Leaderboard

If the trust is named as the bene of the plan, the trust needs to receive the payments. It isn't your concern what the trust says or does with the money once it is paid to them. That said, I wouldn't want to make the decision myself as to who to pay if the trust ceases to exist - that is the responsibility of a judge, with jurisdiction over the plan. The way in which I've resolved similar issues (where it is unclear to whom the payment(s) should be made is to "interplead" the payment(s) to a court - which is essentially "throwing your hands in the air and saying I (we) don't know who should get the money, you judge, decide). That protects the plan. You may think it is clear that the trust has but two beneficiaries - but are their contingent beneficiaires, alternate beneficiaries, per stirpes or pro-rata distributions to the heirs of the original beneficiairies and the like? Not decisions the plan/fiduciaries should be making....

The owner wants to delay his taxation as long as possible. The IRS (and by extension, those of us who are taxpayers) want him to pay taxes on the amounts that have previously been tax-deferred. It's time to buck up, and pay up.

If you are looking for Congressional intent for code section 3405, my quick answer is this: the tax deferral is intended to allow for protection of retirement income, so reaching normal retirement is an end point for that protection. Thereafter, Congress expects you to take taxable distributions. If you are not yet ready to retire, then you can roll over. But you cannot take more than your maximum 415 limit. No sympathy here for someone who has a guarantee of 100% of pay for life because they now have a taxable benefit.