masteff

Interesting, thanks for the comment. That differs from my CCH book but it wouldn't be the first time that they were close but not quite on target.

I'm assuming, since it's a school and it's now June, that the 9-months have ended and no more paychecks in the plan year on which to fix the problem. Do they have the ability in their payroll system to reverse the last paycheck and rerun with a larger deduction? The employee would then write a check to the school for the difference. The school would have to be sure the changes in payroll taxes flowed thru on their next filing. That's how our payroll manager would have fixed if you could convince her this was important enough. How recent was the last paycheck (June 15th, where it's easier to go back, or May 1st which is much tougher)?

And there's the rare case of a 401(k) with a section 125, in which case the section 125 restrictions apply.

1) Perhaps your getting more out of what the OP said, but sounds to me like he's just wanting an account statement from the date of marriage to current (he just didn't state it very plainly). The problem is, the plan doesn't have an obligation to provide that if they don't have those records anymore. Just have to ask if they have account values going back that far (if it's recent marriage, then might not be a problem, but if many years, then might have been purged.) 2) Gee sorry, I'm not a high flaluten lawyer type, just someone who occassionally got a memo from our legal department that a supeona had been received and please provide the following. Now if you wanted to be adversarial and fight providing info then by all means, you just go right ahead w/ your "unenforcable demand" position. Oh, and you'll note that I didn't tell him to make a frivilous request, I told him to work w/ the employer to follow their procedures.

So have you asked for the information and they refused? As J notes, provide them enough information to conclude a QDRO is in the works. In addition to what J said... Have you tried simply asking them what they need to be able to provide you the information? Sometimes, if you use the wrong form of request, then you can be turned down based on form. Have you asked for a copy of their QDRO procedures and, if they have one (which they likely do), of their model draft? Also, did you use the legalese "pertaining to IRC Loan 72p"? Try asking if their loan procedures are part of the plan document or are in separate loan procedures, then ask for a copy of that. Bring the language to their level, don't expect them to translate legalese on basic information requests. As a plan administrator, I'd advise you to not get hostile (e.g., "how disclosure could be forced"). Just ask them to tell you what you need to do to comply with their procedures. Keep in mind that they are a bureaucracy, find out what the rules are and work within them and things will go much, much easier. If you don't have the patience for it, have an assistant call them. They are not trying to fight you or deny you something like an opposing divorce atty might. Oh, and if push does come to shove. Call their legal department and ask what info a supeona needs to contain to get the requested info. qwertyasdfgzxcvbpoiuylkjhgmnbv

Following on that logic, I'd suggest the latest date the deposit should have occurred.

I think your intertwining two separate facets of the issue. The impact at the time of change is separate from how the plan interacts with the HSA rules after the change is made (that is to say, the HSA rules don't care how the FSA became compatible, rather the rules only care if it is compatible). A mid-year amendment making a significant curtailment to the benefits of certain FSA participants is really too major to determine just from input from this board, you really should get a proper legal opinion from an ERISA / benefits law attorney.

Hmmm, well you need to resolve your basis in the account whether you convert it or not. You may need to do some research. First place to start is confirming that aftertax money was rolled over and not paid out to you by the 401(k). Biggest problem in not knowing the aftertax portion would be if you needed to withdraw money from the Roth before retirement. I'll put the question on the 2nd 401(k) back on you.... do you like the investment options you have and can you afford the tax burden to convert that much in one year? Otherwise, it's the same thought process as for the other. And lastly, if you're an educated investor and understand the risks, power to you. Just remember to be diversified.

1. You'd report the conversion distribution on line 15 of form 1040. It's counts as ordinary income, so ordinary income tax. You complete part 2 of form 8606 to determine the taxable portion of the conversion; on that form, the after-tax money counts as basis and is subtracted from the total distribution. 2. It will be decades before you're ever in this tax bracket again. And if you do well in your career and build up a decent retirement income, you might not be in this tax bracket even then. If you can afford to pay the taxes on converting part or all of the IRA, then it might work well for you over time. But at the very least, get that IRA invested in securities and start putting money in Roth. 3. You'll owe some taxes. If you convert the full $24K, this plus your $7.5K other income would give you gross income of about $31.5K. Minus about $8.5K for personal deduction and exemption gives you taxable income of about $23K. This does not include any education tax credit for which you might be eligible. You could do a partial conversion, which would lower the resulting amount of taxable income. 4. See #2. 5. No, not really. You might even decide to stay with the same company that has your IRA right now and they might be able to just move the contents as is. But typically you don't have to liquidate in advance; they can liquidate it all for you on the date of the distribution. Additional comments: When you start work somewhere, start putting money into their 401(k), especially if they offer matching contributions. Your first priority would be to get the full match, after that you can decide whether putting more money in your Roth or the 401(k) makes the most sense. Also, as an MBA grad myself, you'll be tempted to put all your extra money into your student loan payments. Well, think first about maxing your contributions to your retirement. If you invest semi-aggressively, you'll likely get more growth from that retirement money over the long-term than the interest rate you're paying on those student loans. PS - just noted you referred to having had it in a brokerage account. At your size of account, you should be thinking in terms of a diversified selection of mutual funds. Individual stocks in your size of retirement account are generally considered to have too much risk.

Just thinking out loud... could the employer buy the securities that are inside the GIC at the greater of book value or market value? This would prevent all or most of the loss. And while it's a related party transaction, it would be for equal or more than market value.

Actually, after review, I'll restate this... you'd likely violate ADA. Edit: to be nice, here's the most concise place to look: http://www.eeoc.gov/facts/ada17.html Under "What employment practices are covered?" it lists benefits. Under "Can I require medical examinations...?" it says "Once you have hired an applicant, you cannot require a medical examination or ask an employee questions about disability unless you can show that these requirements are job related and necessary for the conduct of your business." Oh, and I concur w/ what AndyH says above.

You might look at whether the Americans with Disabilities Act (ADA) says anything on this.

Also, its impossible for my attorney to have a fair hearing with this particular judge. Then maybe you need a different attorney.

Just to clarify.... only an ex-spouse who gets benefits from your account is an "alternate payee", it's a phrase that has special meaning. Your new spouse is not one (unless you divorce and she gets part of your account too).

And the fact that the plan sent a letter requesting repayment doesn't necessarily mean the plan intends to go back after the money. Even if they know they really messed up and might not expect repayment, they have a duty to send that letter.

And that's the catch to the irrevocable thing. It can't go back to its former nature. If the money left and came back to the same plan, it could be subject to different rules. This can be important in the area of withdrawals (for example: hardships apply to deferrals, not rollovers).

I'd say your form and SPD are your best argument. You're operating in violation of them because it doesn't sound like you're policing if people are actually using the medical plan. Maybe you could pull a list of people who waived medical coverage and look to confirm that they got the credit on their paycheck. This would prove to management those people got the credit as cash, in violation of the plan.

I think half of us laughed to ourselves and thought "that explains the mess" when reading this.

So which are you saying, that he can't use a VEBA anymore or just that 409A makes it much more complicated?

I'm with you now... once it's in the plan, it's in the plan and subject to the plans rules. Been there, had to explain that.

While I like J Simmons suggested approach, only problem I see is making sure people realize the difference between their base salary and their benefits stipend. The trouble I foresee is how future raises/bonuses are calculated against base salary and the potential for changes to the benefit credit. I'd work something in to J's paragraph to the effect of "Your compensation is composed of your base salary plus a $500 per month benefit credit. This credit is yours to keep or to apply toward benefits in the cafeteria plan." Might also consider a short paragraph about the credit being subject to change or cancellation and is not a part of base salary. Just a short disclaimer that the company has the right to modify the program design as it sees fit. GBurns, just being curious, so by adding it to their TI, are they able to make 401(k) deferrals based on this higher TI (i.e., is the benefit credit treated as 401(k) eligible compensation)? Is it included in comp for other benefits? Pension, life ins, etc?

What do you mean by irrevocable? What aspect of the process are you thinking is irrevocable? Please expand your thought. Money from QP can be rolled over to an IRA and can be rolled back to a QP. So without further explanation, I don't know what you're thinking of. Have you tried reading about rollovers in IRS publications 575 and 590? http://www.irs.gov/pub/irs-pdf/p575.pdf http://www.irs.gov/pub/irs-pdf/p590.pdf

Correct, as 3405© is the section that provides the 20% mandatory withholding on rollovers.

You say they didn't tax on the stock which is not a reporting issue but rather is a withholding issue and enough different to change our answers (a reporting error means they left something off or they put $10,000 instead of $12,000). Note that if the distribution was of stock, there was no cash for them to withhold from and the participant would still be responsible for paying any taxes due on his 1040. So let's back up a little since I was assuming it was just that the 1099 didn't match reality. What penalty do you think the IRS might come after the participant for? Please be specific and detailed.

I went down that line of thinking but realized that point is addressed in new reg 1.415(j)-1 and applies to the plan as a whole and not to the individual participant. So, it still doesn't explain where their thinking on the termed employee comes from. I disagree with them based on the plain language of the regs. It would be true if the participant couldn't accrue additional benefits prior to end of the plan/limitation year, but the part could still get post-termination profit sharing and forfeitures, at the least. The other argument I would make is that the preamble does not suggest this treatment, and as it would be a departure from the past, and as the preamble covers important changes, I don't see where the IRS intended this consequence.