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November 12, 2004
Employers May Now Charge for QDRO Approval
In a little noticed change, the US Department of Labor issued a "field assistance bulletin" in May, 2003, that permits employers and administrators of ERISA-regulated defined contribution retirement plans (such as 401(k) plans) to charge QDRO processing expenses. The Wall Street Journal recently reported that one large plan administrator (Fidelity Investments) now charges for QDROs for 40 of its 200 plans for which Fidelity processes QDRO documents. The decision to charge is made by each individual employer.
Here is the text of the DOL "Field Assistance Bulletin" regarding QDRO/QMCSCO fees:
Qualified Domestic Relations Orders (QDROs) and Qualified Medical Child Support Order (QMCSOs) Determinations. ERISA does not, in our view, preclude the allocation of reasonable expenses attendant to QDRO or QMCSO determinations to the account of the participant or beneficiary seeking the determination.
It should be noted that, pursuant to 29 CFR § 2520.102-3(l), plans are required to include in the Summary Plan Description a summary of any provisions that may result in the imposition of a fee or charge on a participant or beneficiary, or the individual account thereof, the payment of which is a condition to the receipt of benefits under the plan. In addition, § 2520.102-3(l) provides that Summary Plan Descriptions must include a statement identifying the circumstances that may result in the “ . . . offset, [or] reduction . . . of any benefits that a participant or beneficiary might otherwise reasonably expect the plan to provide on the basis of the description of benefits . . .” These requirements are intended to ensure that participants and beneficiaries are apprised of fees and charges that may affect their benefit entitlements.
The views expressed herein supersede the views expressed in AO 94-32A.
Posted on November 12, 2004 in Property Distribution | Permalink
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November 11, 2004
College Support: Sorority/Fraternity Fees & Spending Money
The Iowa Supreme Court issued yet another post-secondary education subsidy (college support) case, In re Marriage of Goodman. Although the impact of the decision may be arguably be tempered by the "unique facts" of the case, the decision does seem to expand the type of expenses that may be included in a post-secondary college subsidy. Unfortunately, the decision provides little additional clear guidance on a subject that for some reason has spawned a considerable amount of family law litigation in Iowa. In Goodman, the parties agreed on how to share college expenses for an older child, but could not agree for a younger sibling. It is unclear from the decision whether the Court based its decision upon the parties' agreement for the younger child or whether sorority/fraternity fees and cash allowances are in fact "necessary" under the statute alone.
The Court did issue a clear opinion that child support terminates immediately upon graduation from high school even if the child is enrolled to begin a post-secondary educational program in the next semester.
Finally, the Court issued an unequivocal statement that, "By putting child support at issue, the parties put child medical support at issue." Therefore, Iowa district courts have authority to modify medical support provisions of a decree whenever child support is modified even if not specifically requested by either party in their pleadings.
Posted on November 11, 2004 in Post-Secondary (College) Subsidy | Permalink
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Main
| February 2005 »
November 12, 2004
Employers May Now Charge for QDRO Approval
In a little noticed change, the US Department of Labor issued a "field assistance bulletin" in May, 2003, that permits employers and administrators of ERISA-regulated defined contribution retirement plans (such as 401(k) plans) to charge QDRO processing expenses. The Wall Street Journal recently reported that one large plan administrator (Fidelity Investments) now charges for QDROs for 40 of its 200 plans for which Fidelity processes QDRO documents. The decision to charge is made by each individual employer.
Here is the text of the DOL "Field Assistance Bulletin" regarding QDRO/QMCSCO fees:
Qualified Domestic Relations Orders (QDROs) and Qualified Medical Child Support Order (QMCSOs) Determinations. ERISA does not, in our view, preclude the allocation of reasonable expenses attendant to QDRO or QMCSO determinations to the account of the participant or beneficiary seeking the determination.
It should be noted that, pursuant to 29 CFR § 2520.102-3(l), plans are required to include in the Summary Plan Description a summary of any provisions that may result in the imposition of a fee or charge on a participant or beneficiary, or the individual account thereof, the payment of which is a condition to the receipt of benefits under the plan. In addition, § 2520.102-3(l) provides that Summary Plan Descriptions must include a statement identifying the circumstances that may result in the “ . . . offset, [or] reduction . . . of any benefits that a participant or beneficiary might otherwise reasonably expect the plan to provide on the basis of the description of benefits . . .” These requirements are intended to ensure that participants and beneficiaries are apprised of fees and charges that may affect their benefit entitlements.
The views expressed herein supersede the views expressed in AO 94-32A.
Posted on November 12, 2004 in Property Distribution | Permalink
|
TrackBack (0)
November 11, 2004
College Support: Sorority/Fraternity Fees & Spending Money
The Iowa Supreme Court issued yet another post-secondary education subsidy (college support) case, In re Marriage of Goodman. Although the impact of the decision may be arguably be tempered by the "unique facts" of the case, the decision does seem to expand the type of expenses that may be included in a post-secondary college subsidy. Unfortunately, the decision provides little additional clear guidance on a subject that for some reason has spawned a considerable amount of family law litigation in Iowa. In Goodman, the parties agreed on how to share college expenses for an older child, but could not agree for a younger sibling. It is unclear from the decision whether the Court based its decision upon the parties' agreement for the younger child or whether sorority/fraternity fees and cash allowances are in fact "necessary" under the statute alone.
The Court did issue a clear opinion that child support terminates immediately upon graduation from high school even if the child is enrolled to begin a post-secondary educational program in the next semester.
Finally, the Court issued an unequivocal statement that, "By putting child support at issue, the parties put child medical support at issue." Therefore, Iowa district courts have authority to modify medical support provisions of a decree whenever child support is modified even if not specifically requested by either party in their pleadings.
Posted on November 11, 2004 in Post-Secondary (College) Subsidy | Permalink
|
TrackBack (0)
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