masteff

the last two posts are commercial spam and should be deleted (I found this because the last person added spam today to a different thread)

I'd argue that an employer/plan sponsor has a higher level of duty than TPAs. At my former job (4 DB & 4 DC plans w/ roughly 6500 combined participants), we always relied on our plans verbage about "properly completed on the proscribed form". We then had a basic checklist that our file clerk used to review each form for a minimum level of completeness. Basically it boiled down to proper spousal consent, sufficient info on the beneficiaries, and the minimum info from a trust if such was designated.

I've been critically aware of the future cutback for a couple years because that just so happens to be the year I'll reach full SSA retirement. Trust Fund FAQ: http://www.ssa.gov/OACT/ProgData/fundFAQ.html Trust Fund balances since 1957: http://www.ssa.gov/OACT/STATS/table4a3.html

it's a bad translation from babelfish but as the old saying goes... apenas porque usted es paranoico, no significa que alguien no está hacia fuera conseguirle (just because you're paranoid, doesn't mean someone isn't out to get you)

It's a union plan... I'd make him go thru the union to work w/ the PA to resolve the issue. Specifically he needs them to point out to the PA that they're out of line (how can he work at least most 40 hours if he doesn't have his license?).

No. http://www.irs.gov/pub/irs-tege/rollover_chart.pdf

A quick review of Sec 201 of WRERA shows it did not override the provisions of 402© that do allow only part of a distribution to be rolled over (with the remainder to be taxable). So, yes, he can do an indirect rollover of part of it. Note: you only want to issue a payment to the participant... direct rollovers are not permitted for this so don't even entertain the splitting of the payment itself.

So all HCEs who hit the comp limit were cut off regardless of the 402(g) limit? Sounds like an adminstrative practice. Unless the plan is very clear that you shouldn't cut off, then I'd be reluctant to open the can of worms of a correction. If you want to change it, I'd change the practice prospectively into the future and not backwards.

On that note, I've wondered if this forum makes adequate use of the "! Report" button in the lower left of each post which allows a user to flag a post for review by a moderator. I've tried to make use of that when a post has a commercial link hidden in a signature. But results (ie a moderator having taken a visible action) have varied.

You've just created a catch-22. The particpant can't take the withdrawal if the fee isn't paid but the fee can't be included in the withdrawal. Clearly (at least to me) making the participant pay the fee outside of the withdrawal would be increasing the participant's hardship need. To use your numbers... was the participant's actual hardship need $5,075? if so then your withdrawal fails to fully address the participant's need and thus the hardship would continue to exist. While grossing up the hardship need for the amount of the admin fees may not be 100% safe harbor, I would strongly argue that it is none-the-less necessary to properly address the hardship.

You're lucky if you can get more than 1/3 of those eligible to show up in an off-year. What will the consequence be if only 164 of the 492 are properly elected?

I thought that designating the estate could have the undesireable consequence of exposing the account to the decedent's creditors. So by having a default that is approximately the same as most states, then you have nearly same effect but bypass the creditors. The DuPont case that John mentions reminds me of a plan change we added at my last employer... a provision that beneficiary designations become void in event of a divorce (so if the EE really wants the ex to get money, then have to submit a new designation after the divorce). Something to think about anyway.

It's not uncommon, especially with a self-funded plan. Just depends on the payroll system and the accounting needs of the employer; I can do several "accounting-only" calcs inside my payroll system. Generally you can do calcs based a rate table or based on factors like salary/payrate, age and years of service. Since a self-funded plan isn't receiving a premium invoice from an insurer, the payroll system is the best/easiest place to determine both EE and ER cost/liability. In fact some large companies do self-billing on some insurance, meaning they calculate and remit the premium to the insurer and the insurer accepts their computation; a well-programmed payroll system is essential for that. Because even if they don't fund the ER portion until later, accounting standards require them to estimate their potential liability (especially if an ER contribution was used in rate setting for the self-funded plan). And since they presumably are using a VEBA, they may not fund by pay period because of the various rules that complicate tax deductibility of VEBA funding. Back to the question at hand, I presume you're referring to the Sec 125 concentration test? Ignoring for a moment any possible side discussion of whether ER contributions should even be used in the conc test, if the ER amount is not funded, how do you justify it as a contribution for use in the test?

Correct. Presumably the IRS will issue something to superceed Q&A-14 of Notice 07-07.

I'd had to look back at that myself. The plan in that thread had a survivor contingency clause that the spouse had to live at least 150 days past the participant. This falls w/in the provision of the 401(a)(9) regs that allow the designated beneficiary to be determined as late as Sept of the year following death. http://benefitslink.com/boards/index.php?s...c=43782&hl= A key question to me would be whether the account had been transferred or redesignated to the spouse (or if the plan provisions provided that it should have been done already even if it hadn't). Then you'd look at whether the spouse died before Sept of the year following the employee's death. If not, then for me, it's open and shut that it's spouse's estate.

Correct. The 60-day rule provided in 402©(3) explicitly references ©(1) which applies to distributions "paid to the employee". As for surviving spouses and alternate payees, 402©(9) and 402(e)(1)(B) say the rules of subsection © apply to those persons respectively as if they were the employee. Nonspouse beneficiaries are handled in a different manner in 402©(11). No, that's the point of Appleby's two posts above (especially the McKay Hochman article that's linked). But "rollover eligible distribution" is not the same as being eligible for a 60-day indirect rollover.

If the plans are unrelated, then each plan calculates catch-up separately. So while the extra $5,500 counts as catch-up with respect to her personal taxes (for purpose of determining excess deferrals), it's not classified as catch-up by the plan unless regular deferrals IN THAT PLAN have exceeded the regular 402(g) limit. To put it in different words: plan A doesn't care what happened in plan B, except to help the participant not have excess deferrals in total.

Double check how the plan is now worded but generally speaking, between $1K and $5K you'd need participant consent but not spousal.

My thoughts: 1) does the wording of the exclusion of Roth from loans more clearly apply to loan distributions or to the entire processing of loans? 2) does the plan or loan policy define "account balance" as it would pertain to the loan calculation? (Remember, you read it as an average prudent person would read it, don't stretch to infer any meaning that's not reasonably evident.) If the exclusion is in the context of the distribution of funds and if "account balance" is undefined or does not clearly exclude Roth, then use the full balance for applying the 50% limitation. So the lesser of 50% of total balance or 100% of non-excluded funds.

No. No more than it's "made available" to any other participant after termination of employment / retirement.

1) What type of plan? DB, DC, ? 2) What does the plan document say? Generally speaking, if it stays in the plan, then it's not a distributable event for tax reporting purposes. She simply becomes a restricted participant.

In 1996, HIPPA created portability between group health ins plans (the specific mechanism being that creditable coverage has to be counted toward pre-existing condition exclusion periods). But it doesn't force individual health plans to do the same (other than conversion coverage after COBRA has expired). However, check w/ your state's department of insurance to verify if your state has more favorable rules. You might find this webpage from AARP helpful: http://www.aarp.org/health/insurance/artic..._insurance.html My opinion: In addition to talking to an insurance broker in the state where the person lives, you might help him look into any associations that he might be eligible to join that may have group health plans for members. For example, I'm a member of my state's accounting society and was able to get affordable coverage thru them when I was unemployed; w/ proof of creditable coverage (aka, HIPPA certificate) I was able to avoid pre-existing condition exclusion. Oh, and be sure the broker, insurance agency, etc, knows that he's had continuous coverage. He may not need a plan w/out an exclusion period so much as a plan that will credit his prior coverage. EDIT: Pre-existing condition clauses usually only look at diagnosis/treatment during a specific time period prior to starting the new coverage. So if he's not had treatment/etc related to the car wreck recently, then it may not actually count against him. The real trick is to get full and complete information from the insurer about how they handle it, so he can determine if it really would apply.

This looks to be the best answer of those above.

Is this legit in a qualified plan? Good question... you made me look! Reg § 1-409(a)(9)-4 Reg § 1-401(a)(9)-4 From Q&A-1: "A beneficiary designated as such under the plan is an individual who is entitled to a portion of an employees benefit, contingent on the employees death or another specified event." (emphasis added) From Q&A-4: "the employee's designated beneficiary will be determined based on the beneficiaries designated as of the date of death who remain beneficiaries as of September 30 of the calendar year following the calendar year of the employees death." Sounds okay to me, at least based on the MRD regs. I concur w/ Bird. IMO, this is in closer agreement w/ discussion of orphaned plans on the IRS website and in EPCRS. But I'd double check how the plan sponsor is specfically defined in the plan text. I bet any number of other investment firms would love to have this plan since Vanguard doesn't seem to want to keep your client as a customer.

Could you please elaborate on what "survival contingency feature" you mean? We might be able to suggest alternatives. But a PSP has more expenses than an IRA does (recordkeeping, reporting, etc). Investment firms generally waive IRA annual account fees with a balance greater than $25K to $50K. Unless the PSP has unusual assets w/ unusual fees, then most of the fees would go away w/ the PSP.