E as in ERISA

But if lgolden is in a debate with someone on this issue, he needs to be aware that there is legislation that may still technically be on the table (e.g., NESTEG?) that includes lump sum rate reform. He needs to instead emphasize the other points you are making: that it will likely have a delayed effective date and/or will not be passed this year.

Doesn't it depend on what he means by "pending legislation"? Are you only talking about HR 3108? Isn't that just a temporary fix? And isn't it very likely that permanent legislation will in fact include provision for rates that would affect lump sums? And, in fact, didn't one or more of the bills introduced last year -- which may technically still be on the table -- address lump sums?

I think that its clearer in a stock deal than an asset deal.

It depends on the form of the transaction and how it affects crediting of service.

I don't think that they get forfeitures. See http://www.irs.gov/retirement/article/0,,i...9878,00.html#A5

I think that Tom Poje pulled the cover off Blinky and revealed that he actually looks like this: http://www.stupid.com/Merchant2/graphics/p...inky_beauty.gif

I don't have Derrin's book either. He seems very generous with the number of Q&As he has posted: http://benefitslink.com/modperl/qa.cgi?db=qa_who_is_employer I usually go to the corp tax people for the first pass on these types of rules.

Just joking, AndyH.... I thought that five minute dealys were the new standard for awards show (e.g., Grammys, etc.) ...

Is someone going to make sure that there is a five-minute delay on postings here?

I think that it may be a loophole that the IRS just confirmed in Rev. Rul. 2004-12: "However, a distribution of amounts attributable to a rollover contribution is subject to ... the additional income tax on premature distributions under § 72(t), as applicable to the receiving plan. Thus, for example, if a distribution from an IRA is rolled over into a plan described in § 401(a), any distribution from the § 401(a) plan of amounts attributable to the rollover would be subject to the exceptions from the § 72(t) tax that apply to § 401(a) plans and not the exceptions that apply to IRAs." There is a special rule for 457 plans in 72(t)(9), but I see nothing for 403(b)s.

A lot of those Q&As are posted on this site. Maybe this one? http://benefitslink.com/modperl/qa.cgi?db=...employer&id=113

I know what you're saying. I haven't particularly researched it. I'm only repeating what I've been told --- but it was on very good authority... So the way I've interpreted it, is that the "denominator" for coverage testing purposes -- the total employees within the group -- is naturally allowed to change as a result of the transaction. However, the numerator -- the number of employees that would qualify for the plan -- doesn't change solely as a result of the transaction. It depends on the plan terms.

Making decisions about distributions of plan assets is a fiduciary function. Performing ministerial functions in regard to distributions is not. If they are going to start questioning the Trustee's directions and making decisions on their own, then they may now be a plan fiduciary with all the attendant liabilities (for both their own acts and those of co-fiduciaries). Are they trustee for other plans? So the procedures they are citing apply to those plans? Or do they have a SAS 70 auditor who doesn't know the difference between a trustee and custodian?

I'd deem. Consider a slightly different fact situation: The cure period ended December 31, 2003, and the termination occurred in 2004. I think you'd have a 2003 taxable event that you'd need to report. I don't think that the fact that you failed to flag it as deemed in the recordkeeping system changes that.

My understanding has always been that the issue is whether the plan by its terms would cover the additional employees coming into the group as a result of the transaction. For example, Corp A sponsors Plan B. It defines the employer as all companies within the controlled group, and all employees of the employer are eligible. When Corp A purchases Corp C, then the plan by its terms covers employees of Corp C. There's no free pass. The 410(b)(6)© exception doesn't work because you have a significant change in the coverage...based on the terms of the plan itself. Compare that to a situation where Corp X sponsors Plan Y. It defines the employer as Corp X and all employees of the employer are eligible. When Corp X purchases Corp Z, there is no change in the coverage of the plan. The 410(b)(6)© exception applies. (It also works if the plan defines the employer as all companies in the controlled group that are "adopting employers" -- if Z doesn't adopt the plan). If you have the first situation (Corp A with Plan B), then it needs to be amended prior to the transaction.

If the plan provides for an "offset" at termination, then I don't think that you'd have to wait until the end of the cure period. The cure period only applies for purposes of the "deemed distribution" rules. If under the plan you have an "actual distribution" in the form of an "offset," then the loan would never even go into default and the cure period wouldn't apply. So it would then be possible to have a 2003 Form 1099-R. But in my experience the wording of the loan policies is often awkward -- and its not always clear which occurs first, the offset or the default. E.g., some plans don't have the offset immediately -- they might wait until a cash distribution or something. Then the deemed distribution rules might kick in first.

The money has to be in the trust by the 15th day. However, it may be deposited in a general account of the plan. It may not be invested and show up on participant records until a later date. In many cases that occurs simultaneously with a delayed payroll or within a few days of a concurrent payroll. Longer time periods may be unusual, but are not necessarily a violation of the 15 day rule.

I think he makes a concerted effort to make it the most comprehensive source there is. He often takes notes during conferences on a question or two that he has not yet considered....so that he can potentially update outline.

The 404 deduction limits no longer exclude elective deferrals.

As a result of EGTRRA, Section 403(b) arrangements are eligible plans for rollover purposes. See § 402©(8)(B)(vi). Also see the preamble and updated tax notice in http://benefitslink.com/IRS/notice2002-3.shtml

What type of "claim" are you talking about? Normal retirement benefits would generally be paid out beginning at normal retirement age (if not sooner) without action on the part of the participant.

The taxation is based on the terms of the plan and the application of Section 72, if necessary. A simple example would be where the participant vests in a balance of $100,000 in year 10. The employer and participant may agree that the obligation will be satisfied with an annuity payment of $12,325 a year (over the following 10 years). But I don't think that any calcs would be necessary for tax purposes. The participant would be taxed on the $100,000 in year 10, because that is the stated amount in which he vests in year 10 under the terms of the plan. The timing and amount of cash payments aren't relevant for tax purposes. Now I understand that you have a different situation -- where the participant may vest in year 10 but the cash will be received in installments. But the same logic applies. The timing and amount of the actual cash payments aren't determinative for tax purposes. You apply Section 72 to the terms of the plan. I would typically see this done by an actuary or consultant. But whoever does it, just make sure they calculate the taxable amount under 457(f), based on the terms of the plan and the Section 72 rules...

Yes. You allude to the fact that this isn't a straight 105/106 plan because there are these cash payments. So if this isn't a straight 105/106 plan, then maybe it doesn't satisfy the contractual obligation to provide $.25 of HEALTH benefits either? If not, then they probably better change the arrangement....

Of course, if you only want the ruling to apply prospectively, then there is no deadline and you don't need to file within the original remedial amendment period.....

Under 401(b), the remedial amendment period would generally end on the due date (with extensions) for the employer's tax return for the year in which the amendment occurred. It's my understanding that you need to file the Form 5307 by that date if you want to extend the remedial amendment period further.