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Distributions from Church plans


Guest metzger
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Guest metzger

Are lump sum distributions allowed to roll-over into an IRA? It is a Defined Benefit, using prototype language, and been set up for the region's Catholic church. It has never been filed to the IRS and no 5500's have ever been filed.

Every book I look in refers back to 403(B) plans, is there a Church Plan answer book out there?!!:confused: Any help would be appreciated!

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I think the first question should be, What do you mean by a Church Plan?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Guest Danny Miller

In terms of resources on church plans, David Powell and I co-authored a chapter on church plans in Panel Publisher's 403(B) Answer Book. The chapter discusses special 403(B) church plan rules, but also discusses church plan status issues and contains a list of the special exemptions accorded 401(a) qualified church plans.

On distributions from church plans, a section 401(a) qualified church plan is like a regular qualified plan with respect to rollover rules. Hope this helps. Please e-mail me if it doesn't answer your question.

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Guest Tom Geer

And it's a qualified plan with rolloverable distributions regardless of whther it's electing or non-electing under ERISA and regardless of what sub-type of church sponsor you may have.

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  • 1 month later...

are you saying that a participant must have a separation from service, reach age 59 1/2 or have a hardship before they can get a distribution? i thought i read somewhere that 403(B)(9) plans were exempt from many of the requirements of 403(B) plans.

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Yes, I agree The 403(B) Answer Book is a good Q&A resource. There is also a book "The 403(B) & 457(B) Primer Plus" available through the benefits link bookstore - it is an 11-chapter book devoted to 403(B) & 457(B) plans, and chapter 11 is devoted entire to churches and church organizations. As the co-author, I believe it is pretty good - certainly widely used.

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Guest Tom Geer

If you want in-depth analysis, the easiest resource is the BNA Tax Management Portfolio series. They have portfolios on distributions, plans of EOs and (I think) non-ERISA church plans.

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Many church plan sponsors like sponsors of government retirement plans do not obtain determination letters for retirement plans. There a First amendment issue similar to the exemption of churches from filing a 990 form with the IRS. Second a church plan is subject to limited requirements for qualification. You need to have counsel review the plan and its opeation to determine wither is meets te necessary requirements for qualification.

mjb

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