gc@chimentowebb.com

I believe it can be any amount. The 402(g) limit cashout provision is meant to give an employer discretion to overide an election. If the plan provides that a cashout must occur, there is no limit from what I can see. Let me take it another step further. Some of my pre-409A plans provided that installments, regardless of election, must always equal at least 1/2 of the 415 DB limit as in effect on January 1. It was a way to assure participants (and plan sponsors) that the distributions would not be painfully small, and that they would also provide a reasonable income supplement. This is certainly a definite and pre-determined schedule. Whether it works under the regulations is a bit unclear to me. Getting an answer before this ridiculous semi-compliance date of 12/31/07 is problematic. George

I'm posting this non-securities law question here because it is the only forum that seems to address multiple employer plans. If a contributing employer ("Contributor") withdraws participation in a multiple employer 401(k) plan, because of its merger into an unrelated company ("Survivor"), can distributions be paid to employees of Contributor? Assume the employees now work for Survivor and participate in its defined contribution plan. Has there been a severance from employment due to the merger ? The ownership of Contributor has changed and Survivor is not a sponsor of the multiple employer plan. Maybe Reg. 1.401(k)-1(d)(2) applies. Or is the theory that the multiple employer plan has "terminated" with respect to Contributor, so that 401(k)(10) lump sum distributions are permissible? Or is it impossible to distribute to Contributor's employees without violating the 401(k)(2)(B) distribution restrictions ? Thanks.

Thanks, Mike I just wanted to have a sanity check on this. George

Why don't you just file an amended W-2 for the employee to reflect the intention ? It sounds to me like a ministerial mistake which you could rectify. Also, prepare an appropriate resolution showing the intent at the time to give the employee increased wages and to contribute it to the annuity per his request. Good luck.