QDRO Hold & 401(a)(14)

[Guest ERISAhead]

QDRO procedures provide for hold to be placed on participant's account following receipt of either signed order, proposed order, or written notice of forthcoming order. During pendency of the hold, participant, who has at least 10 years of participation in the plan, attains normal retirement age and retires. Thus, Code Section 401(a)(14) would generally require that the participant be allowed to commence benefits under the plan. May the participant be prevented from commencing benefits by virtue of the hold?

I recognize that the required minimum distribution rules (Treas. Reg. Section 1.401(a)(9)-8, Q & A-7) carve out an exception for the period, of up to 18 months, during which the qualification of a domestic relations order is being determined. I do not see any way to read the regulation as also applying to proposed orders or notice of a forthcoming order.

I could not locate a similar provision for purposes of Code Section 401(a)(14). Does anyone have any thoughts?

[QDROphile]

My thoughts are to get straight when restriction is required (hint: not when the DOL thinks), get straight what restriction is required ("hold" implies a much broader scope that what is provided in the law), give high priority to determnation of qualification, and rethink what the plan should say with respect to the 401(a) (14) requirment. It may be too late to have the best possible provisions in the plan and QDRO procedures on most of the points. You may have to focus now most on what restriction is required and the best way to accommodate start of benefits.