masteff

Do you mean as a rollover? Keep in mind that unless your balance is less than $5000, you can leave your money in the 401(k). The main reason to consider this is the investment options available in that plan versus you new plan. Or Do you mean which plan should you pick for future contributions? In which case, look at which allows pre-tax contributions, do they have the same or different investment options, what are the restrictions on withdrawals (both now and at retirement).

You might double check w/ your ERISA counsel, but proably can simply return the monies to the sponsor and then put into the correct plan. (Actually, I'd do both as close to same day as possible, so you don't have to mess w/ interim earnings.) If you have the same recordkeeper on both, you might be able to just do a plan to plan movement.

Also, IRA's can be aggregated and the w/drl for one can be taken from another. But PS plans generally cannot be aggregated and a w/drl must generally be taken from each one.

Basic code sections touching on QDROs are 401(a)(13) and 414(p). Basic regulation touching on QDROs is Sec. 1.401(a)-13(g). As for how long pmt to AP can be deferred, reg Sec 1.401(a)(9)-8, Q&A-6, seems to explicitly address it. I do know some companies take the point of view that they don't want non-employees remaining in their plan any longer than they have to because of fees, etc. Otherwise, I don't get what the potential violation is either. I could see an argument under pre-2002 MRD rules that AP might have to start when EE emptied account. But w/ the 2002 regs (Q&A-6, cited above), I think that argument became invalid. To me, that was the point of the 2002 regs, to allow reasonable continued deferral of pmts. I guess the other place to look (sorry if I'm stating the obvious) is in the plan itself, since of course the plan can sometimes be less generous than the regs permit on certain aspects. Does the plan provide anything on this w/ respect to the AP?

Ah yes, point taken. And I agree it would likely fit w/in example 6 in the reg for paragraph (f), change in cost/coverage. And if the employee wanted to entirely eliminate daycare, I would think could make the case for allowing to revoke the election.

I would take the position that teleworking is a change in worksite. IRS Reg Sec 1.125-4 says in part: "(iii) Employment status. Any of the following events that change the employment status of the employee, the employee's spouse, or the employee's dependent: a termination or commencement of employment; a strike or lockout; a commencement of or return from an unpaid leave of absence; and a change in worksite."

Final reg on loan refinancing: http://www.irs.gov/pub/irs-irbs/irb02-51.pdf See page 7 of above document, Q&A-20. (Given what you said about plenty of money and both old and new being well below $50K limit...) As I see it, first you look at when the 5 years on the original loan would have expired (so if original was a 3-yr loan and it's extended to 5-yrs, then no problem; or if it's a 5-yr loan and new loan is paid off w/in that original 5-yrs then no problem). But it the new loan extends past the original 5-yrs then either a) for purposes of figuring the max loan amount available, have to include both the replaced and replacement loans as outstanding in the max loan calculation or b) have to re-amortize as two loans with original principal being paid w/in original 5-yrs and any excess being paid w/in new 5-yrs (see examples in reg). Since you said loan #1 was taken Dec 2006 and revised loan date is Dec 2009, then revised loan is only 3-yrs from original loan date, so it will all be paid off w/in 5-yrs of the original loan, so no problem. If this was truly a 2nd loan (versus a refinancing that includes the original balance), then as you ask, the 2-yr period would start from now. But since it's a refi, then you do the thought process above.

Umm, I think we're overlooking a very important word in the 5500EZ instructions. On page 2, under Who May Not Have To File, it says "at the end of every plan year beginning on and after January 1, 1994." The key word being "every". So if you ever went over the limit in any year since 1994, then would have to continue filing 5500EZ. The example in that same section even says "and for all following years".

First, have to be careful about what you mean by "non-qualified" since that is a jargon term in retirement plans area. Do you simply mean that these are after-tax monies (versus pre-tax monies)? Do you mean that you've been making Roth contributions in your 401(k) (which a few plans started when it recently became available)? Or does your company benefits department specifically call it a "non-qualified" retirement plan (meaning it's not a qualified plan under the IRS Code)? If it's the last, then I'd have to see the IRS's guidance before I could answer it. Otherwise, in general, yes this sounds correct. We'll have to wait for the IRS to publish guidance before we can be 100% certain. Keep an eye on IRS publication 590; the 2007 version will likely mention the new rules in the "coming changes" section at the front of the pub. Also, around the first of the year, the IRS should come out w/ a new model for the "Special Tax Notice" which you can request from your plan administrator; this notice contains useful information about retirement plan rollovers.

Quoting directly from the CCH 2002 US Master Employee Benefits Guide: (Pg 625) "Benefit Protection - Once an employee returns to work, benefits must be resumed at the same level as when leave began, without any new qualification period... An employee is not entitled to accrue additional benefits during a period of unpaid leave..." (Pg 628) "Pension Benefits - Employees will not be deemed to accrue hours of service during periods of unpaid FMLA leave (paid leave is counted for service). However, any period of unpaid FMLA leave may not be treated as or counted toward a break in service for purposes of vesting and eligiblity to participate." (Unfortunately I don't have my CCH Retirement Plans Guide w/ me to cross-check what it says.)

You are essentially correct. I'd just change a nuiance. The spouse does elect the life expectancy option but (B)(vi)(I) says it doesn't have to begin until participant would have been 70.5. And since laws and regs in the last 5 or so years have made life expectancy the default option, then surviving spouse will default to life expectancy method beginning when participant would have been 70.5. End result is the same, 5-yr method is bypassed for surviving spouse. I suppose the more important thing being... the spouse is never forced into the 5-yr method.

waid10, the only thing I'd add to Carol's comments is to check (probably w/ your actuary) and confirm that the plan is sufficiently funded to payout that much in lump sums.

Biggest problem I see is how to define the group to not discriminate or have unintended consequences. For example, if you only referenced the special vesting to people leaving between certain dates, then people from other departments leaving in that same window would get the special vesting too. If you define it by that specific department, you have to be sure everyone in that department goes (is anyone staying to monitor the outsourcer?) and that no one outside that department is getting missed (like a reduction in IT support due to lower headcount). One thought, have the amendment reference an appendix which simply lists all the people (either by name or by employee number, if you have unique employee numbers), just have to be very thorough when making the list (or amend additions to the list once it's final). A more complicated thought... does management want this to be a one time change or are they willing to commit to making this change apply to anyone similarly situated in the future? If you wanted to make it more long term, you could give the vesting to any one in, for example, a "reduction in force" or "severance program" or "departmental outsourcing" (or other phrase to your suiting). One comment on "severance program" is that we backdoored a few people into 100% vesting via one-person severance programs (typically resulting from post-termination negotiations in exchange for a waiver and release).

In addition to the items listed in the post above, try #1 at this link: http://www.irs.gov/retirement/article/0,,id=163722,00.html

My understanding is that the contingent benefit rule is more narrow than you're alluding. It says that a 401(k) plan cannot make benefits (other than the employer match) contingent on an employee’s decision to make (or not make) deferals into the plan. But otherwise, benefits and features can be contingent on other things (like a certain number of points from age plus service, or reaching a certain age while in service, or being under a severance program versus other terminations/retirements). Since a non-compete clause is not related to whether an employee makes or doesn't make deferals, then it appears to be a valid restriction.

Card, I'm at a lose for why you're looking in 2007-7 for this for the spouse because the spouse had this already, unless there's some special nuiance to your scenario that I'm missing. I think that what you're looking for already existed. The final regs for IRS Sec 401(a)(9) are available at http://www.irs.gov/pub/irs-irbs/irb02-19.pdf, beginning at page 8. The purposes of the 2007-7 wasn't to give the non-spouse something the spouse doesn't have, but rather to make the non-spouse more like the spouse already was under existing laws and regs. EDIT: the reg for the spousal rollover is 402©(9). you'll note in 2007-7 that the PPA created a new section 402©(11) for non-spousal rollovers.

I'd suggest that two issues need to be looked at slightly separately. The first is the right of the ex-spouse to a benefit as an alternate payee. This is a sometimes unavoidable consequence of divorce. The second is the ex's demand to be made the surviving spouse. There is NOTHING that requires she get that, but it doesn't hurt her to ask for it. I would take the position that since the participant (your husband) has remarried (to you), then the ex-spouse should NOT be allowed to be the surviving spouse, unless something in the divorce decree/property settlement explicitly says to give her that. (After a quick re-reading of mjb's comments above, refer to mjb's #3 on this issue) So if what you're really wondering is what part of this you should fight, I'd fight the surviving spouse thing (unless it was in the decree or settlement).

Short of consulting an ERISA attorney in that state, my best answer would be to call the company's peers w/ operations in that state and ask how they handle it. Might even be able to get an intelligent answer by calling the state agency that administers that plan (since this isn't brand new then surely they've had the same question asked of them before). Two other thoughts: Following on David's comment... it may well constitute a governmental plan and thus be outside the pervue of ERISA discrim testing. Also, is the company treated as being an "employer" within the terms of the plan (such as in a multi-employer plan)? Because if isn't, then I'm not seeing a clear linkage that would pull that external plan into the company's discrim testing.

If you're using a fixed rate of interest, it should be neglible amount for one pay period. We always just stuck ours in w/ regular ER contributions. I'm not aware that we ever did it as a QMAC.

Whoa! Need to verify if it's a Roth or just a regular "thrift" plan (plain vanilla after-tax, which has been around for many years and in older companies is sometimes referred to as either a 401(a) or "thrift" plan). 401(a) refers to the IRS code section that specifies requirements for a qualified trust. A 401(k) plan is contained w/in a 401(a) trust. First question for your husband's company is whether the 401(a) is referring to regular after-tax or Roth. Second question is what are the withdrawal restrictions... generally, regular after-tax has no restrictions on when it can be withdrawn. So if it's regular after-tax, that's a consideration. Some people will put in part pre-tax and part after-tax, so they get the tax-deferred earnings but can w/draw the after-tax money if they need it for an emergency. It all depends on your personal finances and how much other savings you might have available. Using the standard assumptions, you're better off putting money in pre-tax (versus regular after-tax). This is based on theory that you're in a higher overall tax bracket now than you will be during retirement when you withdraw the funds. But if they offer a Roth option, then read the comments from the posters above for additional insights on Roths.

Virgin Islands Internal Revenue Board http://www.viirb.com http://www.viirb.com/TAX%20STRUCTURE%20%20...N%20ISLANDS.doc On page 14: "PENSION, PROFIT SHARING AND EMPLOYEE BENEFIT PLANS The Virgin Islands is considered to be a state for the provisions of the Employee Retirement Income Security Act of 1974. Generally, the IRS must approve a plan falling within the purview of the Act. Additionally, all provisions governing employee benefits are mirrored to the Virgin Islands. For example, a VI employer can set up a “cafeteria plan” under IRC §125 if the plan otherwise qualifies." I'd contact VIIRB just be sure there isn't any additional reporting that has to be done (such as a VI 5500 equivalent).

First, nope, your W-2 is fine. The tax form you'll get for the distribution is a 1099-R. Second, you'll have to wait until you actually get the distribution and 1099-R to know if it's taxable in 2006 or 2007. It's a little weird... if it's distributed by April 15th then the deferrals are taxable in 2006 and any earnings are taxable in 2007, or it's distributed after April 15th then both deferrals and earnings are taxable in 2007. So you'll have to wait and see. http://www.irs.gov/pub/irs-pdf/i1099r.pdf Page R-4, Corrective Distributions, Excess Deferrals

Yep, I'd sure argue that! A one time missed deduction that's noticed immediately within the same plan year can, as Belgarath noted under App B, Sec 2, be fixed by simply taking the deduction in the next pay period. The two things I would look at are 1) did the EE miss out on any match which might need to be corrected after the extra deduction is taken and 2) is two times the EE's deduction % greater than the plan's allowed deferral %, in which case I'd be extra careful to document why the higher % was taken on that subsequent paycheck. After the second payroll is run and the double deduction is taken, as long as any lost match is corrected, then the employee will be in the same position as he/she would have otherwise been after that same payroll.

It's not much of an answer but I'd bet someone said "we'll go back and fix that other spot later". Only they never did. Also, legislation that's written at different times, ends up with different results.... like the multiple other discrepancies between IRAs and 401(k)s.

My experience w/ financial advisors is that they tell our employees the worst case scenarios (even to the point of distorting the rules) in order to get rollover money. I'd politely explain to him "qualified plans are similar but different from IRAs".