david rigby

Thanks for the info. I wonder if this issue has ever been discussed as possible legislative change, or if there have been other examples, such as court cases or NLRB "commentary". I am troubled by the issue being decided thru PLR's. Seems like the statute could easily address this issue. I might even be happy if the IRS reached a conclusion in a reg., but then you could build a case to say that the silence of the statute and reg is a conclusion.

Yes. See IRC 401(d). http://www4.law.cornell.edu/uscode/26/401.html

It appears that IRC 423 http://www4.law.cornell.edu/uscode/26/423.html and the regs. thereunder http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html make no disctinction regarding collectively bargained employees. See especially 1.423-2(e).

If the stock is not publicly traded, then the Plan likely has an option for you to receive it in cash. Might be a requirement, since there might be a requirement that all stock be owned by employees. Check the SPD.

First things first. A distribution from a 401(k) plan cannot occur unless you have a severance of employment (in general, although there are some exceptions). Are you stating that your layoff was a severance of employment? If so, then look to the terms of the plan to see what options there are. For example, if the value of your account(s) is $5K or less, then the plan might (but not necessarily) state that your account will be distributed to you. If over that amount, it may be distributed, with you being the one who decides. In either case, you should be given the option of receiving the distribution in the form of a direct rollover to an IRA, or paid directly to you. The latter case requires a 20% withholding for federal tax purposes. Locate, and read, a copy of the Summary Plan Description (SPD).

Or read the regs. directly: http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html

IRC 401(a)(13) also addresses this. Here is the first part of that subsection: (13) Assignment and alienation.-- (A) In general.--A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that benefits provided under the plan may not be assigned or alienated. For purposes of the preceding sentence, there shall not be taken into account any voluntary and revocable assignment of not to exceed 10 percent of any benefit payment made by any participant who is receiving benefits under the plan unless the assignment or alienation is made for purposes of defraying plan administration costs. For purposes of this paragraph a loan made to a participant or beneficiary shall not be treated as an assignment or alienation if such loan is secured by the participant's accrued nonforfeitable benefit and is exempt from the tax imposed by section 4975 (relating to tax on prohibited transactions) by reason of section 4975(d)(1). This paragraph shall take effect on January 1, 1976 and shall not apply to assignments which were irrevocable on September 2, 1974. There are some exceptions, such as QDRO's. IRC sections relevant to employee benefits can be accessed here: http://www.benefitslink.com/taxcode/index.shtml

The PWBA has online advisory opinions back to 1992: http://www.dol.gov/dol/pwba/public/program...ams/ori/ori.htm If you go here, you can request other info from the PWBA: http://www.dol.gov/dol/pwba/public/pubs/ho...tob/howtobt.htm

I agree, except that I think the commencement of benefits is at the option of the employee: "... benefits may commence..." Another variation is that the plan could be amended to permit commencement at NRD, but cannot permit commencement at ERD, assuming this is a qualified plan. Thus, in the original situation, we are assuming the 70-1/2 employee is at or beyond NRD.

I'm not sure but have been told that merger at 12/31/2001 is preferable to 1/1/2002. The latter gives you a one-day plan year.

Actually, it is in writing. See Q&A's T-13 and T-15 in the top heavy regs. 1.416-1.

I am reviewing a draft QDRO for a conventional DB pension plan. The date of divorce is after the participant's date of hire, but prior to the participant's date of participation. Upon participation, the participant gets a full year of credited service back to January 1 (which precedes the date of divorce). Got the picture? Specifically, it awards X% of the participant's accrued benefit "as of date of divorce" to alternate payee. Does this have any force? Could it (assuming all other provisions OK) be a valid QDRO but with an award of zero dollars? Could it be construed to award part of the benefit which has not yet been earned as of date of divorce? What responsibility does the plan sponsor have to point out these issues? (Sorry, that is kind of open ended.)

I guess there could also be different treatment of service based on acquisition dates as well. For example, Corp. A acquires Sub. B in 1995. Sub. B does not have any qualified plan. B is not covered under the Corp.A plan until 1998. Employees with Sub. B should have all service since acquistition date recognized for vesting purposes. A could recognize service prior to 1995 but is not required to do so. And the plan amendment which recognizes B as a participating employer should state this. Did I get that right?

For those of use who don't have that Opinion Letter, the conclusion is what?

Again, Keith is correct. The unfunded CL is a minimum to the deductible limit, for plans with more than 100 participants. See IRC 404(a)(1)(D). The AFC issues are not relevant. I also agree that this amount is determined as of the end of the plan year.

I don't do this ratio, but I agree with your reasoning that AV seems to be the appropriate value. We do show a "benefit security ratio", which is MV assets divided by PVAB (using funding assumptions).

I thought the emphasis was on "not readily tradeable on an established market".

Not necessarily. What kind of plan is this? profit-sharing? defined benefit pension? ESOP? 401(k)? more than one of the above?

... remembering that there is a difference between "guardian of the person" and guardian of the person's estate".

Not a lawyer, but I thought that it was the Fourteenth Amendment that provided that extension.

From the original post, it is not clear whether the participant is entitled to a distribution. Just "requesting a distribution" is not enough.

This is the most recent summary of state tax withholding provisions that I have seen: http://www.cigna.com/professional/pdf/CPA_iidw0201.PDF I'm pretty sure some things are out of date. Does anyone have a more up to date / complete list or link? (Interestingly, if you look for this on the Cigna website, the link is inactive.)

And make sure you get a US attorney who knows the meaning and importance of a QDRO. Interview. If the proposed attorney does not seem to have immediate sense of importance for this, then keep shopping.

I don't know if there is specific IRS guidance on this. If none is available, I would fall back on common sense. For example, if the check bounced due to some simple oversight, then you might be able to claim that it was made. If the sponsor wrote the check knowing that there was insuffucient funds, then that looks to me like there was no payment. How do you prove this? Good question. Seek out anything that could document actions and intentions.

Are you sure that the due date was 9/18/00? My calendar says the 8-1/2 months after 12/31/99 was 9/15/2000.