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Dogmom

457/divorce

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Hello,

I have a question if anyone can help me. My husband has filed for a divorce and in the papers I was given he is offering me his 457. The account is (as of 2-1-08) worth a little over 29,000.00. My husband told me I would only get about 7500.00 due to the 'hit' he will have to take for taking the money out. Does that sound correct? It seems a little much for a penalty to me. Thanks in advance!

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Guest Sierra

Hello,

I have a question if anyone can help me. My husband has filed for a divorce and in the papers I was given he is offering me his 457. The account is (as of 2-1-08) worth a little over 29,000.00. My husband told me I would only get about 7500.00 due to the 'hit' he will have to take for taking the money out. Does that sound correct? It seems a little much for a penalty to me. Thanks in advance!

 

Dogmom: What is your husband's employment status?--- because while in-service he may not withdraw his/her 457 balance. Has his Plan's Administrator told him he can?

 

Joel L. Frank

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Is he giving you the entire 457 account, or just a portion of it? If he really is giving you the entire account, $7,500 out of an original account balance of $29,000 seems incredibly small.

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Vince,

That what I was thinking also and why I posted here. Yes, it is the entire amount. I have a call into my lawyer but the waiting is really bothering me.

Thanks for the reply

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Guest Sierra

Vince,

That what I was thinking also and why I posted here. Yes, it is the entire amount. I have a call into my lawyer but the waiting is really bothering me.

Thanks for the reply

 

 

Re: Emergency Withdrawal:

 

Divorce, in and of itself, is not enough of a reason to close out the account while still working. Your husband's entire financial picture needs to be investigated by the Deferred Compensation Board before reaching a decision on his Emergency Withdrawal request. I assure you, if they follow the IRS rules---which they should--- it is a humdinger of an investigation.

 

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Vince,

That what I was thinking also and why I posted here. Yes, it is the entire amount. I have a call into my lawyer but the waiting is really bothering me.

Thanks for the reply

 

 

Re: Emergency Withdrawal:

 

Divorce, in and of itself, is not enough of a reason to close out the account while still working. Your husband's entire financial picture needs to be investigated by the Deferred Compensation Board before reaching a decision on his Emergency Withdrawal request. I assure you, if they follow the IRS rules---which they should--- it is a humdinger of an investigation.

 

 

Couldn't it be released as decreed by QDRO if the plan document allows it?

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Guest Sierra

 

Vince,

That what I was thinking also and why I posted here. Yes, it is the entire amount. I have a call into my lawyer but the waiting is really bothering me.

Thanks for the reply

 

 

Re: Emergency Withdrawal:

 

Divorce, in and of itself, is not enough of a reason to close out the account while still working. Your husband's entire financial picture needs to be investigated by the Deferred Compensation Board before reaching a decision on his Emergency Withdrawal request. I assure you, if they follow the IRS rules---which they should--- it is a humdinger of an investigation.

 

 

Couldn't it be released as decreed by QDRO if the plan document allows it?

 

 

Vince, I thought about a QDRO too but my research doesn't address it. How about yours?

 

Best,

Joel

 

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Guest Sierra

 

 

Vince,

That what I was thinking also and why I posted here. Yes, it is the entire amount. I have a call into my lawyer but the waiting is really bothering me.

Thanks for the reply

 

 

Re: Emergency Withdrawal:

 

Divorce, in and of itself, is not enough of a reason to close out the account while still working. Your husband's entire financial picture needs to be investigated by the Deferred Compensation Board before reaching a decision on his Emergency Withdrawal request. I assure you, if they follow the IRS rules---which they should--- it is a humdinger of an investigation.

 

 

Couldn't it be released as decreed by QDRO if the plan document allows it?

 

 

Vince, I thought about a QDRO too but my research doesn't address it. How about yours?

 

Best,

Joel

 

 

Vince:

 

The IRS in Q & A sessions has stipulated that divorce/separation is one of the situations that do NOT allow for the cashing in of the account. This is great fodder for my Column in The Chief-Civil Service Leader.

 

Dogmom---would you care to give us any feedback?

 

 

Peace and Hope,

Joel L. Frank

 

 

 

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Vince,

That what I was thinking also and why I posted here. Yes, it is the entire amount. I have a call into my lawyer but the waiting is really bothering me.

Thanks for the reply

 

 

Re: Emergency Withdrawal:

 

Divorce, in and of itself, is not enough of a reason to close out the account while still working. Your husband's entire financial picture needs to be investigated by the Deferred Compensation Board before reaching a decision on his Emergency Withdrawal request. I assure you, if they follow the IRS rules---which they should--- it is a humdinger of an investigation.

 

 

Couldn't it be released as decreed by QDRO if the plan document allows it?

 

 

Vince, I thought about a QDRO too but my research doesn't address it. How about yours?

 

Best,

Joel

 

 

Vince:

 

The IRS in Q & A sessions has stipulated that divorce/separation is one of the situations that do NOT allow for the cashing in of the account. This is great fodder for my Column in The Chief-Civil Service Leader.

 

Dogmom---would you care to give us any feedback?

 

 

Peace and Hope,

Joel L. Frank

 

 

 

Joel:

 

Since you you have an appetite for great fodder you better check reg. 1.457-10© which discusses the availibility of QDROs before writing your column. Dont say I never did you a favor.

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Guest Sierra

 

 

 

 

Vince,

That what I was thinking also and why I posted here. Yes, it is the entire amount. I have a call into my lawyer but the waiting is really bothering me.

Thanks for the reply

 

 

Re: Emergency Withdrawal:

 

Divorce, in and of itself, is not enough of a reason to close out the account while still working. Your husband's entire financial picture needs to be investigated by the Deferred Compensation Board before reaching a decision on his Emergency Withdrawal request. I assure you, if they follow the IRS rules---which they should--- it is a humdinger of an investigation.

 

 

Couldn't it be released as decreed by QDRO if the plan document allows it?

 

 

Vince, I thought about a QDRO too but my research doesn't address it. How about yours?

 

Best,

Joel

 

 

Vince:

 

The IRS in Q & A sessions has stipulated that divorce/separation is one of the situations that do NOT allow for the cashing in of the account. This is great fodder for my Column in The Chief-Civil Service Leader.

 

Dogmom---would you care to give us any feedback?

 

 

Peace and Hope,

Joel L. Frank

 

 

 

Joel:

 

Since you you have an appetite for great fodder you better check reg. 1.457-10© which discusses the availibility of QDROs before writing your column. Dont say I never did you a favor.

 

 

Would you be gracious enough to post up the reg you cite so all of us can see it?

 

Thanks,

Joel

 

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Guest Sierra

 

 

 

 

 

Vince,

That what I was thinking also and why I posted here. Yes, it is the entire amount. I have a call into my lawyer but the waiting is really bothering me.

Thanks for the reply

 

 

Re: Emergency Withdrawal:

 

Divorce, in and of itself, is not enough of a reason to close out the account while still working. Your husband's entire financial picture needs to be investigated by the Deferred Compensation Board before reaching a decision on his Emergency Withdrawal request. I assure you, if they follow the IRS rules---which they should--- it is a humdinger of an investigation.

 

 

Couldn't it be released as decreed by QDRO if the plan document allows it?

 

 

Vince, I thought about a QDRO too but my research doesn't address it. How about yours?

 

Best,

Joel

 

 

Vince:

 

The IRS in Q & A sessions has stipulated that divorce/separation is one of the situations that do NOT allow for the cashing in of the account. This is great fodder for my Column in The Chief-Civil Service Leader.

 

Dogmom---would you care to give us any feedback?

 

 

Peace and Hope,

Joel L. Frank

 

 

 

Joel:

 

Since you you have an appetite for great fodder you better check reg. 1.457-10© which discusses the availibility of QDROs before writing your column. Dont say I never did you a favor.

 

 

 

It took me about 1 minute to find the reg and post it up---Why couldn't Intruder do the same? Here is the reg referred to by Intruder:

 

© "Qualified domestic relations orders under eligible plans—(1) General rule. An eligible plan does not become an ineligible plan described in section 457(f) solely because its administrator or sponsor complies with a qualified domestic relations order as defined in section 414(p), including an order requiring the distribution of the benefits of a participant to an alternate payee in advance of the general rules for eligible plan distributions under §1.457–6. If a distribution or payment is made from an eligible plan to an alternate payee pursuant to a qualified domestic relations order, rules similar to the rules of section 402(e)(1)(A) shall apply to the distribution or payment."

=============================================================

This reg is irrelevant to the instant case because the IRS has taken the position that a Divorce/Separation is not a situation/circumstance that qualifies for a cash out of the 457(b) account---so the Court will not include the cash out of the account as part of a QDRO.

 

Peace and Hope,

Joel L. Frank

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414(p) 10-12:

(10) Waiver of certain distribution requirements With respect to the requirements of subsections (a) and (k) of section 401, section 403 (b), section 409(d), and section 457 (d), a plan shall not be treated as failing to meet such requirements solely by reason of payments to an alternative payee pursuant to a qualified domestic relations order.

(11) Application of rules to certain other plans For purposes of this title, a distribution or payment from a governmental plan (as defined in subsection (d)) or a church plan (as described in subsection (e)) or an eligible deferred compensation plan (within the meaning of section 457(b)) shall be treated as made pursuant to a qualified domestic relations order if it is made pursuant to a domestic relations order which meets the requirement of clause (i) of paragraph (1)(A).

(12) Tax treatment of payments from a section 457 plan If a distribution or payment from an eligible deferred compensation plan described in section 457 (b) is made pursuant to a qualified domestic relations order, rules similar to the rules of section 402 (e)(1)(A) shall apply to such distribution or payment.

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Guest Sierra

Vince:

 

A QDRO, if necessary in the instant case, will not include the cash out of the 457(b) account because the IRS has stipulated that a Divorce/Separation does not qualify as a circumstance/situation allowing for the cash out of a 457(b) account. The Regs that you and Intruder refer to simply speak to the continued tax qualification of the Plan notwithstanding the fact that a distribution, that satisfies IRS guidelines, was made pursuant to a QDRO.

 

Joel

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