FundeK

I have searched the boards and come up empty handed. Has anyone had the scenario where a participant did not receive their RMD timely, so they submitted a letter to the IRS and a Form 5329 asking for a waiver of the 50% excise tax, but did NOT sent a check with the request for waiver? What happens if you don't submit the check?

I do not believe that you can roll a Roth into a qualfied plan right now either. SoCal, Is that what you were suggesting?

No. After-tax IRA money can not be rolled into a qualified plan.

I really hate to do this, because I hate when I get this reply, but....try doing a search using "bankruptcy". Try the 401(k) forum and the distribution and loan forum. You will get a lot of good information.

mbozek, I am sorry, but I am not understanding how the son in your example got away with this. Isn't it outright theft? He signed his father's pension checks? Can't the plan sue under some other law? Or, is a plan always required to sue under ERISA. It just seems so wrong if the son got away with this!!! I do understand the difference between actions in equity and actions in law, but your example just seems so.....well illegal!

At what point does the fact that the participant/beneficiary is being dishonest/breaking the law? mbozek, in your example below, did the beneficiary cash the checks for 10 years after the participant died? If so, isn't that illegal whether it traceable under ERISA or not? Can the plan sue based on the fact the the beneficiary was fradulant?

I am probably going to have about 100 questions on this topic, but I will start with the following: Is the Fiduciary responsible for seeking recovery for all overpayments from the plan, no matter how they occurred? I have read through many posts on this topic and found a great deal of information. I read that for overpayments under $100, the fiduciary must notify the party of the overpayment, but is not required to see recovery. So, does this apply to situations where a dividend was double posted, a price was incorrect at the time of payment, etc. It seems to me that you must attempt recovery and let the participant know that those funds are not eligible for rollover. You must then correct the 1099-R correct? Does anyone have any comments or insight they would like to share?

ASPPA (www.aspa.org) has a series of three take home exams that will earn you a pension adminstrator certificate. Each exam costs $99.00 which includes the study materials and the exam. You have to receive a 90% of the exam to pass. (Also looks like you can get all three for $290.00, but you would have to take them all in 2005) I think they are a great place to start to get some basic knowledge. Searching the internet will also lead you to good articles for beginners. And of course, reading through the postings on this site are always enlightening! Hope this link works http://www.asppa.org/education/ed_pa1_pa2_pa3.htm

Many loan policies allow for a suspension of payments, for up to one year, for a leave of absence other than military. Could this particiant fall into that category, and does the loan policy allow for this suspension?

I do not know of any reason why it would affect the availability of a hardship, unless of course, the plan document prohibits it. Can't say I have ever seen that though.

I read through the Form W-4P instructions and have a few questions. Periodic Payments. Withholding from periodic payments of a pension or annuity is figured in the same manner as withholding from wages. Is a 401(k)/PS plan considered a pension plan for these purposes, or does it only refer to MPP and DB plans when referring to pension plans? Would an installment payment over the life expectancy of a participant in a 401(k) plan be considered a periodic payment or a nonperiodic payment. Also, the instructions mention that distributions from an IRA that are payable on demand are treated as nonperiodic. What does "on demand" mean and how would that apply to a 401(k) or PS plan? Thanks

Have her send a "sob story" letter to the IRS asking for a waiver of the 60 day rule. They like to issue waivers, don't they?

So, did the forfeiture account balance go down because of fees? If so, are fees charged to all participants in the plan? Pro-rata? Equal Amounts? Couldn't you adjust the allocation to take into account the fee? For example, say all participants in the plan were charged a $5.00 fee, including the forfeiture account, on 10/01/04 (100 participants total). You prepared the forfeiture allocation report on 9/15/04 for $5,000, and receive sign off from the company on 10/15/04. Your forfeiture account balance is now $4995. Why can't you reduce everyone's allocate by $.05 to take into account the $5.00 fee. If you had processed the allocation on 9/30/04, you would have allocated the entire $5,000 and each participant would have been charged $5.00 anyway, so why not share the $5.00 fee charged to the account equally? Does this make sense at all?

Nothing to base this one, except that it feels really wrong.... Why in the world would you process a loss to all participants? By loss, are you talking about the fund the forfeiture account uses lost money. So, you started with $2,000 in forfeitures, ended up with $1,800? Or are you saying there was an some kind of error in processing and the forfeiture account had to fund money causing a loss?

9. Tell them that you LOVE your job (as described in #10)

I am full of questions today! I have a similar situation as that of the original poster. Jevd stated that the answer was A. My questions are: Does this have to be allowed in the plan, or is this a "given"? And does anyone have a cite or reference? Thanks much!

I like Bird's explanation!

I do believe it means in equal amounts. So, the children would each get equal amounts of the account balance.

The participant's required begining date was April 1st following the year of retirement. He died in August 2004, so his RBD was not met before he died. If participant dies before the RBD, the first distribution calendar year is the year that immediately follows the year of death (correct?) So if she had left the money in the QRP, she wouldn't have had a RMD due to her for the 2004 year, but would have one due for the 2005 year (based on the 2004 balance). So, she rolled over the funds to an IRA and is in the same situation she would have been had she left he money in the QRP. Right?

Husband participated in a qualified retirement plan. He was not a 5% owner and continue working until his death at 76. His spouse took a total distribution and rolled it into an IRA in 2004, which is also the year of death. An RMD was not withheld at the time of rollover. The spouse is also over 70 1/2. When does the spouse have to begin to receive distributions? If you are over 70 1/2 when you open the account, do you have to commence distributions right away, or the year following? Thanks!

If the participant was over 59 1/2 when the installments began, I don't know of any tax consequences that would apply if he/she stopped payments. You already stated it was allowed per the terms of the plan, so I can't see any reason why it couldn't be allowed.

Probably a silly question, but the terms are used interchangeably around the office. Is there a difference?

How old is the participant?

I guess that is where the debate is. Does the beneficiary become the "owner" of the account? Ever? What would happen if it was mistakenly reported as a code 7 when it should have been a 4. Would you go back and correct it if it was a year or two ago?

What about a code 7? Does anyone use a code 7 for the LE distributions?