masteff

An informative prior discussion: http://benefitslink.com/boards/index.php?showtopic=39019

Did the original participant die before or after their required beginning date? If it was before, then yes, the spouse could use the 5-year rule. And the way I read form 5329, it's not that the tax would be waived but that it simply wouldn't be due because the MRD would be taken by it's due date, ie by the end of 5 years. If you're unsure or it's after, you might post the details (ee and spouse's DOBs and ee's date of death), in case we can spot something you're missing.

Rajeev should have linked to the most recent amendment to 80-26 which removed the 3 day limit.... http://benefitslink.com/links/20060407-043459.html http://www.dol.gov/ebsa/regs/fedreg/notices/2006005075.htm

I think the original notion might have been a slight misinterpretation of Notice 98-4, Q&A G-4. The employer only establishes an account if the EE is entitled to a contribution and refuses to set up an account. And note the words "may execute", not "must execute" Q. G–4: What if an eligible employee is unwilling or unable to establish a SIMPLE IRA? A. G–4: If an eligible employee who is entitled to a contribution under a SIMPLE IRA Plan is unwilling or unable to establish a SIMPLE IRA with any financial institution prior to the date on which the contribution is required to be made to the SIMPLE IRA of the employee under Q&A G–5 or G–6, an employer may execute the necessary documents to establish a SIMPLE IRA on the employee’s behalf with a financial institution selected by the employer. http://www.irs.gov/pub/irs-irbs/irb98-02.pdf EDIT: it's also discussed in Q&A K-2 Q. K–2: When must a SIMPLE IRA be established for an employee? A. K–2: A SIMPLE IRA is required to be established for an employee prior to the first date by which a contribution is required to be deposited into the employee’s SIMPLE IRA (see Q&As G–5 and G–6).

Doesn't this fall under the FSA topic of "experience gains" which are covered in Reg 1.125-5(o)? But then you have to determine if you're an ERISA plan because then you have to consider the exclusive benefit rule. See the last comment here: http://benefitslink.com/boards/index.php?showtopic=38942 I've also found other articles that express the same concern.

I think the 12/31 of the prior year thing primarily applies if it's being treated as a distribution from an individual account plan, such as is provided for in Reg 1.401(a)(9)-6 Q&A-1(d)(1). I'm only passingly knowledgable w/ DB MRD's so I won't try to guess at which methodology you should use.

From IRS Code Sec 408(p)(2)(D): "An arrangement shall not be treated as a qualified salary reduction arrangement for any year if the employer (or any predecessor employer) maintained a qualified plan with respect to which contributions were made, or benefits were accrued, for service in any year in the period beginning with the year such arrangement became effective and ending with the year for which the determination is being made." The 401(k) comes into existence on 1/1 and means you can't have a SIMPLE for 2012. Your deposit is for a benefit accrued in the SIMPLE for 2011. Don't overthink it.

A few recent discussions on various issues w/ life ins in a DC plan: http://benefitslink.com/boards/index.php?showtopic=50199 http://benefitslink.com/boards/index.php?showtopic=49860 http://benefitslink.com/boards/index.php?showtopic=49448 http://benefitslink.com/boards/index.php?showtopic=48297 http://benefitslink.com/boards/index.php?showtopic=47082 http://benefitslink.com/boards/index.php?showtopic=43294

The govt reserved the right to go after criminal charges even after a voluntary correction... The VFCP says: (5) Criminal investigations not precluded. Participation in the VFC Program will not preclude: (i) EBSA or any other governmental agency from conducting a criminal investigation of the transaction identified in the application; (ii) EBSA's assistance to such other agency; or (iii) EBSA making the appropriate referrals of criminal violations as required by section 506(b) of ERISA. http://www.dol.gov/ebsa/regs/fedreg/notices/2006003674a.htm

What I'd like: not too difficult for an average user to figure out, can be installed on multiple computers (or a server) so each user can prepare their own exp stmt (web-based would be acceptible too), multi-currency would be nice but at least be able to designate a currency for each report, if it has "mgmt approval" features then those can be bypassed, and, not expensive (either onetime purchase or minimal per use fee). I've looked online: most spreadsheets are too simplistic or too confusing for the average user and most software is too expensive per user or wants to charge for months even when you don't use it. Please post or message me with any suggestions. Thanks!

As do some other members of the board... it's been kicked around a few times: http://benefitslink.com/boards/index.php?showtopic=48358 If I remember correctly, part of the argument to allow it has to do with state's laws and payroll deductions, but then the can of worms really opens up with preemption, bankruptcy law, etc.

As said above, he can't "change" the loan. But nothing in the world to say he can't take a valid hardship distribution (assuming the plan provides for such and he otherwise qualifies) and in a completely unrelated transaction repay his loan in a lump sum payment. Be sure you get proper documentation to support the hardship distribution. (Note: and having an existing loan is generally a requirement for a hardship so we already know he's got that requirement covered!)

Sounds like a foot race between getting the land sold and the local tax assessor taking action. Might call their office to find out their standard time table.

But to clarify what pmacduff cited... it would only have delayed it, not avoided it. Since you can't delay because of the planned termination, she could delay by rolling in full to an IRA prior to 12/31 of this year. But she'd still have the same number of distributions and same amount of MRD in the long run.

FWIW - I'd have started a new thread since ESOP is just enough different. That said.... 409(o)(1)(A)(ii) {emphasis added}: "which is the 5th plan year following the plan year in which the participant otherwise separates from service, except that this clause shall not apply if the participant is reemployed by the employer before distribution is required to begin under this clause"

Be sure to evaluate to what extent any of the time is really a "settlor" expense which the DOL says the employer should pay.

I suspect part of the interpretation that only employer money need be repaid comes in part from Reg §1.411(a)–7(d)(4)(v) "In the case of a defined contribution plan, the employer-derived accrued benefit required to be restored by this subparagraph shall not be less than the amount in the account balance of the employee, both the amount distributed and the amount forfeited, unadjusted by any subsequent gains or losses. Thus, for example, if an employee received a distribution of $250 when he was 25 percent vested in an account balance of $1,000, upon repayment of $250 the account balance may not be less than $1,000 even if, because of plan losses, the account balance, if not distributed, would have been reduced to $500." But that shouldn't outweigh the earlier wording about "restored upon repayment to the plan by the employee of the full amount of the distribution". Rather, it merely speaks to just the employer-derived benefit since only the employer-derived benefit could be subject to forfeiture; ie, it says the plan must restore the entire amount forfeited, not a cent less. (And if we go down the track of "well, what's actually considered to be "the distribution" in this section of regs?", we find "distribution of the present value of his nonforfeitable benefit" and we know from the 401(k) regs that deferrals are immediately nonforfeitable so they are included in "the distribution" being discussed by the regs. We also know from 411 that in a DC plan, the accrued benefit is the amount in the participant's account, which included deferrals.)

I concur, but document it by getting proof from the EE that it's being treated as an excess deferral on their taxes and by the IRA.

If the deceased's estate has been disbursed to any/all heirs, I'd say "it's only $4" and let it go to the person(s) who got the remainder from the estate. Code Section 691: "C) the person who acquires from the decedent the right to receive the amount by bequest, devise, or inheritance, if the amount is received after a distribution by the decedent’s estate of such right." It might not be the 100% correct way to do it but it's only $4. Of course, how did the account end up w/ a mere $4 in it? Was there a full distribution and this was subsequent income that posted? Often times, subsequent income like that is paid in the same way as the preceeding full distribution (residual balances are such a pain!). Which might put the $4 into a rollover IRA (presuming that account hasn't already been split to its bene's). Prior discussions reached consensus that can't write off small balance like this: http://benefitslink.com/boards/index.php?showtopic=49009

One thing similar that comes to mind is in the half-month convention in depreciation accounting which says an asset is placed in service only if it's on or before the 15th of the month. Perhaps he's just crossed a wire?

I'll go along w/ that. Especially if you compare 3115 to form 5308 (which is specifically related to plans) http://www.irs.gov/pub/irs-pdf/f5308.pdf (Instructions for 5500 mention certain instances where have to get permission to change plan year, so I went searching for a form to do that.) Not to mention the only hits on "plan" in the 3115 form and instructions is in the word "explanation".

Does that require a Form 3115?

You might read the examples: http://www.irs.gov/pub/irs-drop/n-10-38.pdf (subject of course to FGC's comment above) A stepchild is a child under Sec 152(f)(1).

jpod's more right w/ 404 than he may realize... Sec 404 is entitled: "Deduction for contributions of an employer to an employees’ trust or annuity plan and compensation under a deferred-payment plan" As ETK says, elective deferrals fall under the part about "compensation is paid or accrued on account of any employee under a plan deferring the receipt of such compensation".

I have no real experience w/ MPP so sorry if this is a stupid question: can participants in an MPP start installment payment for one dollar amount and then elect to change that dollar amount at a later point? Perhaps we need more info on the types of changes the participant is permitted to make? I'm reading the scenario as: Participant is sent retirement packet which includes both spousal consent and benefit election. Later, participant wants to change the amount of the installment payments so the plan sends a form specifically for changing installment payment amount. And the question is: does the latter form require spousal consent. Correct? Off the top of my head, reading 417(a)(2), I say: 1) it depends on what the consent says as to future changes and 2) I'd think a change in amount would not be a change in form of benefit so a new consent isn't absolutely required. Of course a new consent is always a nice "CYA".