masteff

Ooh, good point, if it wasn't a qualified transaction to begin w/, might not matter who it's sold to now. Yuck. Reinforces the good ol' "cash only" point of view.

I agree w/ Andy and would add for clarification that absolutely can't be sold now to the adult child. http://www.irs.gov/retirement/article/0,,id=163722,00.html "the sale, exchange, or lease of property between a plan and a disqualified person" "A disqualified person is any of the following: (1) a fiduciary of the plan; ... (3) an employer, any of whose employees are covered by the plan; ... (6) a member of the family of any individual described in (1), (2), (3), or (4) (i.e., the individual’s spouse, ancestor, lineal descendant, or any spouse of a lineal descendant); ..."

I'm sending you part of my reply by PM so as to keep it slightly more off the record. This question always sent shivers down my spine. We once had a window retirement program that gave a one-time benefit based on number of years of vesting credit service. We had supervisors and leasing agencies digging thru records to help substantiate who had prior leased employee service, sometimes a decade or more earlier. As to your question on agreement... How did the agency know how much to charge you and how did you know it was the right amount to pay if an agreement didn't exist (even if not expressly negotiated, "standard going rate" would have been implied)? Unless you can find a Code section that defines "agreement" and it requires writing, then business law 101 would say it's a valid and binding verbal agreement. As to the drug store example... The store has made an offer to you by placing the goods on its shelves (generally w/ a price indicated but not always). You either accept the offer or reject it by leaving the store. Once you either accept the gum (perhaps by opening it in the store and chewing a piece) or tender your money to a store clerk, then you have become party to a transaction agreement.

No, in response to also taking the SE health insurance deduction. A review of Form 1040 instructions for line 29 (the SE Heath Ins deduction) shows it's limited to net profit less 1/2 SE tax less SE retirement plans. (See worksheet on page 27 of http://www.irs.gov/pub/irs-pdf/i1040.pdf ) Keep in mind that amounts that can't be deducted on line 29 may qualify as an itemized deduction on Schedule A (as medical expenses are allowed only in excess of 7.5% of income, it would depend on how much other income the client has for whether it would amount to much).

It can't be changed after the fact. http://www.irs.gov/pub/irs-regs/td_9237.pdf See page 12, 1.401(k)-1(f)(i) [emphasis added]:

I'd echo Janet's comments (which are critical stopping points, in and of themselves). The participants may not understand that ETF's are materially different from mutual funds. I'd also add that certain tax advantages of an ETF do not apply inside a 401(k) which is already tax advantaged.

Just as your industry has it's jargon, so does ours. Based on your description, don't try to call this a "voluntary benefit". An example of a voluntary benefit is life insurance, for which the premiums are collected via payroll deduction. You don't appear to have anything where the employer would be accepting signup forms and collecting premiums or fees via payroll. What you're offering, based on your description, is a discount program. Not unlike the discount programs I used to buy my current vehicle and my current personal computer. And Janet fairly succinctly phrased my initial question. You're also likely to hear... Given the ongoing credit crisis, what makes you able to provide financing to my employees when CNN says the credit market is freezing up? And how are you going to sell homes better than the next realtor when there are so many foreclosures pending or already on the market? (Don't actually answer those for me, just know that those are current topical questions.) Oh, and the minimum cost to me, as the HR/Benefits contact, is time. I either have to facilitate your coming in to present to my employees, or I have to put up your posters/brochures in my break room, or I have to send out an email or edit my internal webpage to advertise your website and/or program. PS - Janet, love the pig in lipstick phrase. I'll have to use that one because it's so true and so appropriate.

The several large plans I worked w/ only allowed "per stirpes" designations if the participant used our alternative form to draft a custom beneficiary designation. The problem w/ administrating "per stirpes" designations is that it potentially puts a larger burden on the plan in determining the proper beneficiaries.

As a best practice, if a QDRO intends to give an exact amount, then the QDRO should be drafted w/ that exact amount stated in dollars, payable as of the date of account segregation. "On the date of segregation, AP gets $25,000." As to the question above, you treat it as if the recordkeeping transaction was done on 12/28 and the 100% balance was transferred to the AP. Then you roll forward gains and losses based on the investements. The AP suffers the loss. Had there been a gain, the AP would have received it instead.

A review of web articles reveals that "non-equity partners" are becoming increasingly common in law firms. Page 6 of this article describes your basic scenario of a non-equity partner receiving guaranteed payment for services rendered to the partnership which are then reported on Sch K-1.

Nothing like a good websearch challenge. I found this old thread which put me on the right track to... http://www.soa.org/professional-interests/...es-pension.aspx It has a link for Moody's Corporate Bonds (Aa, month end close). (Hmm, in properties it says it's AAA rates, so you might want to compare it to some historical data to verify that it's really the Aa rates.) (Oh, and I know you preferred the daily rates, but couldn't find a link for those yet.)

Time-out... the AGI limit is the same for both individual contributions and spousal contributions when married filing jointly. See page 60 of IRS Publication 590. If he can't do a Roth due to AGI limit, his wife can't either. Two additional comments: 1) As noted above, the money in your Roth will grow tax free until you spend it in retirement. It's not wasted. It just seems small sitting by itself like that. Review what you have it invested in and possibly reallocate. 2) If you're making over $166K (the married filing joint limit), then you likely either have workplace retirement savings options (401(k), etc) or self-employed retirement options (depending on what type of employment you have). You should be maximizing your tax advantaged savings opportunites there for this year and going forward.

EGTRRA amended code section 401(k)(2)(B) from "separation from service" to "severance from employment". This loosened the previous standard. You'll want to verify your current amended plan text to determine if you EGTRRA amendments adopted the "severance from employment" language. See also reg section 1.401(k)-1(d)(2) (which has slightly more verbage, but not alot). If your plan does still say "separation from service" then another term you can cross-reference is "same desk rule".

You should make sure a flag is added to your pension account. They should have a note about the previous false DRO and the ex's threat to file another potentially false DRO. While you have little power to stop a valid DRO, since they would then be on notice of possible false filings, this gives them incentive to verify w/ you prior to processing.

The 5-years is counted from the beginning of the year in which you first set up and contribute to a Roth IRA. You don't restart the 5-years every time a contribution is made. It's different if it's a conversion contribution (where you take a regular IRA and convert it into a Roth), there the 5-years restarts for each converted amount.

Given the size of the assets, really should look at what the minimum corrective contribution to fix the plans would be and weigh that cost against taxes and penalties. To illustrate: Potential tax liablity = 1,600,000 * .35 = 560,000 Suppose average comp is $40,000 25 employees at $40k for 4 years = total comp of $4,000,000 $560,000/$4,000,000 = 14% So, by the numbers in this example, as long as it cost less than 14% of total compensation to fix the plans, then it might be cheaper to give eligible employees a minimum benefit than to pay taxes and penalties. You would need to determine actual eligible compensation. It might be significantly more or less than my guess. I'd think less because it probably wasn't 25 employees consistently and can probably use eligibility rules to exclude some (one year of service, etc).

I figured PlanMan's question was alluding to a multiemployer plan. Maybe the OP will come back and expand on the question.... like is he asking from employee's perspective or the employer's perspective. I think we're all searching for what the basis of the question is since the two employers are stated to be unrelated.

Don, A search in that document doesn't find the word "retirement" anywhere. Could you expand on what page/section brought you to your position?

The IRS publication that would cover it, if what you describe is indeed allowed (I didn't go look as your question is more complicated than I care to tackle), would be 590: http://www.irs.gov/pub/irs-pdf/p590.pdf

The place that's stated is in IRS Pub 590 on page 65 under "Rollover From a Roth IRA".

The plan processed the check when it was requested. It's impossible for the plan to have a delay for distribution but then process an actual payment. If the distribution were delayed per plan rules then the funds would continue to be help in investments and not in the form of a check. A check earns no income and is not a form of plan investment. It is a potential breach of fiduciary duty for the company to hold her money in the form of a check. The person in question should contact the nearest EBSA office and inform them that the plan has issued a distribution but the employer refuses to deliver the check. Nearest office can be found here: http://www.dol.gov/ebsa/aboutebsa/org_chart.html#section13 Question: was the distribution a direct rollover or a cashout? If it's a cashout and the check is not delivered to her w/in 60 days, then she loses the right to do an indirect rollover. By depriving her of this right, she might then have a course of legal action against the employer.

http://biz.yahoo.com/ap/080220/scotus_pension.html

Maybe I'm being too simplistic... I'm picturing it being like the brochure we produced every year on our GIC at my last job, where we listed out the component investments inside the GIC and gave the value of each. This results in one document per plan. The individual can then determine their % of the whole.

Even the FTP site is messed up (only has '06 and '08, no '07). Might be worth contacting their Web help desk and let them know they failed to make an '07 archive copy. http://www.irs.gov/help/article/0,,id=97185,00.html

It is possible that bonus is not included in the plan's definition of compensation. This is something you can learn from the plan administrator and/or the summary plan description.