Leaderboard

Without doing any digging, I believe the the answer is no. For non-spouse beneficiaries, you can't treat it as your own IRA and roll money into or out of it. However, this is from memory, and I haven't looked for citations or back-up. My brain has pretty much turned to Swiss Cheese at this point...

It's pretty clear under Section 6.02(2), and Appendix A, .01(3) that other reasonable corrections are permitted. But of course, facts and circumstances...

An arrangement in which one service provider absorbs or embeds another service provider’s fee might be an exempt prohibited transaction if: each service provider discloses to each responsible plan fiduciary all details of the arrangement, at least as required under ERISA’s 408b-2 rule [29 C.F.R. § 2550.408b-2 https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-F/part-2550/section-2550.408b-2]; each service provider discloses the further information any responsible plan fiduciary requests; each service provider discloses the further information needed for each responsible plan fiduciary’s approval to be prudently informed; each responsible plan fiduciary is independent of all service providers involved in the arrangement; none of the service providers involved in the arrangement advises any plan fiduciary about whether to approve the arrangement; each responsible plan fiduciary approves the arrangement as obeying the plan’s governing documents, providing each service provider no more than reasonable compensation, not putting the plan in a disadvantageous arrangement, and otherwise prudently pursuing the plan’s exclusive purpose. A responsible plan fiduciary would want its lawyer’s advice about how thoroughly and carefully a proposed arrangement meets those and other conditions. A service provider evaluating whether it is willing to participate in such an arrangement would want its lawyer’s advice about whether the proposed arrangement meets all conditions of ERISA § 408(b)(2) and each further prohibited-transaction exemption the service provider wants to rely on.

A court likely would find not preempted a State’s general sales tax that applies widely with no particular hook to employee benefits. For one exposition of that idea, read https://cases.justia.com/federal/appellate-courts/ca6/12-2264/12-2264-2016-07-01.pdf?ts=1467388843. Unless a particular precedent of the U.S. Supreme Court (or at least the Federal circuit in which the matter would litigate) fits and controls your client’s situation, there usually are arguments that point in another direction. And even if a precedent controls, one might argue that the precedent is incorrect. If a big-enough amount of the would-be tax calls for the analysis, the plan’s fiduciary would—perhaps with your law firm’s advice—estimate the probability-discounted refund the plan could win against the estimated expenses of litigating the plan’s refund claim. Even if the State’s law provides an award on a showing that the government’s position was not merely incorrect but also lacked a good-faith argument, a fiduciary likely should run a cost-benefit analysis assuming no order for the government to reimburse any portion of the taxpayer’s attorneys’ fees. Even if the circumstances otherwise call for cost-benefit analysis about whether to assert the non-application of the tax, your client might want first your advice about whether the sales tax is imposed on the seller, or on the buyer (with a requirement for the seller to collect and pay over the tax). If the sales tax is imposed on the buyer, there might be little or nothing for that person to litigate.

402(g) excess don't have any withholding I believe as the excess is taxable in the prior year.