masteff

Yes. Notice 2010-84 Q&A-2 as modified by Notice 2013-74. http://www.irs.gov/pub/irs-drop/n-10-84.pdf The error you make in the portion of the notice you quote above is that particular Q&A is in specific reference to Code § 402A©(4)(E) which applies explicitly to amounts "not otherwise distributable under the plan".

EE could also endorse the check over to the employer w/out having to go to the bank. In the endorsement area, she can write "pay to order of: xyz co." and then sign. The company then endorses and deposits as to their bank.

Refer to Reg 1.416-1 See Q&A T-12 ("at anytime during the plan year") and T-16 & T-17 ("not a corporation ... capital or profits interest").

I'll 2nd this suggestion. Escalate to a supervisor. The supervisor needs to know the agent is actively challenging backdating (presumably) w/out reason. This sounds like a fishing expedition, not an audit.

Then your answer is the first one above: the 50% restriction is at the time of the loan. The plan technically has a note which is an asset equal to the outstanding balance of the loan. If either made a full distribution today, you would distribute 1) their current investment balance and 2) a taxable event for the unpaid balance of the loan.

This will tell you how many passed by Congress in total but doesn't break out tax vs other. https://www.govtrack.us/congress/bills/statistics Maybe one of the tax watchdog groups will have what you're looking for?

IRS Reg 1.401(a)(9)-6 Q&A-12 says in part: "Q-12. In the case of an annuity contract under an individual account plan that has not yet been annuitized, how is section 401(a)(9) satisfied with respect to the employee's or beneficiary's entire interest under the annuity contract for the period prior to the date annuity payments so commence? A-12. (a) General rule. Prior to the date that an annuity contract under an individual account plan is annuitized, the interest of an employee or beneficiary under that contract is treated as an individual account for purposes of section 401(a)(9). Thus, the required minimum distribution for any year with respect to that interest is determined under §1.401(a)(9)-5 rather than this section. See A-1 of §1.401(a)(9)-5 for rules relating to the satisfaction of section 401(a)(9) in the year that annuity payments commence and A-2(a)(3) of §1.401(a)(9)-8." You should refer the reg for more details about how the account balance is determined for purposes of minimum distributions. You will likely need to consult with the annuity provider. You can then refer to Reg 1.408-8 in which we find the rules about aggregating IRAs (Q&A-9). That reg also specifies in Q&A-1 that "For purposes of this section, the term IRA means an individual retirement account or annuity described in section 408(a) or (b)." You will need to conclude for yourself how the rules apply to your specific situation. You might confer with your annuity account provider.

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Prohibited-Transactions

I think you're worrying about the word "only" when you should be worrying about the words "made available" which are in both the Code and Reg. Because of the plan termination, I see little room for you to argue that the entire account balance was not "made available" to the participant at the time of plan termination in accordance with the constructive receipt doctrine. Cross ref to Reg Section 1.451-2(a).

I wonder what the last year was that a 5500 was filed... it appears to have some effect on how far back the IRS can retroactively disqualify the trust. http://www.relius.net/news/TechnicalUpdates.aspx?ID=969

I strongly encourage that an attorney specializing in ERISA and qualified plans be retained (I am not an attorney, I do not play one on TV). You need someone with the specific technical expertise who can fully understand the specific circumstances of this situation and give targeted advice to mitigate adverse income tax consequences. If very much money is at stake, the tax and penalty can add up, so hiring the proper professional is a small price to pay.

AND... people such as the auditor in question look at the reg and presume that a salary reduction agreement for 4.375% is an annual self-imposed limit, rather than a per pay period payroll deduction. So they make faulty conclusions like, 4.375% * 255,000 = 11,156.25.

Point them to the Section 125 rules on permitted changes. Explain the rules come from the government, it's not merely something written in the plan documents. If necessary, explain the potential consequence of violating Section 125 is causing every deduction under the 125 plan for every employee to become after-tax, retroactive to the first of the year, plus penalties.

Only spot to squeeze thru is if she's buying it as a result of a casualty loss (normal wear and tear is not a casualty). And then it depends on how you read the reg which says "for the repair of damage to the employee's principal residence". Even if you went outside the safe harbor and used facts and circumstances, I'd have difficultly approving it w/out other factors (caring for an invalid relative, etc). Laundromats are less common than they were 20 years ago but I know people who use them regularly. Throw the IRS under the bus for having such a narrow definition of what counts as a hardship.

You may be like some of us who have trouble pasting into the reply window. See the solution here: http://benefitslink.com/boards/index.php?/topic/55213-cant-quote-or-paste-or-cant-edit-a-new-post-heres-how/ http://www.irs.gov/uac/Newsroom/Employer-Health-Care-Arrangements Okay, I see where you're tripping up on that. You have to go earlier in the sentence: "does not include". Everything after "an arrangement" is merely describing what is not included as an "employer payment plan". It is the "employer payment plan" that has become a violation. The IRS does add confusion with their usage of the terms "arrangement" and "arrangements".

Could you provide a link to the Q&A in question?

Yep, to my knowledge it's a common occurrence in companies with multiple plans. Just remember that some of the safe harbor hardship rules such as loan utilization and suspension apply across "all other plans maintained by the employer". This can be tricky if you have a semi-automated process that doesn't cross-apply the suspension. "(E) Distribution deemed necessary to satisfy immediate and heavy financial need. A distribution is deemed necessary to satisfy an immediate and heavy financial need of an employee if each of the following requirements are satisfied— (1) The employee has obtained all other currently available distributions (including distribution of ESOP dividends under section 404(k), but not hardship distributions) and nontaxable (at the time of the loan) loans, under the plan and all other plans maintained by the employer; and (2) The employee is prohibited, under the terms of the plan or an otherwise legally enforceable agreement, from making elective contributions and employee contributions to the plan and all other plans maintained by the employer for at least 6 months after receipt of the hardship distribution."

Sounds like what you are describing is technically not a conversion, but rather is an in-plan Roth rollover. http://www.irs.gov/pub/irs-drop/n-13-74.pdf

First thing that comes to my mind is to start putting all communications in writing. Writing a) leaves a paper trail and b) can invoke a different level of response as it may be seen by more than just the person who's being a schmuck. In fact, I'd write to their head legal counsel and specifically name the person who has been blocking your attempts to get clear information on how to obtain your lawfully awarded divorce settlement; including a copy of the settlement will make it hard for them to not look into it at least a little ways. If the amount is small enough, you might consider filing it in small claims court against your ex. The exact dollar threshold for small claims varies by state.

I'd forgotten until reading that example that we made rollover to the 401(k) an option on the de minimis cashout forms for our pension plans some years ago when I was in a corporate benefits department. As lalaland said, it is a way to make it easier for the participant. And retention of assets can be beneficial depending on circumstances.

1) As to the concerns above about the exclusive benefit rule, Reg 1.401-1(b)(4) says "(4) A plan is for the exclusive benefit of employees or their beneficiaries even though it may cover former employees..." 2) The discussion in this thread: http://benefitslink.com/boards/index.php?/topic/19665-terminated-employee-rollovers/ Includes the analysis by mbozek that "Also since former employees are participants they should be permited to make tax free rollovers under the BRF provisions." The discussion references Rev Rul 96-48: http://www.unclefed.com/Tax-Bulls/1996/RR96-48.PDF 3) I think Lou S hits on a key factor: whether the former employee still qualifies as a participant, which generally would mean they still have a balance in the plan. You should review the plan document w/ that question in mind.

You are partially incorrect. While the amount that can be distributed in a hardship is based on the amount of deferrals (and not earnings), you must allocate a portion of designated Roth account earnings to the withdrawal of designated Roth contributions. See Q&A-8 here: http://www.law.cornell.edu/cfr/text/26/1.402A-1

If you copied it correctly, then it clearly says "equally divided". That basically means 50/50. The thing to look at in the QDRO is what date it specifies for when the benefit is divided. It generally will be 50/50 as of the date of the divorce. On the 401(k), QDROs commonly say "plus or minus gains and losses through the date that the account is divided". End result is that she will get benefits that have a current value of about $5,000. If your stock and 401(k) is worth $5,000 or if you have enough other money to add in, you might be able to negotiate with her to not take any of your pension. You will have to decide for yourself what makes the most financial sense, both now and long-term.

Your search term is: posthumous qdro You'll find a few results on here which might shed some light. You might find the reg (especially the preamble) discussed in this article: http://www.seethebenefits.com/showarticle.aspx?Show=3458 See the 7th paragraph (starts with "Would..."). I think an initial question is who would the beneficiary be absent the DRO. If it's the same person, then you have the best case scenario. My perspective is that most case law on the topic exists because someone else thought they were entitled to the benefit (new spouse, children, etc). So it raises the following questions: Is someone other than the ex-spouse designated? Did the participant get remarried? Does the plan specify that designations naming the spouse expire upon divorce?

What does your attorney say?