Even though it doesn't make sense to do this, can't a plan allow in-service distributions prior to age 59 1/2?

Participant filed chapter 7 bankruptcy early in 2009, so his attorney advised him to stop making payments on his plan loan. We know that we need to report this as a taxable distribution. The participant wants to know when he can take out a new loan. I do realize that he may not be "credit worthy", but besides that, what other restrictions do we need to consider? If the plan only allows one outstanding loan, does this mean that he cannot ever get another loan?

In case you were following the Continental Airlines case, where several pilots allegedly (?) created sham divorces so that a QDRO could be used to get at qualified plan money, it appears the judge has said "none of your business" to the company.

http://www.chron.com/disp/story.mpl/business/6675081.html

shareholder took out a loan in December 2007 for $50,000.

In November 2008 he took out another $25,000 loan.

Plan does not allow for inservice distributions.

The employer has been self-administering this plan.

Their CPA prepares the 5500.

The November 2008 loan is in excess of allowable amount and so is a prohibited transaction and a deemed distribution for 2008.

The shareholder is making payments on the $50,000 loan and is current on that.

He has not made sufficient payments on the second loan.

He will repay the second loan before the end of 2009, with interest, which will cure the prohibited transaction.

Under the Sec. 72 regs, is the second loan deemed again in 2009 because it was unpaid on January 1st?

Thanks.

Can funds from a SIMPLE 401(k) be rolled over into a SIMPLE IRA?

The following questions was previously posted:

In information published by the DOL, it seems that the payment of investment advisory fees with plan assets is o.k. However, what if a participant goes out on his own, hires an investment advisor to assist with his investments in his 401(k)? This plan is a participant directed 401(k) where all employees use the same 21 funds. The employee feels overwhelmed and has hired a personal investment advisor to review his 401(k) account and provide investment advice for a fee. All plan participants have this same opportunity to use an outside investment advisor. Can the participant ask that the fees associated with this be paid from his account balance? In other words, could the investment advisor fees be paid from his account when this is done on an individual basis, and not an employer initiated/plan basis?

I am now investigating the same scenario and wonder if anyone can provide any comments, guidance, authority, etc.

Any suggestions on what to charge a single employer DB client for the PPA amendment? DC client?

Thanks.

My annual COLA & Rollover chart is attached in pdf format.

• It may be freely distributed within your organization. For additional permissions please contact me.
  

• Laminated versions of this and other helpful retirement related charts are available at Reference Guides
  

Note. This chart includes the correct 2010 HSA limits.

COLA_RO_2010.pdf

Back before I was 21 and eligible for my company 401k, my father helped me open a small IRA. I got statements on it for a while, but nothing for a while and recently I remembered it and decided I need to track it down and figure out what to do with it. I called the company it was with and they couldn't find anything under my name or SSN. Could they have just closed it if I hadn't done anything on it for many years?

I am looking for the best company to have my IRA ROTH with. I am currently with Ameriprise but I feel they are taking too much of my investments. Can anyone help?

I'm taking over a Defined Benefit-Profit Sharing Plan combo. Last amended 2003.

The defined benefit plan document says "If this is a paired plan the eligibility requirements must be the same." You guessed it, they aren't. DB is six months no hours and the PS is one year with 1,000 hours. Also one is a standardized plan and one is non standardized. Contributions have been under the 25% limit.

I've looked in Sal's book, but can not identify anything on point. There is a document issue, however is there a statutory issue? Also will there need to be a submission under EPCRS, lower the eligibility requirements for the PS plan and make contributions for anyone omitted?

What ERISA obligation/requirement, if any, is there for a multiemployer plan to provide annual (or other) estimates of withdrawal liability to employers?

I'm reviewing an employment contract for an executive of a private company. Among other things, the contact provides that within 60 days of a change in control, the executive may voluntarily resign and would be entitled to a severance payment equal to one year's salary payable in a lump sum within 14 days of separation. At the company's request, however, the executive would be required to continue working for 6 months before any severance would be paid.

While I don't think this qualified for any 409A exemption, I think it complies with 409A. Despite the reference to a change in control, the real trigger seems to be separation from service and the payment is due within 90 days of separation.

Am I missing anything?

Thank you.

Aaron

Employment contract provides for (i) 3 years of severance pay upon termination for any reason (to be paid monthly beginning with the month following separation) and (ii) a 3-year noncompete provision. However, the employer has the option upon termination to waive the 3-year noncompete, in which case no severance is owed.

As I see it, the severance arrangement does not qualify for any 409A exemption. However, it does seem to comply with 409A in that it is payable upon separation and according to a fixed schedule. I also don't see any issue with the employer's right to cancel the severance by waiving the noncompete provision, however I'm not sure I've considered every angle.

Does anyone have any thoughts or differing views?

Thank you.

Aaron

There are so many detailed questions on this forum, I wish there was a thread for 'bone headed' questions that I should know the answer to already.

An employer failed to restart deferrals following an employee's six month hardship 'suspension.' The employee still has a valid deferral election in place. What is the correction method for the company?

Thank you,

Scott

I have been a Permanent Resident (a 'Green Card' holder) for less than 8 years (thus not a long-term PR), but would now like to abandon my PR status so that I don't have to travel to the US at least once a year just to maintain my PR status. Once I leave the country, I don't see any reason for me to return to the US anytime soon. So far I have filed my tax return yearly and on time.

My question: What would be my tax obligations upon reliquishing my PR status and surrendering my 'Green Card' (I-551) and beyond in the future years?

My divorce agreement provides for the transfer of 50% of the marital share of my IRA to my ex.

The numbers are as follows:

The total net amount contributed to the IRA is $24,389.32, of which the marital portion is $10,157.87 and the non-marital portion is $14, 231.45.

The Sept. 2009 statement listed the value of the entire account as $31,167.19 (it's invested in stocks),

What is my ex's marital portion? I figured $6,489. Anyone have anyting different?

His lawyer sent me a letter demainding that I fill out the transfer form and authorize the transfer of 50% of the entire account to my ex (my agreement provides that he get 50% of the marital portion of the account) and that I return the form to him within 15 days or he will request court intervention and legal fees of $5,000.

Meanwhile, my ex has not yet paid child support for the month of October, pays the child support consistently late, and has not paid medical support for our son, which has been due since June 2009, has not paid 50% of the cost of certain house repairs required by the divorce agreement, and has not reimbursed me for 1/2 the cost of a QDRO against his pension as required by the divorce agreeement.

I am going to tell his attorney to have my ex pay what he owes before I send him the transfer form. Anyone have any other thoughts?

Have you ever had one of those moments when the longer you look at something, the more confusing it becomes? I am there. There is probably a simple answer, but I appear unlikely to stumble upon it.

Employees have a way of doing inconvenient things. When a QMCSO is received, the employee earns enough that the employer can involuntarily withhold premiums for the medical plan coverage required by order. Employee maintains a cafeteria plan under which employee can elect cash or pre-tax benefits. Employer changes employee's cafeteria plan election to provide for the coverage required under the order as allowed under 1.125-4(d)(1). At some point later, employee no longer earns enough wages to involuntarily withhold premiums for an extended period of time. This could result from a pay cut or receipt of another support order that has priority over this order, etc. Unfortunately, the employee still works enough hours to remain "eligible" for coverage under the medical plan. This is where it all goes awry. According to the CCPA, we cannot involuntarily withhold the necessary premiums; a sentiment also echoed in the NMSN, itself which specifies the withholding limits. However, the cafeteria plan rules do not seem to include a permitted election change to allow the employer to stop making the 125 premiums for such coverage. Additionally, the rules governing QMCSOs provide that an employer may not stop withholding and disenroll the dependent unless the employer eliminates family coverage for all employees or receives written evidence that the order is no longer in effect or that the children will be enrolled in another plan no later than the date of disenrollment from the plan.

How should an employer handle this situation?

Thanks!

A two spouse Db plan wants to purchas a condo with pension money.

One of the spouses intends to use the property when he is in that town for business.

My initial observation is that it is a PT since a party in interest is using (or benefiting from) the property.

Does anyone know of any exceptions that might apply? And does it matter if when the property is used it is used as a home or an office?

I'm wondering if the property were used as an office and the spouse paid market rate rent to the plan if it would be acceptable as qualifying employer real property. I doubt this could apply if used as a personal residence even if fair market rent is paid to plan.

Thanks.

Will the DOL accept an IRS private letter ruling that a plan is a "church plan" under Code Section 414(e) as authority for the plan to stop filing Form 5500s, or is a DOL opinion letter required also?