masteff

Ditto. Jump thru the hoops to keep a good reference. Especially since she's been notified in writing that failure to attend will result in suspension, unless they're grossly violating their own policies and procedures or if your wife is working under an employment contract that says otherwise, they can do such.

waid10 - you're way overthinking it. You couldn't care less what happens in the IRA because you're not responsible for the money once it's outside your plan. (The technical answer is she'll have to start taking MRDs next year on the monies rolled over this year. But again, that's not your concern. Reg 1.401(a)(9)-7 Q&A-2)

At least part of it comes from the sham transaction doctrine. Google: sham termination irs One Google result provided a link to an interesting PLR: http://www.irs.gov/pub/irs-wd/1147038.pdf Skip to paragraph on the next to last page that starts "We have concluded". Also look 2 paragraphs above that at the cite from the proposed regs preamble. If you search this board for the word sham, you'll find a couple of relevant threads. For example, this one might be interesting reading: http://benefitslink.com/boards/index.php?/topic/43314-employee-termination-and-rehire-for-rollover Among other discussion, it cites a case in which IRS said a 4 month break was acceptible. And in response to item #3 (on pages 2-3) here: http://www.americanbar.org/content/dam/aba/migrated/jceb/2006/JCEBQAwithIRSfor2006.authcheckdam.pdf the IRS uses the term "bona fide".

Reg 1.401(a)(9)-2 Q&A-4 says "Lifetime distributions made before the employee's required beginning date for calendar years before the employee's first distribution calendar year, as defined in A-1(b) of § 1.401(a)(9)-5, need not be made in accordance with section 401(a)(9)." So, if the person hasn't retired, meaning they haven't triggered their RBD, then you don't have to count a distribution as an MRD at the time of distribution. But see the following... Asked and answered, see the last several posts date in 2013 here: http://benefitslink.com/boards/index.php?/topic/47337-rmd-and-in-service-distribution/

I was skipping the issue of common law unless someone else went there... For the sake of consistency, depending on the relevant state's law on common law marriage, I'd probably have a very basic form for them to both sign: "We, ___ and ___ are common law married in the state of ____". The benefit they're receiving is sufficiently valuable enough (or they wouldn't be trying to get said benefit) that they should be willing to put it in basic writing. If everyone else has to produce a document, why can't/wouldn't they sign one form?

I think it's simply a traditional IRA contribution being done via that particular account, rather than a special type of SEP contribution. I presume you've researched Code section 408(k)? http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-SEPs-Contributions "If I participate in a SEP plan, can I also make tax-deductible traditional IRA contributions to my SEP-IRA? If the SEP-IRA permits non-SEP contributions, you can make regular IRA contributions (including IRA catch-up contributions if you are age 50 and older) to your SEP-IRA, up to the maximum annual limit. However, the amount of the regular IRA contribution that you can deduct on your income tax return may be reduced or eliminated due to your participation in the SEP plan." Might also look at the following: http://www.dol.gov/ebsa/publications/PayrollDedIRAs.html

I didn't explain myself, sorry. Where is it in law that it's 20% withholding for plan distributions vs 10% for IRAs? Is that in ERISA? And your statement is 1/2 wrong: qualified plan and 403(b) annuity distributions that are rollover eligible are subject to a minimum of 20% MANDATORY withholding while distributions that are non-rollover eligible are subject to 10% withholding that can be elected out of. It's IRC section 3405© (reg 31.3405©-1).

What BG said. Edit: the following is from an education related website but gives you a good idea of state SSN law: http://www.dataqualitycampaign.org/files/SSN%20protection%20laws_CHART_02%2021%20for%20posting.pdf In really big companies, you start having people with same names, so an ID number is helpful to distinguish. But really big companies have already switched to their own unique ID numbers and put those on statements in lieu of SSN.

Also depends on what you mean by "track"? As for once the money is outside the plan, EGTRRA made rollovers nearly universal so no longer need to use a conduit IRA to keep a QP rollover separate from other IRA funds.

Might I suggest:

Hopefully, you're not doing a true-up 8 years late! I struggled wording that! hmm... "for the one person, 8 years from now, who terminates and disappears!" In the year 2001, I was cursing a plan decision made in mid-80's and vowed to do my best to not be cursed at by some future schmuck who had to fix my oversight.

I like the board's feature of "new reply, see it now?" as I was about to post nearly the same thing I wrote in that other thread. I believe that the cost break down from the school's financial aid office should have it as separate line items. That's certainly where I'd start. You could also look at the cost of a meal plan in student housing.

If the payroll system is sophisticated enough, it's possible to do a running true-up. But it's generally custom code because the calc requires knowing YTD match from the prior period and and most payroll systems don't automatically pull prior period data into working memory. And I don't know without looking if you can have a last day rule on a true up... otherwise you have the minor risk of true ups to already distributed former employees. Then you'd want to check the plan's deminimis distribution rules (or modify it for true ups) so you don't get caught up in automatic rollovers for the one person who terminates and disapears 8 years from now.

This thread may be of help: http://benefitslink.com/boards/index.php?/topic/21111-top-heavy-testing-wrollovers/

Or you could 1) talk to your union and 2) contact the Wage and Hour Division, the NLRB and the EBSA of the DOL. These only cost you a phone call versus hiring an attorney. You should be asking your main union office to explain how and why the local rep was able to enter into an MOA without ratification by the membership. Of course if it's been done that way for over 20 years then you likely don't have a valid grievance, but never hurts to try. Also, you're talking about a union plan, possibly a Taft-Hartley plan, which means some rules are likely different. I'm not going into the deep end of that pool.

Don't jump to conclusion based on your state's laws. This is common in other jurisdictions. I worked at a corporation with employees in Louisiana and had a rare few that didn't settle the property until years later when one of them approached retirement age (meaning QDROs a dozen or more years after the divorce).

This thread may help: http://benefitslink.com/boards/index.php?/topic/51399-severance-from-employment/ Here's notice 2002-4, severance from employment is under section III. http://benefitslink.com/src/irs/notice2002-4.html You could put it on the attorney to write a short memorandum for your files documenting how the transaction complies with "relevant IRS guidance including but not limited to Notice 2002-4". A key question is will the employees of the company continue to be covered by the 401(k) plan after the transaction. As to the plan's language, the biggest thing is that it no longer says "separation". If in doubt, call Sungard Corbel and ask about "severance" vs "termination". As to your control group question: is the new employer related in relevant way to the other participating owners? If not, then the company falls out of the control group after the transaction.

Based on leevena's comment, my two cents is that just like the special tax notice advises participants to consult a competent professional tax advisor, any employer write up on this might want to advise to consult with the state exchange on how the subsidy rules apply to their particular personal circumstances.

If I was still in day-to-day plan administration, whether it's same-sex or common-law or some other uncertainty, I would be handing any such scenario over to an ERISA atty. Especially if competing claims arose. Saying that does remind me of one claim we processed involving common-law. I don't recall the details... because we handed it over to the ERISA atty.

No, the kinship laws that pertain to cousins also restrict closer blood relation marriage (which cover parent/child, siblings, etc). http://en.wikipedia.org/wiki/Consanguinity Edit: for example, Oklahoma law has the broad catch all of "Marriages between ancestors and descendants of any degree". But it does have a list of gender specific relations which leaves a few problematic combinations (if same-sex wasn't entirely banned and not recognized). Edit 2: except of course, most of the reason that 1st cousins were added to the "don't marry" list was to reduce birth defects given growing populations and the greater availability of potential mates. While some might argue moral reasons to prevent, say uncle-nephew marriages, there's no genetic reason..

Here's a relevant news article: http://www.usatoday.com/story/news/nation/2013/06/28/stateline-gay-marriage-states/2471965/ "What's more, the federal Defense of Marriage Act's Section 2, which is still on the books despite this week's ruling, allows states to refuse to recognize marriages performed elsewhere. And many state laws banning gay marriage block the state from recognizing same-sex marriages, much as the DOMA law allowed the federal government to do before Wednesday's ruling." GMK - Oh yeah, a number states totally refuse other state's cousin marriages. http://en.wikipedia.org/wiki/Cousin_marriage_law_in_the_United_States_by_state http://en.wikipedia.org/wiki/Cousin_marriage_court_cases_in_the_United_States And criminal laws against bigamy/polygamy have Supreme Court level case law dating back 135 years! http://en.wikipedia.org/wiki/Reynolds_v._United_States

If you're genuinely worried about throwing up red flags, it hurts nothing to add a valid note explaining something unusual on a return. Admitted, it's been 15 years, but I was taught that the IRS computer kicks out items for human review, which is where the note comes into play. Anticipate the right question and you can (often but no guarantee) prevent further review or audit.

1) Not "allowed" by who? I presume it's not a unionized plan? We had a union where the CBA excluded its trainee work program from benefits. 2) Does the plan have an age 21 requirement? It might be hidden under a different heading than eligible service and excluded persons. 3) Could anything in the hiring paperwork signed by the students constitute a waiver to benefits? (I don't know the exact rules on such waivers, but they can be valid if done properly.) It's also possible that someone has taken a different exclusion, perhaps from a group insurance plan, and wrongly assumed it extends to all other benefits. At a previous employer, we had this exact issue (but w/ 12 month eligibility). If the students did a 2nd internship or were hired full time, because they'd have a break in service of less than year (resulting in the break being ignored), they would enter the plan either immediately or very quickly. A fresh copy of the SPD was usually enough to educate the appropriate managers..

Of course, "we" (the retirement plan community as a whole) have allowed plan loans to reach their illogical conclusion via multiple loans and refinancings. I think I've said it once before but the one time I personally used a plan loan (to finance some minor remodeling on the home I'd just bought), I viewed it as a piece of my portfolio and adjusted my investments accordingly. If you look at model portfolios, even the most aggressive suggest you hold a % in bonds/stable value, so I simply viewed the fixed return on my plan loan as fulfilling that %.

Challenge accepted: http://www.nber.org/programs/ag/rrc/NB09-05,%20Beshears,%20Choi,%20Laibson,%20Madrian.pdf It appears to be primarily via the mechanism that BG notes... higher participation and deferral rates due to access to the money.