david rigby

You might find some relevant discussion in this recent thread: https://benefitslink.com/boards/index.php?/topic/69629-contingent-beneficiary-question/

As Peter notes, and as implied in the quote above, there may be doubt that the distribution is an eligible rollover distribution, ie, it might not be rollable to any IRA/Qualified plan. (If it's not rollable, the 20% withholding does not apply, but another withholding rule will apply.) If that is the case, there is no (probably) no vehicle for a rollover or "putting it back". Something that should have been discussed with the participant (who is also the plan sponsor, apparently) at the time he/she expressed interest in any type of withdrawal. If the participant is treating this like a piggy bank, someone should explain the difference. It may be a broken record with me: "Please put on your consulting hat!" There might be value in reading this, in conjunction with the plan document: https://www.irs.gov/retirement-plans/plan-participant-employee/when-can-a-retirement-plan-distribute-benefits

It's not a "rollover from itself". It's a rollover from a qualified plan. I doubt there is a 1099 question. The Plan prepares the 1099 based on the distribution (eg, direct rollover? cash? combination? based on death/disability?, etc). The Plan never cares what the recipient does with the money afterward. The plan (probably) does not prepare a 1099 to reflect the rollover, but it likely provides the participant with some documentation that it received the rollover; this provides the participant with documentation where the money is as well as compliance with the 60-day rule. Anticipating your next question, if the distribution is $10K consisting of $8K cash + $2K tax withholding, the participant may make a rollover of anything up to $10K. The Plan does not care what financial bucket that money comes from, but the Plan will normally want proof that the rollover does not exceed the total distribution.

Agree. FWIW, I checked the Gray Book (discontinued after 2015) and found nothing on point. @Luke Bailey, might there be a relevant Q&A in some prior IRS/ABA conversation?

Does the Plan accept rollovers?

Here is another thought: Contact one or more of the dozen or so Enrolled Actuaries who also have a JD after their name.

And additional discussion here:

DB plan sponsor is an insurance company, currently in receivership under its state insurance department. This status has not altered the plan's requirement to do annual valuations, file 5500, etc.; the actuary prior to receivership is still in place. The prospects for rehabilitation (and/or coming out of receivership) are virtually nil. While there is no formal statement yet from the state DOI, it appears likely the DOI will seek to have the PBGC take over the plan. (The plan actuary has not been part of discussion, if any, between the DOI and the PBGC.) Most recent AFTAP is around 100%, but a termination ratio is estimated around 70-75%. The plan has been frozen for several years. The plan has an unlimited LS option. The current question is whether any PBGC regs and/or practices would require the plan to suspend (ie, before any formal action by the PBGC) the use of the LS option for anyone currently reaching a benefit commencement date (retirement or otherwise)? My review found nothing on point; checked all the Blue Books, did not see anything in the regs (although that might be easy to miss). Any relevant experience? Ideas/suggestions?

Not the first time for this question:

I see an additional value: an opportunity to put the prior beneficiary designations in front of the participants, requesting changes and/or affirmation.

FWIW, I experimented with my T. Rowe Price account (sorry, no information w/r/t documents or platform): the online system would allow me to change a 50/50 allocation to 50.5% / 49.5%. It would NOT allow me to change to 50/49.

Pardon me, but is there a concern about the original question? The correct 1099 process should be very well-known at the TPA level. Shouldn't it?

Authorship is paramount in the decision process. Tom Poje? yes. Mike Preston? yes. Peter Gulia? yes. Gary Lesser? yes. Others? maybe.

Problems? Who is doing the "assigning"? Minimums? Maximums? Corporate resolution? As always, put on your consulting hat and ask the other questions: what is going on? what are you trying to accomplish?

Avoid the word "fire". Use the word "resign". Be polite and direct. If there is any work in progress, make sure you address it.

Use the Search feature, with words such as "embezzle", "theft", etc.

Is there some reason the participant does not immediately eliminate this doubt by submitting a NEW beneficiary designation?

It would surprise me if this question is not already answered in the plan document.

What does the plan say? Does the plan include administrator flexibility to purchase an annuity? Hint: most plans do. If so, the word "termination" is not relevant. BTW, if the plan does make such a purchase, please avoid the phrase "pay out the retirees".

Could the NRA be defined as "age 59-1/2 + 5 years of plan participation" (ie, the plan definition in original post above), but not later than "age 65 + the fifth anniversary..." (ie, the statutory limit)?

In advance, consider how this status might change if credentials change (quit, die, retire, etc.)

It's worth asking.

My spreadsheet goes to 120, although that table goes only to 110. (Limit to 3 decimals? No way.) 80 68.6052744 81 65.5978053 82 62.7009606 83 59.9159730 84 57.2396120 85 54.6642242

Every pension actuary (and Plan Administrator) has worried about this since RMDs became a thing. To date, there is no consensus. (I'm mostly retired, so it's possible my info is out-of-date.) This problem has a corollary: what do we do now to minimize the problem later? My recommendation is to "put the fear of God" into them as they are walking out the door; ie, remind them that (1) keep the paperwork that we give you because it means you have a deferred benefit and there might be a surviving spouse benefit, and (2) it is your responsibility to keep us informed of your mailing address, and (3) you will be taxed on the benefit at NRD even if you don't start receiving it. @Carol V. Calhoun, I don't pretend this is foolproof, but I have seen some HR departments recognize that it helps. Having the sponsor's attorney reinforce the actuary's suggestion might also be helpful.

There is what's required, and then there is what's wise. Send them some type of notice.