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How can this not be accurate? [rolls eyes so hard]

Not a lawyer, but... The owner of the sponsor is not acting as the sponsor. The owner of the sponsor is a plan participant with respect to those assets held by the plan for the benefit of the owner of the sponsor. To the extent that the owner of the sponsor is making decisions about the disposition of plan assets, the owner of the sponsor is acting as the plan administrator and is subject to fiduciary standards. This is not at all the same as the owner of the sponsor having a personal investment account that includes an insurance policy. In this instance, the insurance policy is owned by the plan, and it is only through operation of the plan, per its provisions, that the value of the policy can be paid to the owner of the sponsor.

Forget for a moment that these are life insurance policies and think of them as self-directed investments. Participants (in theory) elected to purchase these investments with some of their other account money. They can choose to move the current value back to the other investments, or they can leave it where it is. Assuming the policies were set up properly in the first place (a fairly big assumption, given what all of us have seen screwed up by life insurance agents), then they are owned by the plan, and surrendering the policy(ies) just means moving money from one part of the plan to another. You're not moving funds "to" the plan, you are moving funds "within" the plan. Hence no taxable event. In a perfect world, or just a reasonable one, the insurance policies would be tracked as "PS" or whatever kind of money they were originally bought with. Unfortunately, some administrators choose to show premiums as "expenses" of the plan, which then leads them to ignore the values of the policies for asset reporting purposes. Possibly the reason for some of the confusion about moving "to" or "within" the plan.

Count me amongst those who say that the beneficiary is not entitled to any portion of the 2016 RMD other than his/her share of the estate proceeds. Further, if there is a 2017 RMD in this circumstance that is also payable solely to the estate. However, if the death obliterates the requirement to distribute a 2017 RMD to the participant and replaces that requirement with specific timing rules related to the beneficiary then those distributions would of course be payable to the beneficiary. If it were my client I'd pull the a9 regs and see if there isn't clear guidance on this issue. And, of course, see whether the document provisions provide a bit of clarity.

I think we all agree that the unpaid 2017 RMD has to be paid to the death beneficiary and I don't see how any unpaid prior year RMDs rise to the level of a liability of the plan to the estate. I'm pretty certain that the plan/contract says "pay everything left at my death to the death beneficiary" without any exception for perceived liabilities.

This is important: the drafter need those documents, and (hopefully) creates a DRO such that the PA does not.

Maybe he's just being nice, and the actuarial increase by the time he must start RMD payment will give her a higher monthly payment. Of course, he could jump off the Saginaw bridge, and then she'll get nothing. Wouldn't THAT show her. And I apologize for my strange sense of humor - some people don't get it, and may be offended by such a joke.

"They would like to terminate the policies..." Can we all agree that if it is a pension plan, then the plan administrator of the plan,acting in a fiduciary capacity, gets to make all such decisions, and the wishes of the individual participants only carry weight to the extent that those wishes are supported by the provisions of the plan? The participants do not own their accounts or the assets backing their benefits, so the participants don't get to say "Just give me my money!" unless they can point to a plan provision saying that they can do that. If the participants have the authority to direct the investment of their accounts, they can probably have the policies cashed in and those proceeds included in their account balances.

3) the participant can die.

The plan OWNS the policies. The plan get's the cash value if the policies are terminated. Now, if you want to get the policies out of the plan, there are two ways - 1) through an in-kind distribution ALLOWABLE under the plan (in-service, termination, or whatever is ALLOWED under the terms of the plan); or 2) the insured participants can BUY the policies from the plan - at basically the cash surrender value (which they would only do if they wanted to keep the insurance in force (as the cost of buying the policy would be exactly equal to the cash they would get upon terminating the insurance). The record-keeper is correct.

I know my parents always told me that they were "divorce-proof," since they had an agreement that whoever ASKED for the divorce had to take 100% custody of us kids!

That really is a question for your attorney. I will say, in my experience, the "norm" is that gains and losses are included - but people may agree to whatever terms they wish to.

It has to be consistent with principles of math. When the loan was offset, part of that offset represented a return on the Roth basis and the other part represents earnings (which were not part of a qualified distribution). The only way the Roth Contribution basis would be increased is through a Roth Deferral (or conversion or whatever). Loans really don't change any basis. Good Luck!

All one needs do is show a list of company stock cases to the FIDUCIARY - and tell them that whether plaintiffs were successful or not 1) mounting a defense is incredibly expensive; and 2) they are PERSONALLY liable as a FIDUCIARY. The next question invariably is "how do I resign as a fiduciary?"....

You could usually tell how experienced the agent was by the things they asked questions about!