Guest mab Posted January 3, 2003 Share Posted January 3, 2003 When distributions are made from a multiemployer plan, who is listed as the payer on the 1099-R? Is there more than one option? Link to comment Share on other sites More sharing options...
Kirk Maldonado Posted January 3, 2003 Share Posted January 3, 2003 I'm dying of curiosity to know who you could list as the payer other than the plan. Kirk Maldonado Link to comment Share on other sites More sharing options...
Guest mab Posted January 3, 2003 Share Posted January 3, 2003 I am getting yanked around by rouge union counsel who should stay out of the ERISA area as they don't know what they are talking about. They have presented zero legal authority for their position....I just needed to make sure there was not something obvious that I was missing. Tx. Link to comment Share on other sites More sharing options...
david rigby Posted January 3, 2003 Share Posted January 3, 2003 "rouge"? Let's assume you mean "rogue", but it's funny either way. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
Guest mab Posted January 3, 2003 Share Posted January 3, 2003 Correct! I type too fast when irritated. Link to comment Share on other sites More sharing options...
Kirk Maldonado Posted January 3, 2003 Share Posted January 3, 2003 The person who pays the benefits issues the 1099-Rs. Conversely, if somebody else wants to issue the 1099-Rs, then they have to pay the benefits. Ask the rogue (rouge?) counsel who else is willing to pay the benefits. If somebody else is, then the plan will immediately generate all these surplus funds, because participants' benefits will be paid by somebody else. If you can talk him into that, you should be able to keep those funds for yourself! Kirk Maldonado Link to comment Share on other sites More sharing options...
Guest mab Posted January 3, 2003 Share Posted January 3, 2003 Kirk (or anyone else), That comment brings me to ask another question which is not multiemployer related but it is 1099-R related. There are some companies out there that do nothing but process distributions. When they process the distributions, they do not list the plan or the trust ID on the 1099-R, rather the company lists itself on the 1099-R as the payor because as you said, it is paying the benefits. It seems strange to me not to list the plan but then again, neither the plan nor the TPA is actually paying out the benefits, the company processing the distribution is doing this. This set-up seems to be permissible provided the plan is able to reconcile all of its records properly. Agree? Tx. Link to comment Share on other sites More sharing options...
david rigby Posted January 3, 2003 Share Posted January 3, 2003 That seems backwards to me. Are you referring to a company that processes checks? That sounds like an arrangement where the plan (or trustee) is subcontracting some administrative function. That does not (should not) mean they are the payor. Maybe this is "form over substance"? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
Guest mab Posted January 3, 2003 Share Posted January 3, 2003 I was taken by surprise by this today when I first started investigating my initial multiemployer question. I can now name of at least 3 companies operating in this manner, who shall remain nameless. This afternoon, I called one company and asked the person about this practice and he named two trust companies (he is not a trust company) operating exactly in this fashion. The trust companies do not act as trustees to the plans. The plan or trustee or TPA subcontract this administrative function to a "distribution company". The distribution company then issues the 1099-Rs upon receipt of the funds (usually from a fund company via authorization from the plan, trustee or tpa) and lists itself as the payor. It then provides the plan, trustee or tpa with an itemization of distributions processed. When I stated that this doesn't pass the "smell" test, he remarked that there was nothing illegal with the processing and there are no damages to any party associated with the activity. Link to comment Share on other sites More sharing options...
david rigby Posted January 3, 2003 Share Posted January 3, 2003 I hope that the plan, the trustee, and the check processor all have their own separate legal opinions on this. At the very best, looks like a recipe for confusion. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
JohnCheek Posted January 4, 2003 Share Posted January 4, 2003 Maybe I'm missing something, but this arrangement does not seem unusual. If a multiemployer plan has Bankers Trust, for example, issue the monthly pension checks, why shouldn't Bankers Trust also issue the 1099-R's, and why would it not use it's own EIN on the 1099-R? I see this all the time, and I see the same thing happening on 1099-DIV's when a bank is the disbursement agent for the company issuing the dividend. John Cheek CPA www.cpaSPAN.com Link to comment Share on other sites More sharing options...
mbozek Posted January 4, 2003 Share Posted January 4, 2003 I found this thread while watching the Jet game and have a question: does anyone read regs? Reg 1.3405-1T A-14 states for a mult er plan that the association or committee or group of representatives is the plan administrator. However, the P Admin may transfer the the duty to withhold to a payor by providing information to the payor. See E-2 of the regs. I dont have the time to see who is responsible for reporting the distribution as the Jets are up 17-0. I agree with J cheek- many pension plans transer the responsibility for reporting and withholding to a bank or other trustee who actually makes the payments. mjb Link to comment Share on other sites More sharing options...
Guest mab Posted January 6, 2003 Share Posted January 6, 2003 What are those and where can one find them??? And who has time for reading them when I can instead sit in the stands up in ex-Titletown and watch my team embarrass itself on national TV? Seriously, thanks for the input. I don't do a lot of multiemployer stuff and at least your answer puts to rest my initial thoughts in my first post regarding the erroneous position of the union's legal counsel. Link to comment Share on other sites More sharing options...
E as in ERISA Posted January 6, 2003 Share Posted January 6, 2003 I would think that this is becoming much more common for single employer plans. It was my understanding that most mutual funds won't cut check to individual participants. A plan can use these "fee-for-service" trust companies to cut the distributions. Then the plan doesn't have the cost of a full service bank trustee and it can avoid the issues associated with having the employer make the distributions. Link to comment Share on other sites More sharing options...
mbozek Posted January 6, 2003 Share Posted January 6, 2003 Mab: It could be worse. You could be a NY Giants fan. Talk about embarrassment. All Giant fans are in a state of depression. IRC 6047(d) provides that the plan admin is required to file reports including 1099-r for all distributions. But I guess the plan admin could provide the info to a third party trustee or payor who will prepare the reports as the agent for the plan admin. The IRS regs should be on line on the IRS web site but I have my own copy. There may also be an IRS publication on reporting and withholding of pension distributions (Circular E?) available on line. mjb Link to comment Share on other sites More sharing options...
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