Peter Gulia

BenefitJack, thank you for your thoroughly thoughtful and helpful information.

jpod, thank you for your further observations. For the reason you suggest and some others, I tell plan administrators to read the death certificate, which often has some information about illnesses and causes of death, and sometimes about who called in the death. Likewise, we read obituaries, which often name a spouse, children, other relatives, friends, and others, and mention personal details about the decedent. We’ve often quickly discerned a claimant’s false statement from what was described in an obituary retrieved from a first page of Google results. Some steps you suggest, while they might be useful with a small-business employer’s plan, might be inefficient, impractical, or inapposite for a plan with tens of thousands of participants, especially if claims-handling is mostly outsourced. For the plan that’s the subject of this discussion, the default beneficiary is the participant’s estate. If that provision applies, the plan pays the estate’s personal representative (and need not know anything about who takes from the estate).

For thirteen kinds of distributions added or changed by SECURE 2019 and 2022, here’s my table to show whether: the specified kind of distribution is an exception from a provision that restrains a distribution until the participant’s severance-from-employment or age 59½; a plan’s administrator may rely on a claimant’s written certification that the claim meets conditions for the specified kind of distribution; the specified kind of distribution is an exception from § 72(t)(1)’s additional income tax on a too-early distribution; a distributee of the specified kind of distribution may repay the amount as a rollover contribution to an eligible retirement plan. Distributions added or changed by SECURE 2019 and 2022 I.R.C. § Kind of distribution (from an individual-account eligible retirement plan) Early?[1] Rely?[2] Excuse?[3] Repay?[4] Applies[5] 72(t)(H) Qualified birth or adoption distribution. Yes Yes Yes Yes 2020 72(t)(I) Emergency personal expense distribution Yes Yes Yes Yes 2024 72(t)(J) From a § 402A(e) emergency savings account Yes Yes Yes No 2024 72(t)(2)(K) Eligible distribution to domestic abuse victim Yes Yes Yes Yes 2024 72(t)(2)(L) Terminal illness No -- Yes Yes 2023 [6] 72(t)(2)(M) Qualified disaster recovery distribution Yes No Yes Yes 2021 [7] 72(t)(2)(N) Qualified long term care distribution No -- Yes No 2026 [8] 72(t)(10) Qualified public safety employee age 50 or 25 years No -- Yes No 2007 72(t)(11) Qualified disaster recovery distribution Yes No Yes Yes 2021 [9] 139C Qualified first responder retirement payments (disability-related) No -- No [10] No 2027 401(a)(39) Qualified long term care distribution No -- Yes No 2026 [11] 401(k)(14)(C) Hardship distribution (certification) Yes Yes No No 2023 402(l)(5)(A) Governmental plan payment for safety officer’s health insurance No -- Yes No 2023 [12] 403(b) Hardship distribution (certification) Yes Yes No No 2024 457(d)(4) Unforeseeable-emergency distribution (certification) Yes Yes No No 2023 2022 Dec. 29 © Guidance Publishers NOT tax or legal advice [1] This column describes whether the specified kind of distribution is an exception from a provision that restrains a distribution until the participant’s severance-from-employment or age 59½. [2] This column describes whether a plan’s administrator may rely on a claimant’s written “certification” that the claim meets conditions for the specified kind of distribution. [3] This column describes whether the specified kind of distribution is an exception from § 72(t)(1)’s additional income tax on a too-early distribution. [4] This column describes whether a distributee of the specified kind of distribution may repay the amount as a rollover contribution to an eligible retirement plan. [5] A note about when a provision first applies assumes all relevant plan, limitation, and tax years are the calendar year. [6] Internal Revenue Code of 1986 § 72(t)(2)(L) applies to a distribution made after December 29, 2022. [7] The changes apply regarding disasters with incident periods that began on or after January 26, 2021. [8] The change applies to distributions made after December 29, 2025. [9] The changes apply regarding disasters with incident periods that began on or after January 26, 2021. [10] Internal Revenue Code of 1986 § 139C provides an exclusion from gross income, which could affect the income subject to a § 72(t)(1) tax. [11] The change applies to distributions made after December 29, 2025. [12] The change applies to distributions made after December 29, 2022. Distributions added or changed by SECURE 2019 and 2022.pdf

You seem to be looking for some reasoning that a within-the-family transfer would not be a change-in-control as the § 409A rules define it. But why? If the provision the persons negotiating the deferred compensation agreement want might be narrower than what the § 409A rules allow for a change-in-control trigger, what tax-treatment harm would result from the narrower provision?

Congress last set an amount ($1,000) for the ERISA § 502(c)(2) penalty in 1987. I was then active in lobbying. I don’t remember any trade organization or particular business putting an effort into persuading Congress not to set that penalty amount.

That someone was “the Senate and House of Representatives of the United States of America in Congress assembled[.]” More than 22 years ago, Congress set the general principle that a signature is not denied legal effect because it was made by electronic means. “[A] signature, contract, or other record relating to” a transaction in or affecting interstate or foreign commerce “may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and a contract relating to such [a] transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.” Electronic Signatures in Global and National Commerce Act, Public Law No. 106–229 (June 30, 2000), 114 Statutes at Large 464-476 (2000), unofficially compiled as 15 United States Code §§ 7001-7006, at its § 101(a), § 7001(a). E-SIGN Act.pdf

Pressures about a lawyer’s fee work in an opposite direction. Bad writing results when a lawyer presumes a client won’t pay for the time needed for good writing.

If a blank line calls for filling-in a date on which something became, becomes, or will become applicable and the writing does not otherwise state that date, one might worry about an incomplete expression. But if a fill-in would be merely a recital of when something was signed (I’d ignore the nonsense about “executed”) and there is useful evidence of when it was signed, what incompleteness would a maker worry about?

It’s Congress that set this penalty. The Labor department merely announces the non-discretionary inflation adjustment.

If one subscribes to Wolters Kluwer VitalLaw™ research databases, its edited Internal Revenue Code integrates Public Law 117-328 deletions and additions (as Belgarath wishes for) with caution markers for each subpart’s applicability date. One imagines Bloomberg and other publishers have edited their versions. Belgarath is right; it’s helpful to read the changed Internal Revenue Code as a whole text.

To the extent there is a tax-qualification failure to correct, consider that SECURE 2022 § 305 undoes the Internal Revenue Service’s time limit on which failures are eligible (if otherwise eligible) for self-correction.

Yes. Form 5500 and its Schedules and attachments is the form for an ERISA-governed employee-benefit plan's annual report.

ERISA § 502(c)(2)’s civil penalty for a failure to file an annual report is $2,586 per day. 88 Fed. Reg. 2210, 2219 (Jan. 13, 2023). If a plan’s administrator is off by one year and three weeks, that’s about $1 million.

I suggest only some points of authority a professional might consider, along with other authorities, to construct a reasoned interpretation. A taxpayer should want her professional’s advice about whether an interpretation has enough authority for a tax-return position. See 26 C.F.R. § 1.6662-4(d) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR1d0453abf9d86e0/section-1.6662-4#p-1.6662-4(d). I ask some questions; but a professional must do the complete research, analyze and interpret all possibly relevant authorities, and render careful advice.

And the business might have a few years' incorrect tax returns, by claiming a deduction for contributions to a plan that was not tax-qualified.

Even if the plan year began December 30, 2022 and ended December 31, 2022, might the limitation year have been January 1, 2022 to December 31, 2022? “Unless the terms of a plan provide otherwise, the limitation year, with respect to any qualified plan maintained by the employer, is the calendar year.” 26 C.F.R. § 1.415(j)-1(a) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR686e4ad80b3ad70/section-1.415(j)-1#p-1.415(j)-1(a). Even if both the plan year and the limitation year were December 30-31, 2022, might a sole proprietor’s § 401(c)(2) earned income for 2022 have been earned on December 31, 2022? “[A] sole proprietor’s compensation is deemed currently available on the last day of the individual’s taxable year[.]” 26 C.F.R. § 1.401(k)-1(a)(6)(iii) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401(k)-1#p-1.401(k)-1(a)(6)(iii).

Must one keep a thief’s secret? Professions’ conduct rules include a general principle of keeping confidential information one learned while working for one’s client. Those rules recognize an exception for giving testimony or producing documents as compelled by law. Some might wonder whether a citizen must report a crime. The answer might be No. There is a Federal statute, enacted in 1790 during the first Congress, for misprision of felony. “Whoever, having knowledge of the actual commission of a felony cognizable by a court of the United States, conceals and does not as soon as possible make known the same to some judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both.” 18 U.S.C. § 4 http://uscode.house.gov/view.xhtml?req=misprision&f=treesort&fq=true&num=4&hl=true&edition=prelim&granuleId=USC-prelim-title18-section4. Courts have interpreted this statute to find no crime unless one both has knowledge of the felony and actively concealed it. A practical point about such a former client: Be careful not to destroy records any sooner than is regularly done under your firm’s records-retention and records-destruction procedures. Keeping your records regularly available shows you did not conceal anything. If someone might plausibly assert the TPA or actuary is or was a fiduciary regarding the plan, consider one’s co-fiduciary responsibilities under ERISA § 405(a)(1)-(3). ERISA § 405, 29 U.S.C. § 1105 http://uscode.house.gov/view.xhtml?req=(title:29%20section:1105%20edition:prelim)%20OR%20(granuleid:USC-prelim-title29-section1105)&f=treesort&edition=prelim&num=0&jumpTo=true. About all these and several other points, an observing former service provider needs its own lawyer’s confidential advice.

Congress’s Act states many changes to the Internal Revenue Code of 1986 by specifying additions to, insertions in, and deletions from specified subparts of that Code. For many of these changes, comprehending a change’s meaning or effect depends on seeing how the change integrates with the text that was in the Code before SECURE 2022. The enrolled bill does not show that. What Belgarath asks is whether we know a source that shows the Internal Revenue Code as changed by SECURE 2022?

To return to youngbenefitslawyer’s question, before 2025 is not the relevant time for whether a “new” § 401(k) arrangement was “established”. The exception Internal Revenue Code of 1986 § 414A(c)(2)(A)(i) provides is for a § 401(k) arrangement “established” by December 28, 2022. An arrangement established after that date need not provide an automatic-contribution arrangement for 2023 or 2024, but must for 2025 meet Internal Revenue Code of 1986 § 414A(a)’s condition. That’s so if a § 401(k) arrangement became established, for example, on December 30, 2022—a closing date used for many 2022 transactions. If this afternoon one is an employee-benefits lawyer advising on a merger, acquisition, or other deal scheduled to close in seven business days on January 31, one must render her advice as best she can without waiting for Treasury’s or its Internal Revenue Service’s interpretation. Some lawyers rendered that advice in December 2022.

If the plan is ERISA-governed, New York’s or any State’s law about how a divorce might affect a beneficiary designation is superseded. ERISA § 514, 29 U.S.C. § 1144; Egelhoff v. Egelhoff, 532 U.S. 141, 25 Empl. Benefits Cas. (BL) 2089 (2001). As Lou S. mentions, a plan’s governing documents might or might not provide that a divorce revokes an earlier beneficiary designation. See Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan, 555 U.S. 285, 45 Empl. Benefits Cas. (BL) 2249 (2009). To the extent that an ERISA-governed individual-account plan does not provide ERISA § 205 survivor annuities, such a plan provides that the participant’s surviving spouse gets the account, unless that spouse consented to a different beneficiary designation. ERISA § 205(b)(1)(C), 29 U.S.C. § 1055(b)(1)(C). A qualified domestic relations order may provide that an alternate payee who is a former spouse of the participant be treated as the participant’s surviving spouse for all or some ERISA § 205 purposes. Such a provision could wholly or partly deprive the participant’s actual surviving spouse of a benefit to which the surviving spouse otherwise might become entitled. ERISA § 206(d)(3)(F)(i), 29 U.S.C. § 1056(d)(3)(F)(i). A contingent beneficiary designation has no effect until all spouse benefits under ERISA sections 205 and 206 are exhausted. Anything on BenefitsLink is only general information, not advice, and might not fit your situation.

Does the default IRA’s custodian have a name, taxpayer identification number, and address to which the custodian sends the custodian’s IRA account statements and tax-information reports?

Evaluate whether SixFifty’s software and services might help you. https://www.sixfifty.com/products/privacy/all-us-privacy/ Also, are you sure Thomson Reuters Practical Law’s Data Privacy & Cybersecurity suite lacks the information you seek? https://content.next.westlaw.com/practical-law/data-privacy-cybersecurity/health-medical?transitionType=Default&contextData=(sc.Default)&navId=CCC952ED890C38386C41083B4FE14C15

Whichever course you choose, consider engaging a service provider that, like MoJo's employer, has an inside lawyer who understands the issues and potential failure points.

What CuseFan explains is why my note said: “If new ERISA § 113 requires a notice[.]” ERISA § 113(a) applies only when a pension plan’s sponsor “amends the plan to provide a period of time during which a participant or beneficiary may elect to receive a lump sum, instead of future monthly payments[.]” I reminded us about ERISA’s spouse’s-consent and QDRO regimes because the inquirer’s law practice is domestic relations.

For this, one needs a subscription with one of the commercial law publishers. For example, Bloomberg’s Bloomberg Law, Reed Elsevier’s Lexis, ThomsonReuers’ Westlaw, or Wolters Kluwer’s VitalLaw.