Jerry Erisa Posted February 25, 2015 Share Posted February 25, 2015 a former employee's beneficiary? Has anyone seen this in practice? While we always wish to accommodate legitimate client wishes, this proposed amendment request borders, if not leaps over, into "non reliance" territory!? All of a sudden, we could be (?) accepting de-facto "participants" by virtue that their inward rollover money could be (?) in the plan, regardless if they never worked for the Plan Sponsor. Thank you for your thoughts and comments! Link to comment Share on other sites More sharing options...
QDROphile Posted February 25, 2015 Share Posted February 25, 2015 Does the plan have self esteem problems? Employers have plans for the benefit of employees, and former employees probably only because ERISA requires it. You have identified some reasons not to go beyond the convention of allowing rollovers into the plan only by employees at the time of rollover. So don't. Link to comment Share on other sites More sharing options...
david rigby Posted February 25, 2015 Share Posted February 25, 2015 I might phrase it a bit more softly, but the conclusion "don't" is correct. While you might be able to construct the suggested rollover, it's probably not advisable. - The plan no longer has a relationship to the recipient once a complete distribution has been made (assuming no errors, etc.) - Since the plan is intended for the "employees and their beneficiaries" (ERISA section 2), the beneficiary in the original post may not have a relationship that permits any participation in the plan. 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...
Jerry Erisa Posted February 25, 2015 Author Share Posted February 25, 2015 Ok,... ....... now the request is to allow, "participants who are former employees, and these (former employee) participants' beneficiaries.. to have an inward rollover INTO the qualified plan. But, I am still concerned as this does not appear to be "pre-approved" language. If it is not pre-approved language, I may be losing "reliance". Link to comment Share on other sites More sharing options...
QDROphile Posted February 25, 2015 Share Posted February 25, 2015 Another reason for "don't" david rigby 1 Link to comment Share on other sites More sharing options...
Jerry Erisa Posted February 25, 2015 Author Share Posted February 25, 2015 Thank you QDROphile and David Rigby for your reasoned responses! For the Site Administrators/site advertisers, this is why I check "Benefits Link" every morning, before starting work. Thanks!! Jerry Link to comment Share on other sites More sharing options...
BG5150 Posted February 26, 2015 Share Posted February 26, 2015 Why would a trustee want to be responsible for the assets of non/former employees? (Seems to me like somebody wants/needs more assets in the plan) Appleby 1 QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
mbozek Posted February 26, 2015 Share Posted February 26, 2015 Since there is no requirement that a qualified plan must accept rollovers into the plan, the plan has discretion as to whether it will accept rollovers and from which class of persons. A plan is not required to accept a rollover from a former employee who has not taken a distribution of the benefits from the plan or from that employee's beneficiary. Appleby 1 mjb Link to comment Share on other sites More sharing options...
Appleby Posted March 3, 2015 Share Posted March 3, 2015 Nonspouse beneficiaries cannot rollover assets into a qualified plan. Only a spouse beneficiary can, and in those cases, it would be to the spouse's own account under a plan where he/she is a participant. ( I hope I understood the question. If not, please let me know) Life and Death Planning for Retirement Benefits by Natalie B. Choatehttps://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/ www.DeniseAppleby.com Link to comment Share on other sites More sharing options...
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