pcbenefits007 Posted July 23, 2013 Posted July 23, 2013 Was wanting someone else's thoughts on creative ways to administer a DCAP mid year election change. Say a participant for 1/2 the year was contributing up to $2500 (married filing sep.) to the DCAP. Mid year, the person has a status change (divorce) and wants to change the election. Should the person be allowed to then contribute up to the $5000 limit...but prorated for the rest of the year? Other things to think about? Thanks!
Chaz Posted July 23, 2013 Posted July 23, 2013 I agree with QDROphile. Based on your description, the requested election change should not be permitted.
QDROphile Posted July 23, 2013 Posted July 23, 2013 Not necessairly. The custodial parent may have more need for child care after losing the child care capability of the spouse. For example, the noncustodial spouse may have worked part timre or may have had a non-overlapping work schedule that allowed for child care while the custodial spouse was working.
pcbenefits007 Posted July 23, 2013 Author Posted July 23, 2013 Everything I'm finding says that this type of status change could allow an increase, decrease or drop. Either case is in line w/ the consistency rule based on a participant's particular situation. I see nothing yet that says a proration is disallowed. SLuskin 1
QDROphile Posted July 23, 2013 Posted July 23, 2013 A plan can be drafted to allow less than the law allows. I doubt that the plan has such provisions applicable to the circumstances you describe. Why would anyone want to provide for proration?
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