J Simmons

Thanks, George, for the Rev Ruling 62-199 cite.

Can you expand on these, please? From that previously linked write-up, there is this paragraph: Section 514 of the Internal Revenue Code is the one to look at. I've been following the discussion of converting the Roth IRA to a self-directed real-estate IRA. I was hopeful that my Roth IRA, a money-market account, could purchase vacant land which my wife owns or land which she and I own together. We would then intend to sell the land at a profit at a later time and hope to realize a tax-free gain upon the sale. From the discussion, I conclude that this would be prohibited inasmuch as we are "related parties." If the land were owned by an Educational Trust for which we were directors, would this be an approvable arrangement? Thanks for any guidance you may be able to provide. Wagner In addition to what k2retire mentioned about controlling an entity, if you prearrange a sale by the entity to the IRA before your wife (or you and your wife) sale to the entity, it would be a prohibited transaction even if you do not control that entity.

Unless the Plan Administrator is looking for grounds to fire the EE, I would not involve the spouse until after confronting the EE with the evidence of forgery and see if the EE wants to withdraw the forged document. In the event that the EE becomes overly defensive, then maybe contacting the notary would be next. The spouse would only be third in line--unless, as mentioned, you want to get rid of the EE.

Wouldn't the answer to that vary depending on the exact circumstances and the judge(s) hearing the case? When the summary of material modifications or updated SPD is timely provided following a December 2008 amendment to remove the SH at 1/1/2009, doesn't that ruin your SH Notice as SPD argument? If you add the new facts ("summary of material modifications or updated SPD is timely provided following a December 2008 amendment" were not in your Post #6) after the erroneous SH notice, then I think you have a different situation. As Post #6 had it, I think the EEs (or DoL for them) would have a good claim against the ER.

It depends on what the employer's plan provides. You might not be entitled to anything in lieu of the coverage you've now opted out of. On the other hand, you might be entitled to more compensation or employer-borne amounts applied to "pay" for other benefits.

Your plan document might specify who can sign. Also see the US Supreme Court case for some ramblings about authority to make plan amendments. Schoonejongen

What happens when an SPD is more generous than the underlying plan document? My answers are Socratic ones.

Among eligible class EEs, does the plan document provide that on re-hire that entry is immediate or next entry date? As for vesting service, count the service even while part of a plan ineligible class.

Would you be saying the contrary? that an ER that gives its EEs a notice promising that the ER will contribute 3% of their pay may wiggle out of that promise just because the ER botched a tax angle (safe harboring against ADP) that was the motivation for the ER to give the notice?

Why would that be? The amendment (in this example) was done before the notice went out, so, in theory, the plan cannot be safe harbor for 2009. So how could an employer send out a notice saying it will make a contribution that is not allowed in the plan and be held to it? What if I said to my employees I was going to make a matching contribution for 2009, but my plan does not allow for it. Would I still be on the hook for it? Separate and apart from the safe harbor from ADP testing (an IRS issue), you have the DoL side of ERISA where providing EEs what is promised them is a chief concern as well as EEs perhaps having contractual issues if the 3% promised in the notice is not in fact made. The notice promises employees a 3% of pay contribution not subject to vesting. If you cannot timely amend your plan to fit with your promise--and again, not talking here for purposes of qualifying for the safe harbor from ADP testing, but talking about fulfilling a promise to EEs--then you might have to fulfill the promise in some other way. That an ER inartfully failed to fit its plan into the safe harbor from ADP testing for a plan year does not vitiate the promise-to-EEs aspect unless the notice also provides that the promised contribution is conditioned upon the safe harbor otherwise applying.

For purposes of avoiding ADP/ACP testing, no. The inadvertent notice probably obligates the ER to make the contribution described in the notice. For purposes of avoiding ADP/ACP testing, no. Depending on the wording of the plan's SH provisions, the ER may yet be obligated to make the SH contribution. As with some GUST II prototypes, some EGTRRA prototypes with 3/31/08 IRS opinion letters have the SH language that it only applies to a PY for which a proper SH notice is timely provided. So it appears that the IRS is yet okay with such SH language despite the final 401k regs.

An info sharing agreement per se is only needed with those 403b vendors to which an 'exchange' inside the 403b plan is made after 7/24/2007. Treas Reg § 1.403(b)-10(b)(2)(i)© As for 403b vendors that will be receiving new contributions after 2008, a prudent employer will have an agreement that specifies that the 403b contract is maintained pursuant to the employer's 403b plan (and subject to the plan's terms and the employer's amendments to the plan), and which defines what the 403b vendor will be doing, part and parcel to a delegation of compliance duties per Treas Reg § 1.403(b)-3(b)(3)(ii).

k2retire, Are you referring to the 30 day advance notice of the reduction or suspension of safe harbor matching contributions set forth in Treas Reg § 1.401(k)-3(g)(1)(ii)? Is it your position that a reduction or suspension of safe harbor 3% contributions must follow those rules as well?

It looks to me like the substance of the transaction would yet be retained discretion over timing of payment, just as to a different amount rather than all of the deferred compensation. If the decision to pay an amount equal to what the employee has forfeited due to early retirement is made only after the early retirement and the forfeiture has occurred, and the employer is at the time of so deciding under no legal compunction to pay any part of the deferred compensation, then I think the employer's deciding to make a payment would be a 'new' benefit.

I don't think so. Take a look at allocating administrative responsibilities, Treas Reg 1.403(b)-3(b)(3)(ii). Also, if you look at the preambles to the regs, you'll see that the IRS expressed its concerns over historically lax compliance because employees were left to their own devices.

I think the constructive receipt lies in the choice, for those taking the severance buyout, between the lump sum delta or medical payments, between taxable income and a benefit that an employer may provide tax-free. For those that choose the medical payments, they have taxable income because they could have chosen the lump sum delta (taxable income)--unless that choice fits into the 125 context.

The situation is this: Plan of a small sole proprietor is being wound down as the sole proprietor has retired. One of the assets it holds is life insurance on the sole proprietor, a plan participant. Normally, the sole proprietor's spouse ignores the premiums on the life insurance when they come due, simply allowing the premium to be assessed by the insurance company against the investment portion of the policy. Spouse is out of town when a quarterly premium statement comes to their home in 2007. The sole proprietor simply writes out a personal check for the quarterly premium to the insurance company. There are no earnings for 2007, so there can be no 'contribution'. And it was not claimed in any way as a contribution. Looks like a prohibited transaction, personal assets of a disqualified person being used to benefit the plan being an "extension of credit", and anticipating (a) repayment (with interest) and (b) filing a Form 5330. Section 6.09 of Rev Proc 2008-50 provides that PT's cannot be corrected using EPCRS. Anyone else dealt with a similar situation? Comments and suggestions regarding this situation will be appreciated.

If you trust that www.irs.gov is in fact the IRS' website, then you can verify that the IRS published Notice 2009-3 at this link

Amendment needed. The plan must be operated as written, to the extent consistent with ERISA. Otherwise, a fiduciary violation. ERISA § 404(a)(1)(D).

Isnt the question whether there is a genetic male who is a party to the marriage,not whether a sex change has occurred. DOMA only prohibits the recognition of marriage by members of the same sex. The fact that some one has a sex change does not mean that the person has changed his/her sexual identity. For example it was recenlty reported that a "man" was pregnant. However, the "man" was genetically born a female who had a sex change operaton but was still able to bear a child. Therefore biologically this person is a woman. A gender change does not change bilogical sexual identity. Does DOMA tag gender by sexual "plumbing" or sexual "identity"? There could be many homosexual couples plumbed the same way by nature but with opposing sexual identities (one of them sexually identified with the gender opposite of his/her plumbing). I hate to think what due diligence might require in this regard. What's a poor plan administrator to do when presented with any QDRO? or in dealing with QJSA/QPSA rights? or default death beneficiary situations? or health insurance coverage of a spouse? Etc.? Before dealing with any of these situations, get certification of the couple's plumbing from a physician, and their sexual identities from a psychiatrist?

It depends on what your plan doc's say. So is the match 37.5% on the first 6% electively deferred? That's how I come out at a cap of $5,175 for those hitting the $230k cap on considered comp.

Boy, you got me. My post only suggested that the employer could move, not cancel, the vested benefits, and then only if the contract rights gave that unilateral power to the employer.

It would seem to me that DOMA caused an end to an otherwise valid marriage at the time of the sex change operation (or some provision or interpretation of DOMA allows a heterosexual marriage to remain valid passed a sex change operation, in which case the valid marriage is now dissolving). Either way, there once was a valid DOMA marriage and it is now ended or ending. The marital property rights are what are being sorted out, and the QDRO incident to that. That's how I position it, anyway.

As Peter's questions point out (Post #17), it was not pretty what the 9th Circuit did in Tise from a statutory interpretation point of view. If anything, it could hamstring the plan administrator in just the way that Peter's earlier posting (Post #15) draws out. "Damned if you do, damned if you don't". Sounds like the grist of litigation.