Does a non-qualified deferred compensation plan fall under Section 402(a)(8) of the Internal Revenue Code?

In Revenue Procedure 2003-7, the IRS provided the necessary procedures to request a waiver of the 60-day rollover rule for IRA distributions under Section 408(d)(3). What are the chances that the IRS will grant a waiver where the taxpayer relied on the advice of his broker that the rollover rule was 90 days, not 60? The taxpayer took a $3.5M interest free loan from his IRA and returned the funds on the 89th day. We will have to argue that based on the facts and circumstances, it would be against equity or good conscience not to grant a waiver. This is really not an error committed by a financial institution since I believe this references an accounting type error, not erroneous advice. Any thoughts would be helpful. Thanks.

Our plan has a rule that states that monthly loan repayments cannot exceed 20% of gross monthly earnings. This is above and beyond the rules regarding maximum loan amounts (i.e. $50K or 50%).

We're looking at amending our loan regs and I just wanted to make sure that before we got rid of the 20% rule that I'm not violating any regs.

Any input?

Does the Code define what types of education "post-secondary" education includes? Or are we to assume it only includes college and university education - not vocational/occupational education

Does anybody out there know of any articles or websites that might have information on the topic of Life Insurance as an investment option within a retirement plan? The article can be pro or con, I just need a reference, as nothing that I have searched has anything that goes into the specifics. The only thing I find when I search things like CCH and the Retirement Plan Answer Book is that Life Insurance should be an incidental benefit within the plan and your premiums are subject to limitations (within a DC plan), which I already knew.

Any help would be appreciated.

Client has DB and DC plans. DB freezes in 2002, presumably not requiring top heavy minimums.

Does the DC plan then need to satisfy the DC top heavy minimum, or both the DB and DC minumums?

Assume, for example, that the PS includes K deferrals for key employees exceeding 5%. Do non-keys need to get minimums of 3% or 5%?

I have a QDRO, determination date of 9/30/02.

This week I plan to do the money movement.

The QDRO I have specifies the amount to move, but it also states that the alt. payee is entitled to earnings or (loss) on the portion of such amount accruing after the determination date.

I take this to mean that the alt. payee's amount could increase or decrease, based on earnings, realized & unrealized, in the current participant's account.

Is there a standard method for calculating this amount?

If the alt. payee is receiving, for example, 67% of the participant's acct. balance (this includes a loan balance), should the alt. payee share 67% of the earnings - even if it's a loss?

Thank you in advance!

Retiree who is receiving monthly pension from defined benefit plan has asked if he can assign the monthly payments to a revocable trust he has established. He represents that he is taxable on the income of the revocable trust. Pension plan does not currently allow the arrangement requested by the retiree.

Other than the anti-alienation rules (and the lack of authorization in today's plan document), what other problems/issues do you see with the retiree's request?

Thanks.

A split-funded plan currently requires an insurance multiple of 100x the expected monthly retirement benefit. What happens if benefits are frozen? The 100x will be exceeded in all instances. Must the insurance be reduced? If so,what happens if the freeze is lifted? It will almost certainly cost a lot more to replace the coverage at a later age than it would had the policies been continued.

Here's an amazing site:

http://www.panoramas.dk/

Travel the world using your web browser and the free Apple Quicktime plug-in! You're able to use "virtual reality" to swing your view 360 degrees once the view has been downloaded to your computer -- go into caves in Slovenia, visit Beale Street in Memphis, etc.

The site is described here:

http://maccentral.macworld.com/news/0202/21.qtvr.php

Seems to require a high-speed Internet connection to be used effectively.

A 401(k)/Match plan has 28 employees. The employer terminates 16 employees in the year, most are involuntary and in the last month.

12 total participants are active or termed have match balances. (5 x 100% vested & termed, 5 x partially vested, & termed, 2 x active).

Evaluating the plan on simple math, the employer terminated 57% of the employees.

Is there any deminimus amount of employees/participants that would allow the employer to not be considered as exceeding the 20% threshold of terminations for a partial plan termination?

The forfeitures may not be significant enough to warrant getting a FDL.

I'm writing this on behalf of my father-in-law. I'm not familiar with defined benefit plan terminations and PBGC guarantees.

He retired under National Steel Corporation's DB plan at age 45 under "rule of 65", a benefit available due to the circumstances surrounding a plant shutdown and him being forced to terminate employment. The "rule of 65" allowed full normal retirement annuity benefits (reduced for age) at age 45 w/ 20 years of service. He's now age 56.

The plan also provides for medical coverage w/ small employee co-pay. He claims that the company explained to him that the DB plan guaranteed medical coverage for both him and spouse for their lives.

National Steel corp is currently in Chapter 11 bankruptcy, the DB plan is underfunded, and required deposits to the plan aren't being made. As a result, he received the notice to participants regarding underfunding. The notice mentions benefits under rule of 65 may be affected although we don't fully understand how.

Current news indicates two companies have bid on the National Steel: US Steel and AK Steel Corp, although local newspaper articles said they are trying to avoid pension liabilities in the acquisition. However, US Steel has agreed to accept a portion of current liabilities of the company. Rumor has it National Steel decided to go through the bankruptcy process to get the PBGC to take over and terminate the plan with the intention to help sell the company.

Obviously, he's concerned about possibly losing his medical coverage and perhaps a portion of his annuity. I explained to him that it's my understanding retiree medical benefits are generally not a vested protected benefit and the PBGC normally does not continue this type of benefit.

The present value of benefits that may be taken away is quite significant. If anyone has any comments, explanation of rights, or whether an attorney can help in any way, he'd appreciate the help.

Thanks

If a plan satisfies the 410(B) coverage test, will it also be deemed to pass the 404(a)(4) non-discrimination test requirements for contributions? Or must further testing be done with each rate group?

EGTRRA expanded 404(a)(1)(D) to allow the deduction of the unfunded current liability.

A valuation is being performed as of 1/1/2003.

Is the new maximum determined based on the values as of the valuation date??

May / must they be revalued as of the end of the year??

I would think the numbers would be calculated at the valuation and experience would either work or not. Another actuary wants to consider the additional accruals through the end of the year BUT this means they must also use assets at the end of the year for consistency.

I have not found a good site for regulations. I have found a great site for code access.gpo.gov/ecfr. Check it out!

I have a startup DB plan where the plan sponsor wants to exclude service prior to the effective date for purposes of vesting. Is this okay?

For a refund of excess contributions that is made prior to March 15, 2003 (PYE: 12/31/2002) a 1099-R will be issued for the year distributed with a code P. This part is clear.

How is this reported on the individuals federal income tax return for 2002? I keeping reading that if the individual has already filed their tax return, then an amended return may be necessary. If so, when is this the case?

Thanks, Joe

I AM 45 AND RETIRED ON DISABILITY, I CAN NO LONGER CONTRIBUTE TO MY ROTH BECAUSE MY ONLY INCOME IS MY PENSION AND STOCK DIVIDENDS. I HAVE SOME STOCK IN MY ROTH THAT PAYS DIVIDENDS IS IT O.K. TO LET THOSE ACCUMALATE IN MY ROTH OR IS THAT CONSIDERED A CONTRIBUTION? ALSO ARE THESE DIVIDENDS TAXABLE OR TAX FREE IF THEY ARE IN A ROTH IRA?

12.31.01 plan is not top heavy for 2002.

Participant terms on 2/15/02. He is not paid by 12/31/02.

12.31.02 plan is top heavy for 2003.

Vesting Sched goes from 7-yr to 6-yr.

Does the terminated participant get a 1 year bump in vesting due to the new top heavy status?

thanks...

The 2002 Instructions for Form 1099-R promise an update of Notice 2000-38 for further guidance on reporting distributions from governmental section 457(B) plans. Has anyone seen an update? Can you provide information on where to view it?

suppose a doc gets divorced and the dro indicates the ex is entitled to a specific dollar amount (not to be adjusted for investment gains or losses). what happens if the doc's balance drops to below the amount specified in the dro? obviously the ex can't be paid what isn't there, but where do we go from here?