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An ACP refund from a Roth account is not a qualified Roth distribution even if the participant is 59.5 and has had the Roth account at least 5 years. See 1.402A-1 Q&A 11, which refers you to a list in A-4 of §1.402(c)-2 for types of distributions that are not qualified Roth distributions, including ACP refunds in A-4 (c).

How does a government "acquire" a not-for-profit entity? Such entities have no owners, so you can't purchase one. Did the government buy the assets, or what happened? The other issue to consider is whether the nonprofit is now itself a governmental instrumentality. If the only member of the nonprofit is a governmental entity, there is a good chance that it is. In any event, if the nonprofit has somehow failed to become a governmental instrumentality, and is still an ERISA plan and subject to coverage rules, I'm not sure how you could possibly apply them on a controlled group basis, given that such rules do not apply to governmental plans. You would, of course, still have to apply the universal availability rules.

Peter, 1) Do you trust the government? 2) Do you think you can call "them" and get responsible answers to your questions? Ever try calling "IRS"? 3) The governments have done a great job with their own retirement plan liabilities. 4) Having to deal with government employees who get paid regardless of how good a job they do. 5) 6) 7) 8)........

OK; here it is: 5. Leased employee who becomes a common law employee of the recipient. In 4. above, we discuss the consequences of a common law employee becoming a leased employee. What if the change is in reverse, where a leased employee later is hired by the recipient as a common law employee. In that case, the employer will treat the “new” employee like any other employee for all purposes under the qualified plan rules, not just those listed in IRC §414(n)(3). Also, the employee’s service as a leased employee iscounted by the employer where service is a relevant consideration. See Notice 84-11, Q&A-8. 5.a. Participation in the plan. How the change to common law employee status affects plan participation depends on how the recipient’s plan deals with leased employees for eligibility purposes. If leased employees are excluded by classification, then the individual’s hiring as a common law employee will be treated like any other employment classification. If the classification as a leased employee was the only reason why the individual was not eligible, and the individual has satisfied all other eligibility requirements, the individual will become a participant immediately upon his or her being hired as a common law employee. Refer to Chapter 2 (Section IV, Part F) for more details on the entry date rules for employees who are previously excluded under a job classification. If the employee still must satisfy other eligibility conditions (e.g., the employee did not satisfy the year of service requirement as a leased employee), then those conditions would have to be satisfied first before the common law employee becomes a participant. If the plan does not exclude leased employees by classification, then, if the employee had met the plan’s eligibility conditions while a leased employee, the employee’s participation in the plan would continue uninterrupted after he or she becomes a common law employee of the recipient employer. 5.a.1) What if employee did not meet the one-year “substantially full-time” service requirement before becoming a common law employee.? Suppose at the time the individual becomes a common law employee of the recipient he or she has not performed services for the recipient as a leased employee on a substantially full-time basis for at least one year. In that case, the recipient was not required to treat the leased employee as an employee for the qualification requirements listed in IRC §414(n)(3) before the individual became a common law employee. Should that prior service be counted toward establishing eligibility for the recipient’s plan? This is not clear. If the individual’s brief service as a leased employee was on a substantially full-time basis, so that the individual would have been treated as a leased employee under IRC §414(n) had that service continued for a full year, then it would seem to be more reasonable to take that service into consideration, so as not to artificially delay participation in the plan. On the other hand, if, on an annual basis, the leased employee would not have met the substantially full-time test, then there is a stronger argument to disregard the period of service as a leased employee and treat the individual as a new employee as of the date they commence employment as a common law employee. We emphasize, however, that no clear guidance has been issued on this issue, and the plan fiduciary will have to make a reasonable and prudence determination of how the applicable circumstances affect the application of the plan's eligibility requirements. 5.a.2) Example. Xavier commences services with Corporation W on April 1, as a leased employee. Xavier performs services on a substantially full-time basis so that, if he performed such services for a 12-month period, he would be treated as a leased employee under IRC §414(n). On September 1, W hires Xavier as a common law employee, and Xavier is terminated as an employee of the leasing organization. Corporation W’s plan requires one year of service for eligibility purposes. Although not clear under §414(n), a reasonable interpretation of §414(n) is to treat Xavier’s “employment commencement date” for eligibility service purposes as April 1, not September 1. Thus, if Xavier completes at least 1,000 hours of service during the 12-month period measured from April 1 to the following March 31 (including hours credited for the five months as a leased employee), he would have credit for a year of service for eligibility purposes under W’s plan as of such date. So, Sal notes that it is not clear whether to go back to the earlier hire date; to quote: "We emphasize, however, that no clear guidance has been issued on this issue, and the plan fiduciary will have to make a reasonable and prudence determination of how the applicable circumstances affect the application of the plan's eligibility requirements." In an off line discussion with Derrin, he is convinced that the correct position is to give credit to the earlier date. He has given me some arguments for this and I will be studying it and parsing his explanation to see if it changes my mind. More to come.....

Good thought Bird on the verbage...I was trying to find a better way to say it and I like the "not applicable" as opposed to the "not needed" for the Plan year. After reading through what I sent to him from Sal's book (including the example), the attorney "agreed with" my analysis and understood my position. Whew! Thanks for all the input. I hope everyone has a safe, happy & healthy New Year!!!!