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  2. I'd ask to see the Schedule SE's.
  3. Mike Preston

    401k spin-off

    The trustee only need invest in accordance with the trust documents. If the trust documents allow pooled funds then there is no need to physically separate the investments. Please provide a citation to back up what you mean by "not looked upon favorably". In my experience it is done without hesitation.
  4. Sorry, this is out of my league. This appears to be a government plan and government plans live mostly by their own rules, complicated by use of unique terminology, which among other things, prevents you from translating the government planspeak into information that might be useful for analysis. You need a professional, probably a lawyer, who is familiar with the NYCER plan to unravel this.
  5. I was just complimenting Lou S.
  6. Are you sure there is no actuarial increase?
  7. What is the procedure for an employer to remit federal taxes withheld from a 401(k) distribution during the year? Must the employer enroll with EFTPS and do it electronically or can a physical form be filed with the payment attached? We realize that Form 945 can be filed at the end of the year with the payment if the total amount withheld throughout the year is less than $2,500, but it's very likely that amount will be exceeded, so we'd like to pay the withheld amount from the current distribution at this time. Also, is there a deadline for when such a payment must be made? All help is greatly appreciated.
  8. Yesterday
  9. Plan document contains that language. Form W-4 exemption from withholding is not based on job location. Here is information from the IRS site:
  10. Does the document itself contain a complete definition of compensation to use when 3401(a) is selected on the AA? In particular, does the document include the following underlined language for the definition of 3401(a) compensation? (The following language is derived from IRS model language for the definition of compensation when the 3401(a) definition is selected.) Compensation means "...wages within the meaning of section 3401(a). However, any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed are disregarded for this purpose." The underlined language is required in the case of determining 415 compensation, so I suspect that it is also used by the document for contribution purposes as well. If it does contain the underlined language, then why is the participant claiming to be exempt from withholding? If it is because of the nature or location of the employment or service performed (such as, for example, the exception for agricultural labor in section 3401(a)(2)) , then you would disregard the exemption from withholding and treat the entire reported amount as 3401(a) compensation, i.e., even if no federal tax withholding is required for that particular wage earner. In other words, it would be plan compensation. If the document doesn't define 3401(a) compensation (for contribution purposes) as described above, then you may need to follow up with the document provider as to whether the amount in Box 14 constitutes the definition of 3401(a) compensation under that particular document for purposes of contributions (as opposed to 415 purposes). For 415 purposes, the document should also state that you need to include amounts that would be included in 3401(a) wages but for an election under IRC section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)), and many plan documents will therefore automatically include such amounts within the meaning of 3401(a) compensation for contribution purposes (subject to an AA option to exclude such amounts). Thus, the entire definition of 3401(a) compensation in the document needs to be examined to determine what amount to use for a particular participant for a plan that "uses 3401(a) compensation."
  11. We filed a number of these and never changed the original terms of the loan, even if the interest rate went down and was more favorable to the participant. They were all accepted.
  12. FPGuy

    Notice of Class Action Settlement

    Very interesting discussion of a grey issue, but as to the specifics, notices were sent out to plans that filed a 5500 and had a connection to BNY. In many cases this would be that the plan was on a Pershing platform in whole or part, Pershing being a division of BNY. As noted, issue involved overcharges in respect of ADRs, a list of which can be found on the referenced website These are all individual securities. The settlement does not involve ADRs held within mutual funds, ETFs or collective funds. Also, a small correction to the facts stipulated in the initiating question: doing nothing (i.e. not responding) precludes the plan from receiving a settlement, but does not prevent the plan from being bound by the settlement terms. In other words, if the plan wishes to pursue a separate action, do it now or be bound by the settlement terms.
  13. Cardscrazy

    Hardship Distribution / Medical Debt

    If the employee were to file bankruptcy wouldn't that allow her to meet the hardship burden?
  14. Why would you change the terms of the loan if the participant signed the loan agreement at 6.5%.
  15. Having a discussion with a colleague regarding minimum participation under IRC Section 401(a)(26), the IRS memo-induced 0.5% accrual rate threshold and cash balance plans that use actual rate of return interest crediting rates (ROR ICR). HCE with comp of $260k and $13k contribution credit (5% of pay) in an ROR ICR plan has a 0.39% normal accrual rate due to negative return in 2018 and zero percent projected interest, causing the plan to fail 401(a)(26) if one applied the IRS memo as if it were law or regulation (which it is not), whereas I argue that in what facts and circumstances universe (which is the law and regulation) is a 5% annual credit not meaningful, and why should a one-year interest rate hiccup/blip turn a very meaningful credit into one that is not? By that standard, every ROR ICR plan that does not have a contribution credit in excess of 6% for 40% or 50 employees would otherwise fail 401(a)(26) every year they experienced an investment loss and would be required to increase contribution credits. I find that ludicrous, and it ultimately creates a de facto (albeit indirect) interest credit floor so to speak, which you could not do directly because of the market ICR rules. So ROR is good, employee wins, ROR is bad, employee still wins - yes, that's kind of the DB premise, but it's not the market rate premise. Thoughts from those with experience on ROR ICR plans and dealings with IRS on the issue, including the 0.5% accrual rate line in the sand. Thanks
  16. I don't think Lou needs a cite in this case. If someone wants to claim the terminated over 55 exception applies to this plan and not the original plan the burden is 100% on them to prove it. The plain reading of the rules gives no reason to think that exception "sticks" to the money.
  17. My apologies for interrupting a previous forum on another topic line. I am currently trying to find a resolution to a current problem. During the month of August 2018 my father passed away ,he was collecting his social security benefits as well as his full pension of which all began during 2003 and of course ended during his death of August 2018. He was employed by the city of New York as a New York City Hospital Police Officer. His retirement pension is through NYCER, "New York City Employee Retirement. My parents married in 1971 divorced in 2008. During August 2018 my mother was awarded a one time death benefit through my fathers pension retirement organization NYCER. Thereafter, she was informed she would receive my fathers annuity funds and informed my mother that she was listed as his primary and only benificuary to collect his pension. My mother was directed to complete some documents and to submit a death certificate. Thereafter, she was notified she was not elegiable to collect my fathers pension nor was she entitled to my fathers remaining annuity funds because there divorced. NYCER is requesting a DRO of which my mother does not have. There divorce was an uncontested divorce drawn up in the state of Florida by an attorney or my father who failed to include any and all of my fathers financial information regarding my fathers pension or his social security benefits he was collecting but remember my fathers pension is from New York City of which my mother resides in. Can any thing be done about this?? At this present time NYCER continues to send letters regarding my fathers Annuity funds which has not been disbursed accordingly and there is NO administrator of his estate. There are three surviving children including myself. Please advise. Thank you.
  18. Bug on my window

    401k spin-off

    The trustee must recognize that the two pools of money are separate, so they can make the annual ERISA statements each year for each separate pool. As a side note, I understand that splitting a plan solely to avoid the audit requirement is not looked upon favorably. Is there another reason/division for the split? Some natural division between two groups that are getting different benefits?
  19. Looking for some thoughts here since the rules aren't 100% definitive. If a plan is being spun-off into 2 separate plans and the existing one eventually terminating, could the spun off plans be considered "new" for purposes of filing for a determination letter?
  20. Maybe someone can explain better than I'm able to, but I always struggle to describe how this is different from an employer using a staffing firm/PEO model in which the employer terminates all its employees, then "leases" them back from the PEO the next day. I understand the PEO claims to be a joint employer or co-employer, particularly for benefits purposes, but if I recall IRS has also said it doesn't recognize any such status. In any event, couldn't the asset seller claim the same status for a few weeks? For what it's worth, I've had (buyer) clients lease employees for a week or two after an asset sale and they generally are okay with the seller's 401(k) plan staying active during the leasing period. I advise of the potential risks involved, but with the seller still issuing W-2s, the short timeframe involved, the presence of an acquisition, and almost always the impending termination of the seller's plan, I just don't see it as a large practical risk. Many of the sellers' plans are under 100 participants and therefore not large enough for an audit, so mileage may vary.
  21. We did find out this much. The participant could roll the money to an IRA now, and then take the withdrawal as a first time home buyer from the IRA, penalty free. But given the logistics of getting the rollover done and then making the withdrawal, she would practically have reached age 59.5 anyway..... The other idea being kicked around is to see if some kind of letter of guarantee could be provided to the lender or the seller showing that as of x date in March, she can access the funds for the down payment....
  22. NYCER stands for " New York City Employees Retirement" my father was employed by the city, he was a New York City Hospital Police Officer and paid his union dues to Local Teamster 237. My parents married in 1971 divorced in 2008 neither remarried. My father began collecting his retirement in 2002-03 until he recently passed in August of 2018. The one time death benefits that my mother received came from NYCER my fathers employers retirement funds. NYCER has my mother listed as primary and only benificary as surviving spouse but was informed she was not entitled to his pension nor was she entitled to the remaining annuity funds in the amount of $7,000.00 of which is still sitting in his account. I hope I answered your questions and hope you can assist or guide us in this delicate matter. Thank you.
  23. Relatively simple situation. I have a separate interest qdro with the following facts: * the qdro was issued at the participant's normal retirement date (assume exactly, it was close, not sure if a month off). * the alternate payee chose to commence benefits at the participant's normal retirement date (life annuity - no subsidy received in the traditional sense as far as early retirement is usually considered) * the participant chose to continue working despite suspension of benefits. No actuarial increase is provided (benefit is frozen) * said participant is now past RMD. The participant is looking to start benefits at age 74, and will receive the appropriate 401(a)(9) increase for starting past rmd * During the time since NRD, the alternate payee has received benefits continuously, but the deferral period will reflect actuarially equivalent benefits for the participant only for the period after what would've been RBD if said participant had not been active Question: since the plan is paying benefits to the alternate payee that it would not have paid without the issuance of the QDRO, has the participant forced himself inadvertently into paying for the alternate payee's benefit during the period between NRD and what would've been RBD via reduction of his benefit once he starts. That is, instead of receiving his share of the benefit increased for the period past typical RBD, is he required to receive that less an actuarial equivalent amount for benefits paid to the alternate payee? This is a variation on a participant footing the bill for a qdro that allows the alt payee to get subsidized early retirement when a participant doesn't start, but instead of paying for a subsidy, the subsidy is seemingly a benefit reduction (negative subsidy) that he caused himself by continuing to work after NRD. The number of years we're talking about is about 6 1/2 to 7, so the adjustment would be significant.
  24. Can you clarify why you think this would satisfy the common law employee test? If seller is leasing all the employees who are doing the work for buyer (so all managers, supervisors etc are part of leasing group) and buyer is simply "paying" the seller for the work (no payroll, no other benefits, no real direction etc) - just a lump sum for all services through some sort of services agreement. This would appear to not satisfy the common law employee test. Is the risk the fact that the common law employee test is so subjective?
  25. This is my first time on this site and I am not sure if I am actually in the right place to start a new forum with regards to QDRO in divorce cases and the disbursement of ones pension. My question is as followed: My parents were married for over 30+ yrs and are now divorced. My father left my mother as his primary and only benificuary for his pension during the early 1970's when he completed all documents per his retirement. He recently passed and my mother was awarded the one time death benefit and is currently collecting my father's Social Security benefit's but she was not awarded his pension nor his annuities. NYCER requested a QDRO of which there is none. In fact, I obtained there divorce decree and realized that upon there divorce my father did not complete an income work sheet which he is obligated to list his assets such as his Social Security Income and his pension as well as his property as a homeowner so that the judge would see what each individual is entitled to after they divorce. According to the laws of Florida of which my father had relocated to from NYC during his retirement, was supposed to list all of his assets/financial listing. In any event, there divorce was an uncontested divorce 2008 and the judge hand written, "Each parties shall lawfully retain all property real and personal that is currently in their possession" there is nothing stipulating anything as to his pension and if my mother should not receive it or not or am I in denial in what I am reading? However, prior to my fathers passing he stated, " He never changed his benificuary and my mother would receive everything because he left her as the primary and only benificuary? Please advise, Thank you.
  26. Thanks, Lou S. Of course the safest and fastest thing to do is to tell the participant that she must wait until the magic day in March when she turns 59.5. That's easy. But the colleague who asked if the participant could somehow be construed to meet an exception deserved to have her idea explored, so that's what we are doing.
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