david rigby

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.

Not disagreeing with the above, and thanks to Dave for starting this thread (many of our clients should probably read this), but doesn't there seem to be a danger of "dumbing down"? That is, we (and many consultants, attorneys, etc.) seem to be attentive to the wide variety of interests and abilities of plan participants; there is no such thing as "Joe Average". The more we try to address this, we may be opening the door to others simply assuming "it is up to the plan sponsor to make me understand, and if I screw up, then I can always sue." End of "gripe of the day."

No single answer. The first thing to do is see what the plan document says. Most documents use one of the two most common sets of definitions: 1. One year of vesting service for each plan year in which the EE works at least 1000 hours. 2. One year of vesting service for each plan year in which the EE is employed on both the first and last day of the plan year. Have I oversimplified too much?

Just an opinion, since that language is pretty sparse (that is the nicest word I could think of): Use the UP84 table and the PBGC interest rates for April 1999. Caveat, I think you might have a problem with using April 1999 if the lump sum was actually paid anytime other than May 1999. Second Caveat: If the lump sum is not yet paid, then you likely have a minimum under GATT to worry about, even if not yet adopted.

IRC 411 (in entirety) does not apply to governmental plans. However, the plan itself or some provision of state law might make the plan subject to the application of all or a portion of 411.

Believe it or not, some of us are EA's. We might be able to answer the question if you can state it.

There are always potential anti-cutback issues with any plan amendment. The amendment cannot "take away" any benefit, or right to receive it at a particular point in time, that has accrued as of the later of (a) the effective date of the amendment or (B) the date of its adoption. Most amendments will include some generic provision (or possibly a "preamble") that states the amendment will not reduce any benefit accrued as of the later of (a) or (B). It is possible that your amendment already includes the appropriate language.

You might get beyond the issues of distributable event if (1) the EE is over NRA, and (2) the plan permits in-service distribtions to those over NRA.

What about the IRA rollover option in this Revenue Ruling? http://www.benefitslink.com/IRS/revrul2000-36.shtml

IRS Reg 1.72-9 is here: http://www.access.gpo.gov/nara/cfr/waisidx...6cfr1v2_00.html Good luck getting it to open.

Hope this is what you mean: For the PY beginning in 2001, HCE determination is based on the comp earned in the PY beginning in 2000. If 2000 comp is more than $85000, then the EE is an HCE for 2001.

No tax rate is as high as 100%. Can't imagine why the beneficiary would not want it. BTW, tax on a distribution from a qualified plan is deferred if rolled over into an IRA. Typically, a distribution to surviving spouse is made to the spouse, not to the estate of the deceased. Beneficiary might consider delaying receipt, if that helps make a tax situation any better.