RayJJohnsonJr

Thank you jpod and David. This clarifies the requirement that there be a separation from service. Why do you suppose this rule exists? Would not the IRS get more tax sooner if the SERP payments were not deferred? 409A frequently refers to "compensation deferred under the plan." This SERP did not involve the executive deferring compensation. It is fully funded by the employer. Would this have any effect on the outcome in so far as the additional 20% tax?

The corporations attorney says the executive could incur adverse tax consequences by taking the SERP payments and continuing to work for the corporation. Something about a potential excise tax that made no sense to me. The SERP agreement says there has to be a break in service for the executive to collect the SERP retirement payments but the business owner and the executive are both willing to strike the "break in service" requirement from the agreement. Other than the SERP there is no employment agreement. Does anyone know if and why there could be adverse tax consequences to the executive if he collects the SERP payments and continues to work? Does anyone know where I might find some authority I can read on this subject? Thanks to anyone who has input. Ray

An Executive has reached his retirement age but he and his employer want him to continue employment or consult to the employer. The employee wants to receive both the SERP payment and continue to receive compensation for continuing to work and the employer is agreeable to that. One thing the employee wants is to continue 401k contributions. Is there any problem with the employer paying the 1st annual SERP payment and continuing to employ the executive?

Thanks, I'll check that out.

I was expecting to pay for the document from a document provider company like Ft. William (they have DB but not with 412(e)(3) provisions). I have not found a document provider that has a 412(e)(3) available. Seems like there has to be one somewhere.

I'm trying to get just the Document to update some 412(e)(3) Plans I administer.

That's funny!

Does anyone know a good source for a 412(e)(3) document?

So, the max comp is the ultimate limiting factor. I saw where a Plan that existed before 12/31/07 could grandfather in a larger benefit.

Thanks Effen.

Is there a table showing the maximum monthly benefit limits for older ages, for example, ages 66 to 80?

The contract permits lump sum distributions and the plan permits lump sum distributions after NRA.

My 2 cents: In this case it is a deferred annuity that is like savings vehicles that can, one day, be converted to income. So the annuity permits withdrawals. Let me ask you this, in a regular DB, if an LSD is available after NRA, can a participant take a portion of their LSD? I know that would depend on the document. But, can a DB do it without running afoul of DB regulations?

In a 412i each participant has their own annuity. Some have life insurance, this one doesn't.

Does anyone know if there is a way to do this in a 412i?: The participant is age 66 and still full time employed. NRA is 65. The participant (an owner) would like a withdrawal of a portion of his account. I'm not asking about the document, I'm asking about whether 412i regs permit it.

The participant only needs to withdraw the $100,000 and not the loan, the loan repayment is not presenting a problem. The participant simply has an unanticipated need for the money.

Thanks ESOP Guy. I'll mention that to him.

Thank you, Lou, for clearing that up for me.

The Plan allows the withdrawal of any amount the participant chooses. What I was concerned about is the loan. Since at the time the loan is made, it cannot exceed 50% of the vested account balance, would it be true that the plan needs to retain $30,000 to equal his loan balance since the loan cannot exceed 50% of the vested account balance? That seems logical, but I cannot find any authority which addresses this question exactly. Thanks for your help.

An active partner in a professional firm, who is age 66, has a loan outstanding of $30,000 and an account balance of about $100,000 in addition to the loan. NRA is age 65. How much can he withdraw as an in service withdrawal? Thank you

Is tax withholding required on in-service withdrawals? I cannot find the definitive answer.

So, Plan participants cannot exercise personally owned stock options using their Plan Investment Account. Can a Plan Investment account be a recipient of the stock options when they are granted?

I'm not sure, yet. The sponsor has a VALIC document and VALIC funding, so it leads me to believe they might have VALIC Plan Administration. Obviously, the plan sponsor did not know exactly what they were getting into with repect to filling requirements.

Thank you, dcoderre. This info has been VERY helpful. We are contacting VALIC, it's possible the 5500 were thier responsibility. If not, the DFVC program for 501©(3)'s sounds like a good cost break.

Thank you, dcoderre. Is there a remedial program you would recommend for this Plan?