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For thirteen kinds of distributions added or changed by SECURE 2019 and 2022, here’s my table to show whether: the specified kind of distribution is an exception from a provision that restrains a distribution until the participant’s severance-from-employment or age 59½; a plan’s administrator may rely on a claimant’s written certification that the claim meets conditions for the specified kind of distribution; the specified kind of distribution is an exception from § 72(t)(1)’s additional income tax on a too-early distribution; a distributee of the specified kind of distribution may repay the amount as a rollover contribution to an eligible retirement plan. Distributions added or changed by SECURE 2019 and 2022 I.R.C. § Kind of distribution (from an individual-account eligible retirement plan) Early?[1] Rely?[2] Excuse?[3] Repay?[4] Applies[5] 72(t)(H) Qualified birth or adoption distribution. Yes Yes Yes Yes 2020 72(t)(I) Emergency personal expense distribution Yes Yes Yes Yes 2024 72(t)(J) From a § 402A(e) emergency savings account Yes Yes Yes No 2024 72(t)(2)(K) Eligible distribution to domestic abuse victim Yes Yes Yes Yes 2024 72(t)(2)(L) Terminal illness No -- Yes Yes 2023 [6] 72(t)(2)(M) Qualified disaster recovery distribution Yes No Yes Yes 2021 [7] 72(t)(2)(N) Qualified long term care distribution No -- Yes No 2026 [8] 72(t)(10) Qualified public safety employee age 50 or 25 years No -- Yes No 2007 72(t)(11) Qualified disaster recovery distribution Yes No Yes Yes 2021 [9] 139C Qualified first responder retirement payments (disability-related) No -- No [10] No 2027 401(a)(39) Qualified long term care distribution No -- Yes No 2026 [11] 401(k)(14)(C) Hardship distribution (certification) Yes Yes No No 2023 402(l)(5)(A) Governmental plan payment for safety officer’s health insurance No -- Yes No 2023 [12] 403(b) Hardship distribution (certification) Yes Yes No No 2024 457(d)(4) Unforeseeable-emergency distribution (certification) Yes Yes No No 2023 2022 Dec. 29 © Guidance Publishers NOT tax or legal advice [1] This column describes whether the specified kind of distribution is an exception from a provision that restrains a distribution until the participant’s severance-from-employment or age 59½. [2] This column describes whether a plan’s administrator may rely on a claimant’s written “certification” that the claim meets conditions for the specified kind of distribution. [3] This column describes whether the specified kind of distribution is an exception from § 72(t)(1)’s additional income tax on a too-early distribution. [4] This column describes whether a distributee of the specified kind of distribution may repay the amount as a rollover contribution to an eligible retirement plan. [5] A note about when a provision first applies assumes all relevant plan, limitation, and tax years are the calendar year. [6] Internal Revenue Code of 1986 § 72(t)(2)(L) applies to a distribution made after December 29, 2022. [7] The changes apply regarding disasters with incident periods that began on or after January 26, 2021. [8] The change applies to distributions made after December 29, 2025. [9] The changes apply regarding disasters with incident periods that began on or after January 26, 2021. [10] Internal Revenue Code of 1986 § 139C provides an exclusion from gross income, which could affect the income subject to a § 72(t)(1) tax. [11] The change applies to distributions made after December 29, 2025. [12] The change applies to distributions made after December 29, 2022. Distributions added or changed by SECURE 2019 and 2022.pdf

A Mexican magician was going through his routine, card tricks and pulling rabbits out of the hat, etc. His last act, was one in which he promised to vanish in front of everyone! All props were moved, there he was standing all alone in the middle of the stage. He claimed this trick was as easy as 1 - 2 -3 No smoke no mirrors. The audience tensed in anticipation. He began "UNO" the crowd leaned forward The magician staring at the audience, in a quite dramatic tone announced "DOS" A hush filled the auditorium. It was now all very quiet and still. All were on the edge of their seats Suddenly the magician disappeared without a ......."TRES".

Boo! Hissss! Absolutely awful! Tom, nice to see your return. Hope all is well.

for FYE everything gets zeroed out. In other words, if there is no plan there is no assets/liability on the books. You can get there with a settlement accounting (the clean by-the-book approach) or you just solve for whatever is missing to get you to zero (my preferred approach since zero is a zero). Whatever is missing will be the additional expense (P&L charge) for the period.

Peter, you asked: How much does a summary plan description explain about how coverage under an unrelated employer’s plan affects coverage under the plan the SPD explains? Some, but not all plans, highlight the issue of disqualifying coverage per (b)(7) (Medicare) or (c)(1)(A)(ii) (other disqualifying coverage). Where they offer that information, most deliver it via the enrollment materials, not the SPD. or SBC. When first adding HSA-capable coverage, I've seen plan sponsors highlight that in the SMM. And how much does a summary plan description explain about the potential tax treatments of rights and features under or related to the plan the SPD explains, and how coverage under an unrelated employer’s plan could affect the tax treatments? Typically, nothing is included. The best enrollment systems ask if the individual is enrolled in Medicare or if the worker is enrolled in disqualifying coverage. How much does a summary plan description explain about a participant’s need to coordinate one’s elections with one’s spouse’s elections? Depends. Some have opt out provisions, surcharges, etc. Others encourage the worker to coordinate elections between the two employer-sponsored plans. Where an employer-sponsored plan requires a dramatically higher employee contribution to add a spouse or other dependents to employee-only coverage, there is often a separate description – because the plan sponsor's goal of such a design is to discourage enrollment of a spouse and/or family members. (and sometimes, the employee as well). How much do SPDs explain? My experience is many SPDs attempt to do too much, add too much detail, and end up where "summary" is a misnomer - attempting to serve not only as a required disclosure but also as a marketing and enrollment guide. Wrong answer. My experience is that the SPD should always be bare bones, solely focused on the mandated disclosure compliance requirements. How much should SPDs explain? Same as above. Any other explanation should be delivered as part of the enrollment process, or when initially added, the SMM. What’s practical? What’s impractical? As you know, a SPD must be written in a manner calculated to be understood by the average plan participant and must be sufficiently comprehensive to inform the participant of his or her rights and obligations under the plan. When it comes to today's health plans, many times "summary" and "comprehensive" are mutually exclusive. And, similarly, detailed disclosures can overwhelm the "average" plan participant. So, I have long argued that SPD’s should be returned to their original purpose under ERISA - to notify the individual of the existence of a plan, who is eligible, when and how to enroll, vesting, etc. But should a summary plan description for a plan that is or allows high-deductible health coverage explain that having no health coverage beyond high-deductible coverage is a condition for the desired tax treatment of a Health Savings Account? Actually, there are a number of different coverage options that are not-disqualifying coverage. But, yes, when the individual is defaulted into the cafeteria plan HSA contribution or when they voluntarily elect a HSA contribution, 21st Century enrollment systems should pause the election process and require the worker to confirm that they (or their spouse, or a parent) do not have disqualifying coverage. Most enrollment systems preclude electing both HSA-capable coverage and a general Health FSA. Similarly, where the individual elects HSA-capable family coverage, and the individual is covering an adult child and a spouse, the enrollment system should confirm the HSA contribution limits – sharing the family contribution with the spouse, the potential for an adult child who is not a tax dependent to fully fund up to the family maximum in their own HSA, etc. And what about other interactions? The HDHP-HSA relation is not the only one for which a participant’s spouse’s choices (whether under the same employer’s plans, or under another employer’s plans) affect a participant’s choices or other rights. The real challenge here is that most workers don’t read anything we provide. Similarly, some surveys suggest that a majority of workers spend only 15 minutes or less at annual enrollment - where many allow the existing elections to default into the new year. While recognizing other communications, should information of this kind also be explained in some plan’s summary plan description? No. Personally, I believe the SPD is the wrong vehicle for this purpose. Here's why: (1) The SPD need not be issued in time for a new hire to make their initial benefit elections - my understanding is that new employees must receive a copy of the current Summary Plan Description (with any SMMs) within 90 days after becoming covered by the plan. (2) The SPD must be updated only once every 5 years (sometimes 10 years), (3) The SPD is often 20 - 40 - 80 pages long, and (4) The health and welfare SPDs must be provided according to 20 year old rules, often paper versions, and, as a result, they are often difficult to search or fail to ask/answer the question you have, and/or fail to prompt you to ask a question.

What vesting schedule do they want in the surviving plan? Why not use that one and follow the change of vesting schedule rules for anyone who the surviving vesting schedule isn't better in all years?

I am going to speculate here, but I think they would still get the deduction for the contribution, so it would still have the effect of reducing their net earned income for pension purposes. However on their tax return, the fact that the contribution is included in current income would have the effect of cancelling out the deduction. It would be like if they made a contribution and took a distribution in the same year. Or more on point, if they made a contribution and did an in-plan Roth conversion.

Roth employer contributions were made effective as of the date of enactment of SECURE 2.0 - so a plan could have allowed them for 2022. I'm sure somebody, somewhere out there took advantage of it in the 2 days between the passage of SECURE 2.0 and the end of the year. That person presumably has an income tax return due in about 2 and a half months from now - moreover, their employer has to get them a W-2 and/or a 1099 within the next few days - and there is no guidance on how those contributions should be reported. I really can't blame the IRS on this, given the timing of the law. But it does make the reporting question kind of urgent.

That someone was “the Senate and House of Representatives of the United States of America in Congress assembled[.]” More than 22 years ago, Congress set the general principle that a signature is not denied legal effect because it was made by electronic means. “[A] signature, contract, or other record relating to” a transaction in or affecting interstate or foreign commerce “may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and a contract relating to such [a] transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.” Electronic Signatures in Global and National Commerce Act, Public Law No. 106–229 (June 30, 2000), 114 Statutes at Large 464-476 (2000), unofficially compiled as 15 United States Code §§ 7001-7006, at its § 101(a), § 7001(a). E-SIGN Act.pdf

Brian, I'm impressed and not impressed. Basically, all I've seen so far from ChatGPT is intelligent cutting and pasting of what is out on the internet. Granted, it's a real achievement for it to figure out what information is relevant to the question and to scrape it from the internet and cut and paste it into an intelligible answer, but this is newsletter type stuff, not an actual solution to a hard problem. I read the NY Times article on ChatGpt a week ago and the example that really struck me was the algebra question. The NY Times article linked to a post on Twitter: "A line parallel to y = 4x + 6 passes through (5, 10). What is the y-coordinate of the point where this line crosses the y-axis?" Chat GPT begins by explaining the problem and that we need to find a parallel line and do some algebra, about as well as a middle school math teacher at the chalkboard, but then boldly spits out a humorously wrong answer. ChatGPT is just regurgitating, cleverly to be sure, the stuff it scrapes off the internet. Try asking it one of the more difficult questions that you have received on BenefitsLink over the last year and see what you get.