QDROphile

With respect to prohibited transactions, see section 408(e) of ERISA. An independent appraisal is effectively required.

Treas. Reg section 1.401(k)-1(d)(3).

Discussion and debate at an old thread that started on November 12, 2001. Search the ESOP topic for "scam."

This is a sham ESOP design. You are right to question it because it is bogus. However, the IRS buys the idea that the stock fund is the ESOP, so the ESOP is always 100% invested in employer securities. The concept passes the road test and many companies use it. Why not? It is a way to get essentially free deductions if you already have an employer stock fund.

Put your finger on the word"and" in the passage. The exception applies to regulated trust companies or insurance companies.

Try www.yourlifeonasilverplatterforfree.com

A couple of options: 1. As an adminstrative matter the plan will apply the election only against a defined limited portion of the compensation, such as amounts that would otherwise run through a paycheck in the regular pay system. This may not be possible if you have a restrictive and rigid plan document. Intelligent plan documents are vastly underrated. 2. The elected amount reduces other contemporaneous cash compensation. This can be very difficult to catch because the payroll system is often unaware of the other compensation. Even with knowledge, the individual sporadic adjustments to the regular deductions may be too difficult. Also, if the extraordinary compensation is significant, the paycheck can be decimated just in time for the rent or mortgage payment, sort of like a negative bonus. Under both approaches, the procedures should be described in the summary plan description and in the election form. When participants eelct, they should understand what the election means so they can plan accordingly.

Information is correct. For this year, amounts are includable in compensation that you did not expect. You should seek advice about what to do for past years. You should ask for an explanation from whoever sold you the 125 plan.

You have got to be kidding if you are suggesting that the credit risk was a substantial risk of forfeiture for section 457(f) purposes. If you are not kidding, you have nothing to worry about for section 409A compliance because all of the accrued amounts are already taxable.

Have you thought about rehabilitating the plan? What does "was never qualified" mean?

I also can't spell or type very well.

Do you know the defintion of cafeteria plan?

Negative.

What part of "irrevocable" is causing questions?

Before December 31, 2007, in accordance with transition rule. Do you care if grandfathered amounts remain grandfathered?

Was the opt out based on the one-time irrevocable election provisions under the 401(k) plan regulations?

No.

The IRS publications are availabe on line at http://www.irs.ustreas.gov/formspubs/lists...d=97819,00.html. The publications address your questions.

The IRS position on the issue is that the cost of coverage does not matter. The value of employer provided coverage is taxable even if there is no marginal increase in premium for the coverage. Unless the employee covers the value with an after-tax premium payment, the employee wil have taxable income.

Ask for another copy of the summary plan description and ask if it is up-to-date.

What business do you have allowing or disallowing amendments? If you are in a position to be responsible for such matters and you deal with liability on a case by case basis, you have some inherent problems that you need to address.

1. That is up to you, but installments of a small amounts usually do not make much sense unless you are on the edge of a tax rate. Also, you should be able to leave the money in the plan until something happens to your former spouse, such as he takes a distribution or reaches retirement age. Many plans try to push out alternate payees. You need to understand the difference between a distribution (getting the money from the plan) and rollover (the money goes to your IRA) because of the different tax consequneces. Whether or not or not you elect to roll over money taken from the plan, you will have a distribution. You can have the money sent directly from the plan to your IRA. That is called a direct rollover, but it is still a distribution. A direct rollover has the best immediate tax consequences. All of your money goes to the IRA (no withholding) and you have no taxes until a later distribution. Before you take a distribution, the plan should give you written information about your distribution options and about rollovers and direct rollovers and the federal income tax consequences. 2. True. If you roll over to an IRA and then take a distribution before age 59 1/2, the penalty will apply unless another exception applies. 3. Check the tax and rollover information from the plan. If you do not elect a direct rollover, 20% will be withheld from your distribution for federal income taxes - lump sum or installment. Also check IRS publications about distributions from retirement plans, available on the IRS web site. The plan should also tell you about state tax withholding, but it may not do so automatically. You may have to ask if state taxes will be withheld. 4. Not as far as the retirement plan is concerned.

No participant consent to a correction. The IRS does not need participant consent to disqualify the plan. Would you mind explaining how catch up contributions get matched? Under most match terms, it is mathematically impossible to match catch up contributions except when the ADP test is the limiting factor. And if the ADP test is the limiting factor, one would think that catch up contributions would be matched.

Whether or not you can make the arrangements work legally, it is stupid, so just stop.

If one can choose a "model" allocation by checking a box, it is an investment option and the adviser has constructed it, unless the investment form was done without the adviser knowledge or consent. The adviser has the responsibility of a fiduciary who has chosen an investment option for the menu, the same as if the plan administrator has chosen some "lifestyle" fund for the menu. Depending on the adviser's engagement, the adviser may or may not have the same duty to monitor as the plan administrator has for the chosen lifestlye fund. Anthing else that is disclosed on the for or otherwise might cause the adviser to have more fiduciary responsibility. It does not sound like the disclosure is adhering to the guidance about education. Among other things, the guidance does not anticipate that education will focus on the particular investment options of the plan.