jump to content

QDRO - Incorrect Amount Paid


Recommended Posts

QDRO Alternate Payee was paid too much from ex-Spouse's 401(k) Plan. What if anything can be done to disgorge the funds from her IRA and pay back to the Plan? What about the loss of investment opportunity?

Any assistance would be greatly appreciated.

Link to comment
Share on other sites

The excess is not eligible for rollover. Was it sent electronically? Can it be reversed?

Have you tried having the company that sent the money contact the IRA company?

You may want to try sending a letter to the Participant explaining the error, that it is not eligible to be in the IRA and if it is not sent back to the Plan it will be reported to the IRS. ( A corrected 1099 does need to be done if it is not sent back)

Link to comment
Share on other sites

The IRA Rollover was issued in check form. The IRA's Financial Advisor is willing to disgorge the funds and received approval from their Broker/Dealer. Unfortunately, the Alternate Payee is another issue. A letter of correction with both calculations have been sent to the Alternate Payee, Participant and Plan Administrator.

Link to comment
Share on other sites

As a suggestion, send the information to the Alternate Payee's lawyer.

The AP obviously does not believe the evil twins (the participant and plan administrator), but the AP may be more receptive to the lawyer's explanation of what happens if the excess is not returned.

Link to comment
Share on other sites

Milgram 10-1862_opn.pdf

In the attached Second Circuit decision, the court held that a participant’s claim against a plan itself (rather than the plan’s administrator) is valid, even if enforcing that claim means subtracting amounts from the individual accounts of all participants. (The plan had paid an alternate payee more than a QDRO specified, and the participant demanded restoration of what belonged to him.)

A plan's administrator (and other fiduciaries) might think about this before too hastily giving up on pursuing the plan's legal and equitable remedies to get a return of the overpaid amount.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

Link to comment
Share on other sites

As a suggestion, send the information to the Alternate Payee's lawyer.

... assuming the letter will answer the question, "why is it incorrect?"

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.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...