Message Boards Digest

January 30, 2020

Here are the most recently added topics on the BenefitsLink Message Boards:

sbuck created a topic in 401(k) Plans

Delay in Processing Request for Rollover from 401(k) -- What Are the Damages?

"Participant left employment and attempted to rollover employer sponsored 401K to private account. Due to an administrative error (one by the employer and one by the TPA), the rollover did not occur until about 70 days after it was originally scheduled. Participant alleges that due to the error he lost a significant amount of money because he was unable to pursue the investment strategy recommended by the private account manager. I don't see any relief available under the plan document; the loss he claims is speculative and occurred outside the terms of the plan. Is this a 502(a)(3) claim, a nothing claim, or something in between?"

Number of replies posted  1 reply      Number of times viewed  53 views      Add Reply

SPARK Global Public Policy Forum -- June 23-24, Washington DC

Sponsored by SPARK
The retirement services industry's leading event: comprehensive agenda designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Record Keepers -- focus on global retirement public policy and expansion of pension reform occurring worldwide.

Stash026 created a topic in 401(k) Plans

SECURE Act Means New Plan for 2019 Can Be Adopted During 2020?

"I know the SECURE Act allows an employer to adopt a plan up until the filing of its tax return, as opposed to December 31 of the Plan Year. Is that in effect for an employer that wants to start a plan for 2019, or does it begin with plan years starting 01/01/2020?"

Number of replies posted  2 replies      Number of times viewed  49 views      Add Reply

DenT created a topic in Qualified Domestic Relations Orders (QDROs)

Who Decides QDRO Type?

"I am a federal employee under FERS and my former spouse has a Defined Benefits Plan with a large private company that must follow ERISA/REA rules. We have a final signed Consent Judgment (Louisiana). In it, the portion dividing the Pensions read as follows:

It is further ordered, adjudged and decreed, that the community interest in the respective pensions of the parties shall be determined by the use of a Sims formula. One-half of the community interest in the federal pension of WIFE shall be assigned to HUSBAND through the use of a court order acceptable for processing (COAP); one half of he community interest in the pension of HUSBAND with X COMPANY shall be assigned to WIFE through the use of a Qualified Domestic Relations Order (QDRO). Each party shall pay one-half of the cost of each COAP or QDRO. Each party shall retain as sole owner any and all other retirement accounts or retirement assets in that party's name or attributable to that party's employment with any employer.

Our marriage only took a year to dissolve (2011), but the community property division took an additional 8 years to finalize (2019). I remarried in 2018. Neither of us is retired as we are only 49 and 52. Everything has been successfully divided/transferred but this pension. Since everything else was done, I had my attorney withdraw.

I then had a QDRO drafted that was a Separate Interest QDRO. Initially there was no issue mentioned with the QDRO. However, when I received their COAP draft, they had added full survivor annuity benefits, Cost of Living Adjustments, barring payment of refund of Employee Contributions, having salary increases through retirement included in the calculation past the community termination (high 3 at retirement, rather than at marriage end), and listed his estate as the beneficiary of his proceeds should he die. I had NOT agreed to any of this.

I then provided them with OPM's rules that explain how federal pensions are divided and that they do not allow for a separate interest approach and that these other items that they are now trying to include must have been agreed to by the parties or ordered in the Judgment. I reminded them that I paid a cash equalizing payment -- which was increased in negotiations -- "the parties have agreed upon this settlement in order to settle this matter and end this litigation." We were both represented by attorneys over the 8 years of litigation and both were able to conduct discovery. This was acknowledged in the settlement. I also explained that since I am remarried, my current spouse would have to give his consent to reduce his survivor benefits when I retire (which he will not do).

Today, I received an email from his attorney that they are having the QDRO redone to a Shared Interest QDRO with no pre or post retirement survivor benefits or annuity. They are also threatening to take this back to court. I understand that he is angry that he cannot gain access to my federal pension until I retire, but that is because FERS doesn't allow for a separate interest approach. State courts cannot force a Government pension to change their plan. I responded to their threat very calmly.

Unless the Judgment states that we have agreed to a Shared Interest QDRO for the pension division, the use of a Separate Interest QDRO is used. A Shared Interest QDRO would only apply if the employee had already retired and was receiving benefits or if the Plan Administrator did not allow for a Separate Interest QDRO. To my knowledge, my former spouse has not retired. Additionally, I have confirmed with X COMPANY that they do allow for a Separate Interest QDRO.

I think that they are hoping that this threat of returning to court or changing the QDRO type will get me to voluntarily offer a survivor annuity and some of these other requests -- but I am done with negotiating. We have a final judgment and I paid extra to settle all pending matters. They had 8+ years to investigate how federal pensions are divided vs. private pensions. Since this was already determined by the court, can I just take the judgment and the initial QDRO that was prepared and just file it? I understand that he may be entitled to COLAs, but would he be entitled to benefit from my promotions and salary increases past the date of the community termination? I provided the exact working of the paragraph in the judgment -- which to me is pretty clear. What are my options?"

Number of replies posted  3 replies      Number of times viewed  52 views      Add Reply

ErnieG created a topic in 401(k) Plans

Roth Contributions by Long Term Part-Time Employees After the SECURE Act

"Going through §112 of the SECURE Act, which references elective deferrals for long-term part-time employees. Section 112(a)(1) references Code section 401(k)(2)(D) which allows for a cash or deferred arrangement. Section 112 does not reference Code section 402A relating to Roth contributions. Therefore it appears that a long-term part-time employee can make elective deferrals but not Roth contributions. Is that right?"

Number of replies posted  3 replies      Number of times viewed  54 views      Add Reply

MarZDoates created a topic in 401(k) Plans

Failure to Implement 'Negative' Election in Plan with Automatic Contribution Arrangement

"Plan has a traditional automatic contribution arrangement (no EACA or QACA). Eligible participant states that he signed an election form for 0 deferrals, which plan sponsor did not implement. Plan sponsor continued to deduct and remit deferrals. Is there a fix for this? Can the deferrals be distributed to the participant if there has not been a distributable event? I’m not seeing this in EPCRS."

Number of replies posted  1 reply      Number of times viewed  25 views      Add Reply, Inc.
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