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QVECs or DECs


Guest sborrow

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Guest sborrow

Background. QVECs (Qualified Voluntary Employee Contributions) or DECs (Deductible Employee Contributions) were authorized by ERTA '81 to permit employers to allow employees to make deductible IRA contributions to an employer's qualified plan. These arrangements were a hybrid because, for some purposes, the IRA rules apply and for others, such as joint and survivor annuity, the qualified plan rules apply. TRA '86 did not allow future contributions after 1986. The issue is are QVECs subject to the qualified plan required beginning date of the later of 70 1/2 or retirement or the IRA required beginning date of just 70 1/2. The only indication remotely offering a clue is a statement in Notice 82-13 that, except for owner-employees, distributions are not required to begin at 70 1/2 (remember that before TEFRA, there were no required minimum distributions from qualified plans except for owner-employees in a Keogh plan), potentially supporting the application of the qualified plan rule. Any thoughts?

[This message has been edited by sborrow (edited 09-04-98).]

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