QDROphile

The IRS has said informally that principles under EPCRS are apt for 457(b) plans (at least for government plans in certain circumstnaces), but there is no correction formality or assurance that corrections will provide relief. If I were dealing with a top-hat 457(b) plan, I would not follow the EPCRS guidance.

Why is it not taxable with respect to the date of credit of the converted amount to the Roth account? The timing of the credit date is determined by the plan's administrative practices the same as the distribution date of real distributions is determined by the administrative practices of the plan.

1. Such a transaction would not be a deferral. A deferral applies to compensation not yet received. 2. If 1 did not apply, without an exemption the transaction would be a prohibited transaction. An individual exemption would probably be prohibitive.

No one HAS to take the money. It is a good idea to check with a prospective provider if they will make IRAs available for mandatory distributions if the participant does not participate in setting up the IRA.

Also, if the participant had already taken a full distribution of benefits and then the corrective contribution occurred, no tail distribution would be required if the amount is under the minimum. That would effectively mean no contribution for the individual, but what needs to be done about that amount depends on circumstances. Under one VCP filing, the amount was treated as a forfeiture.

Any concern that the amendment itself (which subject to 401(a)(4)) could be discriminatory because it benefits only the HCEs? That gets us back to the old questions about neutral terms of an amendment the effectively benefits only HCEs when adopted but could be nondiscriminatory over time.

I got the IRS to approve age 40 for an ESOP (stock bonus plan, not PSP, but subject to same rules) in a determination letter filing. ESOPs have another layer of distribution rules that may have influenced the reviewer.

The IRS pays bounties on tax evaders. Is there an obligation not to report?

Is the plan being operated in accordance with its terms? What did the ocean say to the shore? Nothing. It just waved.

Does it help to know that a Roth account is treated as a separate contract under section 72? T.D. 9324.

If this is a personal question about your ability to contribute to a plan that covers you, the plan terms will state how after-tax contributions are made. If your question is more abstract, then consider that "salary reduction" in its most precise use refers to an arrangement in which compensation is reduced for income tax purposes in connection with a contribution, a so-called (gag) "pre-tax" contribution. Roth contributions messed up the meaning by defining the contributions as elective deferrals that do not reduce compensation.

ERISA 404© regulations require the ability to transfer funds among investment options at least quarterly. ERISA standards require that fees paid from plan assets be reasonable. Assuming that each of menu A and menu B would be section 404© compliant by itself and the cross transfer fees were charged by third parties based on their costs or fees generally applicable for the services under similar circumtances, one might be able to conclude that the fees were reasonable and the delay is reasonable. I suggest reconsidering if availability of a particular menu of funds is worth the trouble and if some suspect person or group is behind the demand.

And mind what portion of the deferred comp amount is included in FICA wages.

Are you saying that there will be no operations or pay to employees from Jan 1 until approximately March 1? Did you intend to use the term "merger" correctly?

Perhaps the plan document.

Entity A's cafeteria plan does not appear to be doing anything for entity B. Entity A's health plan might have some issues with providing benefits to Entity B's employees, but that would be a concern of the applicable state law. Your cafeteria plan question is probably something like, "Can Entity B's cafeteria plan provide for salary reduction by an Entity B employee for payment of the employee's cost of coverage by the Entity A health plan?"

It is not a "mistake of fact" as the IRS has informally described how it understands that term. No comment on the correction proposal.

Wife consents to children as beneficiaries of husband. Wife trusts children will share the benefit if wife needs the support. That may be the simplest approach, but not the best. If one wants wants sophisticated planning for a result that bucks the policy embedded in the law, one should pay for it.

There is no specified legal limit but there is a practical limit based on legal requirements. The 75% limit is a plan design feature, but maybe not an optional feature depending on the source of the plan document. It happens to correspond to a safe-harbor limit determined by the IRS with respect to catch-up contributions. That is another matter, but you can take it as a sign of legitimacy if you are the skeptical type. You cannot defer 100 percent because there are other amounts that are legally required to be taken from your check, such as FICA withholding and possibly othe taxes. There are also other amounts that you would want to have priority, such as salary reduction for healthcare premiums and childchare spending accounts under the employer's cafeteria plan. The one 75% size may not fit the demands on your pay very well, but reliable administrative uniformity keeps adminitration costs down, which also benfits you. Or so Fidelity would have you believe.

It is called a cafeteria plan.

Is the leave unpaid? What is the formula for allocation of contributions? The plan has to be operated in accordance with its terms, so you might need to find something that says you can make a contribution for which there is no basis in the plan document. I don't think USERRA will do that for you. USERRA is generally about what employers are required to do; employers are not required to provide compensation (imputed or otherwise) or benefits during the military leave. The nest feathering will just cost a bit more this year. Consider it a war tax.

I agree that sponsor elective design changes, as reflected in plan amendments, are not eligible to be paid out of plan assets. Compliance amendments may be different, but what happens when there are choices among complaint options and related changes depending on choices? It can be hard to draw the line. I try to get the sponsors to suck it up and pay for the cost of amendments.

What is causing you to go through this exercise rather than elect Roth contributions instead of after-tax contributions?

Then the contracts are not compliant and no tax deferral. Issue 1099-R for the entire difference,.

Where does a summary plan description come into the picture for a premium-only section 125 plan? An SPD is required for the health plan, but that is presumend to be on track.