Paying with personal assets instead?

[AlbanyConsultant]

This pooled profit sharing plan received an executed and proper QDRO from the court for participant TW to assign $X to an account for AP (well, the estate of the AP, as AP died in September 2013). TW happens to be an owner and Trustee. I called TW to discuss timing and a possible interim valuation, and he said that he talked to the attorney for the estate, and they agreed that he can pay the $X from his personal assets and not touch his plan balance, so that's what he wants to do.

Leaving aside the fact that this QDRO has been two years in the making and this probably should have been thought of before this point, does the plan have an obligation to make this distribution because a valid QDRO was received? Is there some way to modify or cancel it or otherwise 'take it back' so that it's no longer an plan issue?

Thanks.

[Lou S.]

How do you not pay the presumably valid QDRO from the Plan and how would you get the decesed AP to agree to a change in terms to pay from outside the Plan?

Also curious as to why he would want to sub out pre-tax assets for post-tax assets doesn't seem to make much sense to me but maybe there are reasons.

[ESOP Guy]

I agree with Lou they have to pay the valid QDRO. If the AP were alive yes they could modify the agreement in my mind to reflect no payment from the plan. But that seems hard to do now.

[david rigby]

It seems likely that the Plan Administrator is obligated to follow the court order.

BTW, are you sure the payment should be made to the estate of the AP, or perhaps as a rollover to the AP's IRA? Just asking.

[QDROphile]

The order must be followed if it is qualified. The order can be amended to the extent state law and the court allows.

[CADMT]

If the Participant wants to abrogate the QDRO, it must be done via a court order.

[mbozek]

This pooled profit sharing plan received an executed and proper QDRO from the court for participant TW to assign $X to an account for AP (well, the estate of the AP, as AP died in September 2013). TW happens to be an owner and Trustee. I called TW to discuss timing and a possible interim valuation, and he said that he talked to the attorney for the estate, and they agreed that he can pay the $X from his personal assets and not touch his plan balance, so that's what he wants to do.

Leaving aside the fact that this QDRO has been two years in the making and this probably should have been thought of before this point, does the plan have an obligation to make this distribution because a valid QDRO was received? Is there some way to modify or cancel it or otherwise 'take it back' so that it's no longer an plan issue?

Thanks.

If the plan has not approved the QDRO the benefits due the AP can be paid from another source. Question is whether the parties need to get court approval to pay the benefits from another source and recind the QDRO. I don't know if a voluntary waiver and release by the AP's estate of a right to benefits granted by the QDRO would protect the Plan Admin from a lawsuit by the heirs of the AP's estate under applicable state law. Waiver and release of QDRO benefits should be obtained from each heir including contingent beneficiaries if the parties do not have the QDRO recinded by court.