Are you able to roll money out of a qualified 457 plan into an IRA , even if the 457 plan is not related to a goverment but to a non-profit?

I found some language that rollovers are only permitted for 457 plans under a state or local govemnment but not a non-profit.

Can a retired public safety officer asking for a direct payment to an insurer satisfy his RMD?

The qualified distribution (up to $3,000) must be directly paid to the insurer and reported on Form 1099-R as taxable in box 2A. It will be up to the retired public safety officer to take the deduction on their personal income tax return.

If the participant requested $3,000 to be directly paid to the insurer and his RMD is $1,000, he will only be able to deduct $2,000 as the RMD must be taken into income.

Any thoughts?

This seems like a basic question but there seem to be different opinions.

For an active employee in an active plan, do additional benefit accruals after age 70 1/2 need to be actuarially increased to the start date? Example: participant age 75. Benefit accrued each year is $100 starting at age 70 1/2 (plus a benefit previously accrued which clearly must be actuarially increased to 75). Must these additional benefit accruals be actuarially increased to age 75?

Jim Holland's articles (linked below) seem to say yes.

Relevant IRS regulations seem to say yes.

Gray Book 2007-17 seems to say no.

http://benefitslink.com/boards/index.php?/topic/56689-actuarial-increases-for-deferred-vested-participants/#entry248292

QUESTION 17

Minimum Distribution Rules: Required Actuarial Increases

Question #34 from the 2000 Gray Book provided an example of a late retirement increase,

essentially comparing the accrued benefit based on all service and the actuarially increased

accrued benefits from each earlier April 1 in a plan with an April 1 anniversary date. The

subsequently released Question 8 from regulation §1.401(a)(9)-6 says the benefit payable must be the actuarial equivalent of the benefit from the April 1 following the calendar year in which the employee attains age 70 ½ “

plus the actuarial equivalent of any additional benefits accrued after

that date…” [emphasis added]. Does this mean the regulation requires an additional calculation beyond what was illustrated in the prior Gray Book (i.e., a calculation including actuarial increases on top of additional service accruals)?

RESPONSE

No. The phrase “any additional benefits accrued after that date” are those required under the

rules of IRC §411(b)(1)(H), which provide that an accrual for additional service during a year

may be offset by an actuarial increase for delayed retirement. The year-by-year calculation in

the 2000 Gray Book produces this result

A small law firm plan allows deferrals and match. Plan is top heavy, only non-Keys receive. No other employer contributions. Match formula is 100% up to 3% for NHCEs and 100% up to 1.5% for HCEs, with a last day of the year requirement. 3 non-keys retired. 2 at Normal Retirement Age and 1 at Early Retirement Age. 2 NRA retirees deferred. One terminated on 12/31 and will receive match but not the full 3%. Since all 3 are terminated before the end of the year, are they required to receive the minimum top-heavy under the NRA/ERA provisions or do top-heavy rules supersede, meaning they do not receiving top-heavy as they are terminated? Document is unclear on the matter. Thanks for your input.

Employer A changes insurance providers mid-year and transfers ALL enrollees to a new plan. Old health plan is a multi-provider standard HMO, new health plan is a closed panel HMO HDHP. They do not offer a special enrollment window for their employees to make an election change. If we had made a similar change, we would have allowed an open enrollment window based on a significant change in coverage.

My employee's spouse works for Employer A, and would like to make an election change to add his wife to his plan. His cost of adding her to his non-HDHP HMO coverage with the same carrier would be much less than the upcoming Dr. visit and maintenance prescriptions costs she will incur under her new HDHP.

Has a "loss of other employer's coverage" occurred which would constitute a Qualifying Event as respects our plan? While the spouse had an involuntary change of health plans, she did not actually lose employer sponsored coverage, it just changed dramatically.

Your thought appreciated.

Any good, FREE material available for the EA-2F exam? I'm planning on getting either the ACTEX or ASM manual, but I wouldn't mind some additional, supplemental material.

I couple of years ago we took over a plan that had the plan funding to an annuity. The plan now pays lump sums so we want to change it to fund to a lump sum.

I'm assuming this change would be a change in the actuarial cost method and not a change in actuarial assumptions, correct? Also, does this change require IRS approval? If so, could someone point me in the right direction. I can't get me hands on where this was discussed.

Thanks

An RMD was done before a participant required beginning date. The plan does not allow for in-service withdrawals, and only allows for lump sum distributions. Can we still call this an RMD? Participant was still employed, over 70.5, but not a 5% owner.

For the specific case of a spouse who is the sole beneficiary,
if the participant died prior to the participant's RBD,
for beneficiary distributions from a qualified plan,

does the spouse beneficiary ever have the option to use the longer of the life expectancies of the beneficiary and participant?

If you have a cite or reference in response, please post it here:

http://benefitslink.com/boards/index.php?/topic/56829-rmd-for-spouse-sole-beneficiary/#.VNKJFOl0xaQ

Thanks.

I am working on a plan that failed the ADP test for 2014. 2 HCEs need refunds. They terminated in October and took their assets out in December 2014. Both rolled their assets over to IRAs.

So what do we do to "correct" the test failure? let these former participants know that they need to take $x out of their IRA as an ADP refund?

Are multiemployer retirement plans subject to non-discrimination testing and if so who does it and don't they need census data from contributing employers?

My client is contributing to a union plan on behalf of an HCE and has never been asked for census data and they're wondering if they should have any concerns.

Thanks

One of our clients is asking questions about FICA for a SERP she will be receiving a benefit from. The SERP benefit is the difference between what her benefit would be in the DB plan if no limits applied and what she has accrued in the DB. The SERP document does not have any references to vesting or forfeiture of benefits. She is approaching retirement and has been told that FICA applies at retirement to the present value of her plan benefit. The amount of the FICA amounts to about 15 months of payments. She is being told the plan will offset her monthly benefits by the amount of FICA paid until the entire FICA amount has been recouped. Then, she will start receiving monthly payments in about 16 months. Does this information sound correct?

Hi there,

I contributed to my Roth IRA last year without knowing exactly what my AGI would be. As it turned out, my income surpassed the allowable threshold to contribute to a Roth. I understand that I will need to recharacterize this contribution into a Traditional IRA to avoid a 6% penalty. Once in the Traditional IRA, I would ideally convert this back into my Roth. What is the process for completing these steps? What does my timeline need to be for reacharacterizing, paying taxes, April 15th (and any other pertinent dates), and transferring back into my Roth?

On a related note, I have the same question for a normal backdoor process into a Roth. When do I need to contribute to my Traditional IRA, pay my taxes, and recharacterize to my Roth IRA? Is there a specific amount of time that the contribution needs to stay in the Traditional IRA before converting to the Roth, and do either of these contributions need to happen before or after a certain date?

Thanks for your help!

Cooper

A plan participant is 82 years old and recently retired. She has been very sharp as the office controller for many years. She elected to take her entire $500k distribution as a lump sum.

We followed up with a phone call to ask her if she had really thought this through. She replied that she did and wanted to take the lump sum rather than doing a direct rollover. She seemed to be of sound mind when speaking with her.

So we processed the distribution as a lump sum just like the benefit elections indicated.

Today (30 days after the actual distribution took place) her financial advisor called and mentioned that she is not well and should have rolled over the entire amount.

She has another 30 days to roll over the entire amount (including the taxes withheld) to keep it all tax deferred. However, it appears she does not have the liquid assets to do this. She does have non-liquid assets (Real Estate etc).

I don't think there is any way around coming up with the withheld taxes in the remaining 30 days.

Any ideas?

Thanks.

402(f) Notices are for eligible rollover distributions only, right?

So I would not have to send one with RMD paperwork?

We are relatively new to Roth 401K and in fact do not have any at this point.

Client wants to amend their profit sharing plan to a safe harbor 401(k) non-elective 3%.

All participants were given the safe harbor notices for 2015 in a timely fashion, and were given the option to do Roth or regular 401K contributions,

The two principals only want to deferral, and only have Roth deferrals, the other employees will not be deferring.

Can you have a 401(k) that only has Roth deferrals?

What is the citation?

Years ago I seem to remember university professors being able to max out both their 457b and 403b plans. Is this still the case? Can someone like a university professor contribute 18K to a 457b and 18k to a 403b? If so, what about catch-up contributions too? Thanks!

Hi does anyone see a drawback to naming your revocable trust as the beneficiary or your IRA or retirement plan? I seem to recall hearing negative things about doing so, but if the trust is the beneficiary, the trust will then direct the distributions. Unless the drawback here is that you're paying a trustee potentially to do the distribution for you instead of e.g. naming both kids as the beneficiaries.

Hi can someone clarify this for me please...if I roll an IRA into a 401K, does the administrator account for those rollover dollars separately in case I want to roll those IRA dollars (and accumulated earnings) back out to an IRA?

1.410(b)-7©(3) (on testing otherwise excludables separately)

If an employer applies section 410(b) separately to the portion of a plan that benefits only employees who satisfy age and service conditions under the plan that are lower than the greatest minimum age and service conditions permissible under section 410(a),

I have a client who has no good way of knowing how many hours someone worked. Everything is done using elapsed time. Therefore, they have no idea who has and who has no satisfied the "greatest minimum age and service conditions permissible under 410(a). Therefore, if I simply assume everyone is full-time, it is possible that I will be including OE's in my "main test."

Example: Susan works "about" 10 hours a week and contributes her entire paycheck to the Plan. She should not be in the main test. In other words, one cannot assume that the testing would always be hurt by this assumption. We're talking about hundreds of employees, so please don't say "I thought they didn't track hours"

Is there anything that says I can use some alternative method of determining who has not met "the maximum age and service conditions under section 410(a)?"