david rigby

Peter, there is at least one other category. There are a substantial number of actuaries who place themselves in the "pension actuary" category (usually including an Enrolled Actuary credential) that also work on health-related issues. Notably, "Other Post-Employment Benefits" (OPEB); ie, retiree benefits that most often include medical, dental, life. The percent of time spent on these issues varies widely: anywhere from 5% to 95%+.

@Peter Gulia is spot on. Also, if the plan-required date is based on age 70-1/2, but the participant's RMD is 72 or 73 (according to the IRC), the payment (assuming a lump sum) is 100% rollable.

.... assuming the Plan itself is/will be amended to recognize the new 72/73 ages. There is no requirement to do so.

Just my opinion, you should NOT be posting your personal information on this public site.

Does this turn after-tax dollars into pre-tax dollars?

Is it possible the applicable plan was NOT amended to use the 72 and/or 73 ages for RBD?

Exactly right. And... those six words are breathtakingly poor documentation for any divorce decree and/or property settlement.

There are some US cities that have a fixed percent withholding, which is done at the payroll level, probably with no corresponding "tax return". Just my guess, those local statutes refer to wages, or salary, or overtime, or earned income, or W-2 compensation, or something similar. That is, it's a tax on wages. I would be surprised if any referred to payment from a qualified plan. BTW, the original question appears to assume taxation might apply to a periodic distribution from a DB plan. If that is subject to taxation, why not some taxation for distribution from a DC plan? And how would such a statute deal with amounts that are rolled over? Or made due to death or disability?

Sign and retain? If @Effen is skeptical (rightly so), this appears even more (agreeing with his word) unethical. No, I think there are several stronger words that apply.

Maybe it's just me, but it seems Jane might want (in addition to the "due on sale" aspect discussed above) some other reward, soon, perhaps even an annual cash bonus. Perhaps Jane could engage the services of a good compensation consultant (one who is selling only his/her expertise, rather than a product), or an ERISA attorney.

Are there advantages to having the plan termination effective one day before the transaction is closed? It's worth considering.

It's my understanding that a RMD made at 70-1/2 (because that's what the plan says) when the participant's IRC 401(a)(9) due date is 72 or 73 will be eligible for rollover, assuming it's otherwise rollable (eg, not an annuity). As I recall, there are one or two discussion threads on this topic (dated in 2023?). You can look for them using the search feature, or maybe someone else has a link. In any case, a plan's administrator and/or plan sponsor will want to get confirmation from legal counsel.

We should be clear: make sure you are not confusing "buying the company" vs. "buying the company's assets". (I mean no disrespect; there are dozens of examples of people saying, or understanding, this incorrectly.) In the latter case, the plan would still exist with the same sponsoring organization. the acquirer has NO authority to terminate (or amend) the plan prior to the acquisition date, no authority (anytime) if the transaction is "buying assets".

Very common, but not always true.

There are cases where a union exists, but no bargaining was done w/r/t a retirement plan (DB, DC, etc.). If this is the case, the sponsor needs legal counsel review to determine if the quoted section above is applicable.

I'm struggling to locate a copy or link for Bulletin 95-1. Can anyone help?

How large is the group? if you are concerned about "matching" non-participant records with someone who later (might) become a participant, it may be reasonable for the service provider to establish a fee for the more difficult (perhaps, more manual) task. IMHO, it's not unreasonable for the plan sponsor to be protective of their employees' private information in this context.

Look at the plan document to ascertain whether there is any distributable event. As implied in above responses (and in original post), it seems unlikely; thus, the recommendation to do a spinoff.

Indeed. And salespeople promise things without understanding (or caring about) them.

Indeed no. Rather, it makes you want to identify their clients so you can go after them.

My experience, over a few decades, is with SERPs: non-qualified DB plans. NONE of them have included anything related to a DRO. This is true even if the SERP's sole function is to provide benefits otherwise limited by 415 and/or 401(a)(17). Likely, the reasoning is that the Employer has no interest in whatever family matter is behind a DRO. Also, there are more complicated tax issues, as compared to a qualified plan.

Just to close the circle, one hopes that the Plan Administrator offered this participant the ability to have a Direct Rollover distribution, without assuming the payment should be cash. Written offer, written response.

Interesting, have not seen that before, but it's entirely predictable. Here is the IRS-provided link to IRC 4980: https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section4980&num=0&edition=prelim I did not find a corresponding regulation, although there may be some other type of guidance that addresses your situation. There is no discussion on point in the Gray Book, but some other Q&A (e.g., ABA) might include this topic. Maybe @Luke Bailey or @Peter Gulia has a relevant reference? IMHO, the ability to transfer to a QRP, and thereby reflect a reduced excise tax, would NOT be available in your situation. My reasoning is based on the purpose of 4980: to allow the DB plan participants some participation in the "surplus". As you describe it, the QRP appears to be unavailable, but Sec. 4980 also includes another option: applying a portion of the surplus to increase the DB-provided benefit. Thus, the second option is still available; if the sponsor wants the reduced excise tax, then they should use that option. But I might be misinformed.

@Peter Gulia, as best I recall, the creation of Top-Heavy rules (TEFRA, 1982) was the first congressional attempt to quantify the concept of "highly paid". They called it Key Employee. Just a few years later (I think it was TRA86), they created the HCE definition, and greatly expanded its use. Was there a reason? I'm not privy to the discussions behind the scenes, but the 5% threshold was likely a compromise. In like fashion, it's likely the TH threshold of 60% was also a compromise. Students of history will note that TH (and the entire TEFRA legislation) grew out of some significant bad publicity with small (often very small) plans providing 80%-90% of the benefit (and/or account balance) to the owner. This percent increased if the owner's spouse was also covered. Therefore, Congress had to do something! Never mind that the plan design(s) were otherwise "vanilla", and the high percentages were due (almost entirely) to the longer service/employment of the owner. The later HCE creation was in conjunction with a "beefed-up" change in IRC 401(a)(4) and congressional attention to the concept of "non-discrimination". Side note, IMHO, (1) the implementation and use of HCE should have, but did not, alter the use of Key Employee, and (2) congress (and the regulators at DOL and IRS) have done a poor job of coordinating the smorgasbord of statutes and regulations that come under the broad umbrella of "non-discrimination".

Several relevant discussion threads available, using the Search feature above. Good search words will include "property" or "kind" or "in-kind".