Wife named husband as beneficiary of her retirement account.

Wife died. Plan is insisting that estate is the beneficiary of her account and not her husband. They say:

Client elected to receive lump-sum payment of her benefits, beginning one day after her retirement date

She dies after completing and submitting the request to the plan, which had a annuity start date that came about for a date after she died.

The plan was notified of her death before they issued the check. Still, they issued it in her name, FBO her IRA.

Spouse returns the check to the plan, asking for it to be issued to him. They refuse and issue it to her estate. They claim that her estate and hot him, is her beneficiary.

They claimed she elected a Lump-sum sum optional form of benefit, with no beneficiary benefit. Her spouse consented to the annuity waiver, thus allowing the lump sum. However, they are claiming that her estate (and not her spouse) is her beneficiary because:

------- For beneficiary, they define as someone named by the participant to receive survivor benefits, who much qualify on the annuity starting date.

------- She died after her annuity starting date, therefore no benefit is due to her named beneficiary.

Can there legally be such a provision in a plan?

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Using different name to protect client.

Has anything change recently in determining an assumption for the expected rate of return on assets?

Thanks

We are still working on our EGTRRA restatements. We started them earlier this yr and plan to have them all done and signed by the end of 2009.

I was just curious to find out if we were the only one's still working on them, I feel like a lot people that I've spoken to had them done last year ....or are almost done.

I was just curious what most people normally see with regard to DB QDRO's. Let's say a participant was married before joining a DB plan. He has X years of participation at date of dissolution. He has Y years left until he reaches the plan's normal retirement age. It's a final average pay plan, meaning his ultimate retirement benefit is based on his highest Z year average compensation.

I had always seen the alternate payee's benefit based on the average compensation and years of participation at the time of dissolution with no consideration of future increases in compensation or additional years of service.

However, I ran accross a situation recently where that wasn't the case. Instead the DRO accounted for any increases in compensation and the ultimate annuity paid to the alternate payee would increase correspondingly.

I don't work with many QDRO's so I was curious what others have seen?

Do the new extensive reporting requirements come into play with the 2009 5500? I am thinking yes, for both ERISA and non ERISA plans.

I understand that generally a participant of retirement age in a pension plan who switches to part time work, and even works <501 hours must still formally terminate employment before receiving benefits. Howbout a participant who terminates and then comes back to work in one of the following scenarios:

1. Already receiving benefits - if working under 501 or 1000 hours, must the participant always stop receiving benefits, even if participant is not accruing new benefits?

2. Not receiving benefits - participant has come back to work and is working under 501 or 1000 hours, can participant start receiving benefits?

What if plan is frozen and the company is under a new employer?

We received a benefit commencement request from a plan participant for a rollover from DB plan to an IRA. The participant (husband) included a copy of a Separation Agreement from 1999 which indicated that the wife is entitled to Majuskas share of the pension. However, the benefit commencement application (from 2009) included a signed & notarized spousal consent from wife irrevocably consenting to husband's 100% rollover election.

What are the Plan's obligations with respect to payout to participant? Do the terms of the separation agreement necessitate a hold on benefits? Or does the 2009 spousal consent and acknowledgement take precedent over the terms of the 10 year old separation agreement? Any input is appreciated. Thanks.

Our DB plan allows a lump-sum payout and does not prohibit rehire after retirement. Several of our retirement-age employees have recently expressed interest in retiring simply so they could collect their lump-sum distribution and then be rehired immediately. They don't wish to retire -- they just want the cash now.

I understand we would put the plan at risk for disqualification if there is not a complete separation from employment; therefore, we are looking at establishing criteria for rehire eligibility (e.g., 6-month wait) and are looking for information, guidance and reference material on designing/implementing rehire/retire criteria. We have discussed this with our DB consultant who suggested amending the plan to include criteria to dissuade false retirement. The only information I can find relates to retirees receiving annuity payments, not lump sum payments. I would like to get a feel for what other companies have done.

Thank you.

Just wanted to see what other folks do or have encountered. We frequently have cross-tested PS plans that terminate without having had a contribution for the year of termination, and often previous year or years as well.

In the past, we have had them pay the higher fee on the 8717, and sent a Demo 6 for the last year the cross-tested formula was utilized, on the assumption that there's obviously no point doing it for the year of termination when no contribution is made, but important to receive approval for the last year it WAS utilized.

The IRS has never questioned or commented on this approach. Recently we have had reviewer feedback in some cases to complete the 5310 with the formula default provisions, not send the Demo 6 and have the Employer pay the lower filing fee of $1,000.

Wondered what y'all do, and if you have received similar comments/feedback. If you have, have you changed your method? We've had so many terrible experiences and wasted so much time with plan termination reviewers who know almost nothing that we're very hesitant to adopt this approach based upon limited reviewer feedback. Maybe we are being too conservative, but I'd appreciate any opinions. Thanks!

If an IRA has UBTI (990-T line 34) over $22,500 is it also subject to AMT?

Are annual interest credits based on the account balance on the 1st day of the year or the last day?

We have a plan that was apart of a controlled group. The company has since gone out of business, and the board of the controlled group now wants to terminate the plan. All of the employees in the plan were terminated as of 12/31/2007. Although, everyone has a distributable right to their money, no one has taken their funds do to market perfomance. The existing employer wants to stop administering this plan and get rid of the cost of filing 5500's, the issue is a participant has an outstanding loan. The loan policy does not have any language to accelerate the loan to default status incase of plan termination. The only way the participant could default the loan was if they missed 3 consecutive payments. The loans are not payroll deducted, they are paid ACH, which allows terminated participants to continue paying on their loans. Although, its not stated in the document to call in these loans for any other reason than missed payments, is there anything in the law that could get us around this issue?

Can a US company permit Canadian employees who are not US citzens to participate in its retirement plan? They are working in Canada and are not US citizens.

Can anyone direct me to guidance/website on how to calculate earned income for plan purposes for a limited partner in an LLC?

I've got self employment earnings (unfortunately, way under comp limit...) but i'm stumped on whether limited partner is responsible to reduce self employment by employee share of deferrals/match? And i'm assuming they reduce by 1/2 SE tax, but not positive.

The limited partner K-1 shows 90% share in profit/loss/capital.

Accountant was of no help as when i asked for earned income (and gave them definition in plan document) they responded that self employment earnings was on line 14A of K-1 (yea..no kidding!)

I've found little guidance/resources and misery seems to love company as my pension friends run far when i mention K-1/LLC!

Thanks.

I don't really do a whole a lot with H&W plans, but have been asked to look at one briefly.

Company offers short term diability insurance to employees. Completely voluntary; paid with after-tax dollars via payroll deduction. Is this a welfare plan subject to ERISA? Trying to determine whether 5500's should have been filed. Well over 100 participants.

Thanks in advance for any guidance.

We recently acquired a target benefit plan. Upon review of the plan document and through discussions I've had with the client, my understanding is that benefits stop accruing at the age of 66. The way that the formula is written, a participant would receive their final contribution at age 65.

I am not familiar with target benefit plans and would like to resolve any issues now, while the client is transitioning to our system. Does this allocation formula sound right?

Thank you!

Is there any scenario under which the contributions made under 401(k), 401(m) and employer QNECS can be aggregated for coverage testing (contrary to 1.410(b)-7©)?

Division 1/ Plan A has 401k and 401m contributions.

Division 2/ Plan B has 401k, 401m and QNEC.

Division 3/ Plan C offers only a QNEC.

Thanks for your help.

The QACA rules provide that a plan must use the Section 414(s) definition of compensation for automatic contributions. May a plan that has a QACA use a different definition of compensation for participants who already made affirmative elections? In other words, does the 414(s) requirement also apply to affirmative elections?

ESOP loan was fully repaid in July 2007, with the company repurchasing all unreleased shares. Eligibility section was amended to freeze future participation at that time.

Three participants were terminated in 2007 prior to the participation freeze. They were re-hired in 2008. Should they:

a. follow the re-hire rules in the plan doc (no breaks in service, so re-enter plan with all service intact), or

b. be considered non-participants since participation is now frozen.

A participant in a DB plan has been significantly overpaid. The participant is contacted and offers to pay back the amount of the overpayment, but requests to do so over a period of time spanning multiple years. Any thoughts on whether this is a permissible return of overpayment or whether it would instead be a prohibited extension of credit under Code Section 4975©(1)(B)?

(By the way, the reduction of future benefits is not a feasible solution, because the actuarial value of all future payments is less than the overpayment.)