david rigby

Kevin, I agree there could easily be a 415 problem. But, if you make a contribution equal to the forfeitures, what are you deducting?

Might have a problem if either one is union-negotiated, but this is probably a viable technique. If you have an outstanding waiver of minimum funding standards, you might need to run this by the IRS. But remember 411(d)(6). Make sure the merger does not "injure" the participants in the overfunded plan.

I have seen a DB plan and PS plan combined into one document. Even if you can, it's not pretty. It starts off on a bad note, and goes downhill from there. From my experience administering this arrangement, not to mention communicating, I strongly recommend against using one document.

IRS Reg 1.411(d)-4, Q&A-1, subsection (d) lists examples of items that are not 411(d)(6) protected benefits: ..."(4) the availability of loans (other than the distribution of an employee's accreud benefit upon default under a loan)..."

Please forgive the stupid comment, but this doesn't come close to passsing the "smell test." Am I missing something?

There are several texts that could be useful. I suggest looking for a copy (even an old copy) of "Fundamentals of Private Pensions" or "Pension Planning". Neither will be a technical resource, but both can provide some history. Also, try http://www.benefitslink.com/links/20000912-006899.html http://benefitslink.com/boards/index.php?showtopic=5824

http://www.benefitslink.com/IRS/ir2000-82.shtml

I see two things going on. First is the question of taxable income. But the quoted statute mentioned "subject to withholding". This might imply that the entire match is subject to taxation, but only a portion is subject to withholding. Or something else. Terminology can be important.

It is also possible that the ex-spouse was designated as beneficiary IN the divorce, not after.

Actually, there are some governmental 401(k) plans, grandfathered because they were in existence prior to some date. Sorry, I don't know the applicable date.

I think the receiving plan must affirmatively state that it will accept rollovers.

Can't answer the question about "protecting" the money. You need a competent tax professional for that. However, the question about rollover is well-defined: only a spouse has the right of rollover as a beneficiary.

We'll assume that this is not already defined in the plan. Seems reasonable to use the PIA at 65 since that is the definition of NRD. Might need to be careful with any ER benefit though. Any precedent to help?

There may also be a deduction issue. The Internal Revenue Code contains limits on how much a company can deduct for its contributions to all its qualified pension and profit-sharing plans, including ESOPs, 401(k), etc. If the company has "maxed out" using only the ESOP, then no more can be deducted. Putting in a 401(k) would not change the total, only which plan(s) it is spread to, and who is putting it in.

Generally, all of IRC 411 does not apply to a governmental plan, except to the extent that state law, or the plan itself, might apply it.

Not necessarily. Perhaps it would be worthwhile to re-check the plan doc w/r/t to definition of "accrued benefit". Yes the formula would appear to be a problem with respect to the accrual rules of IRC 411 (assuming this plan is subject to 411), but there may (should) be another definition in the plan to describe the accrued benefit at any age. (In many plans, the formula defines the benefit at NRD and the accrued benefit definition describes how that formula is applied at other ages.)

What does the plan say?

That would generally be determined by the terms of the QDRO. Most QDROs I have seen assign some fixed $ or percent, based on the normal form of payment, usually a life annuity. But since a QDRO cannot require a plan to pay out more (measured in total actuarial value), then the administration of the order may necessitate recognizing one or more equivalence factors.

We'll try. Some earier discussions here might be helpful, including some links. http://benefitslink.com/boards/index.php?showtopic=7229 Try this CIGNA link: http://www.cigna.com/professional/news/com...st/y2ksw_w.html (click on State Withholding Information Sheet for a nice summary.) I don't think it has yet been updated for 2001. For example, North Carolina has new rules effective 2001. http://www.dor.state.nc.us/practitioner/in...es/pd-00-2.html

Generic question for Dave Baker (and anyone else who cares to comment): The post above from Appleby contains a fairly lengthy quote from copyrighted material. Is it OK to post such on this board?

Add the Pregnancy Discrmination Act of 1978 to the list Paul mentioned.

That looks correct to me, but there may be another issue. If the plan sponsor distributes a statement that has not been "requested" and it does not have all the ERISA-required items (such as the potential vesting date for those not yet vested), then the sponsor is still subject to the employee request.

I believe the statement required under ERISA should state the vesting percent, and if the EE is not currently vested, include the date on which vesting will first occur.

Looks to me like the question is testing your knowledge of IRC 416©(1)(D). High 5 year average comp is 22,000 (92 thru 96). Seven years of top heavy service. 22000 x .02 x 7 = 3080.

Some good questions. Are you sure that this participant actually received the notice? That notice should have given (at least) an estimate of the amount of the benefit and also identified NRD. If the plan/sponsor has done its job of notification, you can't really go dragging the bushes for potential payees. However, you might be facing a situation where the participant is deceased. If so, then you will then be faced with verifying whether there was a surviving spouse.