masteff

Double-posted, respond in this other thread: http://benefitslink.com/boards/index.php?/topic/55607-judgement-and-qudro/

To expand that slightly... if the plan permits less than entire balance to be distributed, then one option is to leave a small amount (I'd suggest $5,000 to avoid any de minimis cash out issues) and the participant can continue making loan payments.

Did she literally "receive" it, as in a lump sum? Or was the QDRO merely "applied" to your pension. I would wager that they set up the QDRO in their system so that a) you see a reduced future benefit reflecting the effect of the QDRO and b) she may be able to see her future benefit reflecting the QDRO. Regardless of that, the provision regarding survivorship can be changed up to the moment that one of you dies. But as your new attorney explained, your ex will have to agree to it and you will have to pay your attorney to draft and file the revised DRO. If I'm reading correctly, the same thing was done to her pension as was done to yours... you might start by pointing out that as things stand, she won't get a lump sum either. Make it a win-win situation... if she agrees to the change then you both can get the lump sum when the time comes.

I'm sure the taxpayer, who was the subject of the tax court case referred to in that link, would disagree with your assessment that "it is fine to do this". If it was truly fine, then that taxpayer would not have had a court ruling against him. Mr Bobrow would point out to you that the IRS has in fact already enforced that rule against at least one person, him. You will have to decide for yourself how much faith you're willing to put in the IRS' statement that it will delay implementation of the new rule. I'd say the odds are in your favor, but that's strictly a personal opinion.

While your HDHP might be HSA eligible, it is not the same as contributing to an HSA. They are separate things. Just don't contribute to an HSA while you have the FSA.

#7 here may help explain the "care and well-being" question: http://www.irs.gov/uac/Newsroom/Keep-the-Child-Care-Credit-in-Mind-for-Summer Note they say that tutoring does not count. The distinction being that a tutor is not hired to care for the child, merely to instruct. I could see some soccer "camps" merely being large practice and instruction sessions with no real element of care. The reason the IRS uses the word "may" is to say that it still has to meet other requirements for it to be such.

Keep in mind that is a delivery fee that is in question here. I think bcmom needs to clarify the original post. If the delivery fees are optional (meaning the participant can get a check by regular mail at no additional cost or can choose to pay an optional fee to get the money faster), then it is my professional opinion that the participant does have constructive receipt of the money used to pay the optional delivery fee. The participant was able to exercise control over that money by making the election for faster delivery. If the delivery fee is not optional, then it is my professional opinion that no constructive receipt occurs.

Sure. Here are a couple articles I found touching on the topic (provided here more for illustration than for information): http://www.bdo.com/publications/tax/seminar/Sep27-ExpatPayrollIssues.pdf http://www.aronsoncompany.com/knowledge-center/in-the-news/item/employment-tax-withholding-and-payroll-reporting-for-us-expatriate-employees-working-in-foreign-countries http://www.whitecase.com/hrhottopic-0412/ As for participating in the 401(k) plan, yes. For example see "cross border issues" on page 11 here: http://www.mwe.com/info/pubs/009_017_US%20employee%20benefits.pdf

It's also appears to be an optional fee deducted at the choice of the participant.

1) An ERISA 406 prohibited transaction is not the same as an IRS 4975 prohibited transaction. Unless a key fact is missing (specifically that the person who got the loan was a disqualified person), I'm not seeing why you would file a 5330. <EDIT>: http://www.irs.gov/irm/part4/irm_04-072-011.html "2.The excise taxes described in IRC 4975 apply only in the instance of a prohibited transaction between a plan and a disqualified person. Because ERISA 406 and ERISA 407 are broader in their application than the Code, there might be a prohibited transaction under Title I for which the IRC 4975 excise tax cannot be imposed." <END EDIT> 2) Resist all temptation to report or amend something that's past its limitation as you can reset the clock and suddenly owe lots of penalties and interest. Only report or file if you are 100% certain that you have a current legal obligation to do so. See this IRS manual: http://www.irs.gov/pub/irs-tege/epch1102.pdf It addresses the 4975 tax limitation on page 15: "Thus, it is the filing of the Form 5500, and not the Form 5330, which starts the running of the statute. The timely filing of the Form 5500 series return, however, does not excuse the taxpayer from the delinquency penalty on delinquent Forms 5330 secured during the examination. If the filed Form 5500 series return does not disclose the PT, the six-year statute period applies. The excise tax may be assessed, or collection begun without assessment, at any time within six years after the later of the date the Form 5500 series return was filed or due."

If the company was big enough to have an ESOP then I hope they're big enough to have an ERISA attorney who can help the company/plan figure it out. snmhanson, it's not for you to decide no matter how well intended. The money is in a qualified plan and numerous laws, regulations and court cases exist on the subject of inheritance of qualified plan accounts. You can understand that when inheritances are involved, people can get a bit litigious. Did the father remarry or have other children besides the 2 daughters? It hurts nothing for the daughters to request in writing (if the plan has provided distribution forms, use those) to each receive 1/2 of the account in question by rollover to an inherited IRA. The plan will then have to review their claims for benefits and respond either by making the distribution or by denying the claims. If the plan denies the claims, then request information on their ERISA appeals process and follow that process. If nothing else, the plan can file an interpleader and get a court to figure it out but the plan isn't likely to do such until a claim for benefits has been made. I would modify jpod's statement to be "so now it belongs to his plan specified default beneficiary, likely his estate". It's possible although probably rare these days for the plan to contain it's own succession hierarchy; I recall one that was spouse, children, parents, estate. And it's unstated if the father remarried.

But what's being obstructed, the 401(a)(31) mandated distribution or the receiving plan's acceptance of it? Your suggestion works w/ an ERISA plan that has a determination letter that likely falls under ERISA disclosure rules. Won't be so effective for disbursing plans that are non-ERISA or don't have DLs or 5500s to disclose. You'll have trouble forcing me to sign a non-plan document.

I see two hurdles to whether designations could be shown on statements. 1) Who has the data (as GMK and My2Cents discuss above)? and 2) How do they have the data: paper or electronic? My opinion is that it's only realistic from a technical standpoint if the recordkeeper/TPA is collecting the designations electronically. I would have strong misgivings about it being transcribed from paper to electronic. But then again, electronic collection creates problems re: spousal consent as needed. An electronic designation would not be effective until a paper consent was filed (is there any guidance or case law on gathering consent electronically? I see it as potentially ripe for fraud). I don't have a problem w/ designations on the statement although I see GMK's position. A personal example is the 5498s I received recently on my IRAs showed my current designation (which they collected electronically from me).

The cite for what ERISAtoolkit said is Reg 1.401(a)(9)-3 Q&A-3(b). I concur with your thinking. Reg 1.402©-2 Q&A-7.

For the sake of perspective... when the company gets big enough (I was in corporate benefits with 4 plans and 4500 active employees), you start to be a bit careful about making broadcast announcements about updating BDFs because you can create a lot of work for yourself pulling files to verify existing designations (assuming you're still on paper rather than electronic). You can still use general announcements, just target your language a bit so people are more selective ("if you got married, divorced, had a loved one pass away, had a child or hate your new sister-in-law, now is a good time to complete a new BDF"). Oh, and, "if in doubt if you need to change your BDF, take a few minutes to do one now". Filing BDF's is faster and less frustrating than looking them up and returning phone calls to very many people.

I'm going w/ what QDROphile said. In some cases, if the distributing plan refuses to sign something, then you have little else to go on. What type of plan is the rollover coming from? Individually designed 403(b) plans won't have determination letters any time soon. Keep in mind that under the changes brought about by EGTRRA, the participant can rollover to an IRA and from there, rollover to your plan. The old "conduit IRA" days are gone so you don't have to trace the money's history. Admitted, you still have a bother if the rollover eventually turns out to be invalid (because the original source was disqualified), but the participant would have that problem no matter where they move the money and you're protected by the Reg (Q&A-14 says to simply disgorge the money if you later learn it was an invalid rollover).

The notice does address a 403(b) as a receiving plan, it's just a bit convoluted. The paragraphs in question first define an "eligible retirement plan" and then address rollovers to such a plan. From Para 1, Page 3: "Section 402©(8) provides that an eligible retirement plan is ... an annuity contract described in § 403(b)." From Para 2, Page 3: "Sections ... 403(b)(8)(A) ... provide that if any portion of an eligible rollover distribution from a ... § 403(b) plan ... is transferred to an eligible retirement plan, the portion of the distribution so transferred is not includible in gross income in the taxable year in which transferred." A similar analysis is in the background section of Notice 99-5. You might read thru the preamble to the amended proposed reg issued in 1998 http://www.gpo.gov/fdsys/pkg/FR-1998-12-17/pdf/98-32931.pdf which says in part: "Accordingly, the proposed regulations have been amended to provide explicitly that it is not necessary for the distributing plan to have a favorable IRS determination letter in order for the plan administrator of the receiving plan to reach a reasonable conclusion that a contribution is a valid rollover contribution." I will concede that I'm pretty liberal in applying the rules to receiving rollovers. But the reg has a "no foul" remedy which is simply disgorging the money if you later learn the rollover was invalid.

Yes. Among other bits of the Rev Rule, paragraphs 1 and 2 on page 3 support that. Here is a link to the Rev Rul if anyone else wants to see it. http://www.irs.gov/pub/irs-drop/rr-14-09.pdf In my opinion, none of it is novel, but they do address in the paragraph that laps from page 4 to 5 that a number of changes have been made to the Code that have not been updated in the Regs.

Going back over the last 10-15 years, a number of cases have been filed against plan fiduciaries about employer securities in plans. Most often having to do with it having been an imprudent investment option. My sincere advice is to either a) entirely eliminate employer securities given that you're at the perfect moment in time to do it or b) freeze the employer securities to new investments, making it a dwindling fund. If the owners honestly want to allow employees to benefit from the success of the company, my opinion is you can find better to do it more equitably with less risk and administrative burden. Bonuses, phantom stock options, profit-sharing contributions, etc.

It appears he can be a trustee but not the sole trustee and shouldn't be able to veto the US trustee. Prior threads on the topic: http://benefitslink.com/boards/index.php?/topic/41182-who-can-be-a-trustee/ http://benefitslink.com/boards/index.php?/topic/35410-foreign-trustee/ http://benefitslink.com/boards/index.php?/topic/4489-domesticforeign-trust/ A couple of links to info referred to in those threads: http://www.unclefed.com/ForTaxProfs/irs-drop/1998/n-98-25.pdf http://www.ecfr.gov/cgi-bin/text-idx?SID=715fc31d00b647e27143645b2470f48a&node=26:18.0.1.1.2.20.69.8&rgn=div8 (especially see "(d) Control Test")

Semi-recent informal guidance on pages 4-5 here: http://www.irs.gov/pub/irs-tege/rne_spr10.pdf Per EPCRS: "The last day of the correction period for an Operational Failure is the last day of the second plan year following the plan year for which the failure occurred." So you're open to self-correct on monies forfeited in 2011 or later that should have been used up in 2012 or later. Based on what records you have, is it within reason to conclude that the balance in the forfeiture account on 1/1/2014 consisted of monies forfeited in 2011 or later? Frankly speaking, unless you're certain they were open to self-correct for the amounts used in 2013, why is the 1st quarter of 2014 different? My personal opinion which is not based on anything formal is that the IRS isn't going to slam them after the fact for taking an extra quarter to reduce the forfeiture balance in a manner permitted by the plan document.

1) It may have confused things if too big a deal has been made about her being executrix and such. The primary reason (in my opinion) that matters for this purpose is to establish her authority w/in the corporation to execute corporate actions. Does the client have a copy of their certificate of incorporation? If not, for a small fee, you can get one from the appropriate agency in your state, likely the Secretary of State. Hopefully you are able to show that the incorporated entity is named in the plan. I would politely point out that given the employer is the corporation which still exists, the plan is not abandoned, cross-reference 29 CFR 2578.1 http://www.law.cornell.edu/cfr/text/29/2578.1 and then challenge the custodian to substantiate their position. 2) You don't indicate what level of person you are dealing with at the custodian. If in doubt, escalate. If necessary, insist on speaking to their legal department. My position would be: if they need a different corporate resolution to be signed, you'll be happy to get it, but otherwise you need the citation for the Code or Regulation that supports their refusal. (And I would use the word "refusal", they are deliberately refusing your valid document.)

Technically speaking, it is the IRA, not the individual, who files the 990-T and pays the tax.

http://www.ecfr.gov/cgi-bin/text-idx?SID=25d8ec6023fdc5111e64d687f1ec5acd&node=26:15.0.1.1.2.2.10.52&rgn=div8 I got curious and found the reg has your answer... basically that you're right.

But it's more complicated than that if the plan has a vesting schedule, see Example 2 on page 11, here: http://www.irs.gov/pub/irs-drop/n-03-20.pdf It may also be that most plans simply (if not entirely properly) treat it as FICA wages when actually distributed. See earlier on that same page: "If an amount deferred for a period is not properly taken into account, distributions attributable to that amount, including income on the amounts deferred, may be wages for FICA purposes when paid or made available. See 31.3121(v)(2)-1(d)(1)(ii)."