david rigby

I've seen a few sponsors who don't want to file the extension form for fear that it's "one more thing that could trigger an audit". I'm not accusing them of being paranoid; just sayin'. (I'm pretty sure the IRS has said, point blank, that such filing will not in any way influence the occurrence of an audit.)

Assuming the original poster is the plan's TPA, the advice in posts 7 and 8 seems appropriate. However, the TPA still has to observe proper procedures. Likely, that includes "taking orders" only from certain people, which may include legal counsel for the plan. The TPA may have observed (correctly) a criminal act, but that does not give the TPA authority to act outside its procedures. Perhaps the TPA will get advice from its own legal counsel.

Just requesting clarification: transfer or distribution upon plan termination?

Perhaps I misunderstand the discussion about address. Do you have a valid address? If the address is know to be invalid, it seems fruitless to mail anything.

Instructions can be found here: http://www.dol.gov/ebsa/5500main.html

I can think of (at least) two ways to interpret the phrase (original post) "...paying phony compensation...". In the interest of clarity, can you define what you mean?

Just so we understand all sides of this issue, I wonder if you can obtain, and post, the reasoning alluded to in the original post.

Also, consider that those who are willing to abuse (some might be eager to abuse, not just "bend" the rules) may now see an incentive to drop the vanilla prototype and use an individually designed plan. The vast majority of these will be below the audit threshold, so there will be less protection for the rank and file employees. If you think this isn't going to happen, then I might have some south Florida land to sell you. Future internet searches will find this message as an early warning. I'm just sayin'.

Required? By whom? For what purpose? In the past, restated documents were to make it easier on IRS reviewers. Seriously, your desire for a clean document is great, but I foresee that problem getting worse. And more abuse. And more outright discrimination. Since a DL is never required, those who want to abuse will be (essentially) given a green light to proceed.

Market-based or not, it's likely the compensation of the former owner is governed by (or at least influenced by) a contract/employment agreement.

Not accusing anyone of "fibbing", but my spidey-sense tells me to be skeptical that the agent ever talked to the legal department. Aside from the comments in Post #2, there is also the question of whether the DB plan should have any life insurance. This is not an academic question, and deserves an answer.

Don't overlook the other option: keep the plan. Further cash funding will likely be covering the shortfall, which just happens to the owners. I recommend some frank discussion between the owners and the actuary.

Hmmm. In addition to its poor communication of the DB plan, this ER has a much larger employee relations problem.

Yes, review the 'self-correction" literature. The only Gray Book Q&A on point is 2008-44: QUESTION 44 Other DB Plan Issues: Termination/Rehire – Impact on Payment of Benefits An individual terminates employment and becomes eligible for distributions from the employer’s DB and DC plans. Distributions are available to commence any time through NRD and may be paid in lump sum or annuity form. The individual begins employment with an unrelated firm. Some time later, the individual is rehired by a company within the employer’s controlled group (or the new company is purchased by the old company). Does the rehire (or purchase) change the status of the individual’s bona fide severance from employment for purposes of IRC §§ 401(a), 401(k)(2)(B)(i)(I), or -- in the case of a tax-exempt employer -- 403(b)(11)(A) RESPONSE The rehire does not change the status of the original severance from employment. Absent plan provisions specifying that benefit distribution rights are suspended, or that benefits in pay status cease upon re-employment, the participant would have a right to assert a claim for benefits on account of the original bona fide termination. A plan amendment adding rules to such a plan to mandate deferral or suspension on account of rehire within the controlled group would violate the anticutback rule if imposed on previously accrued benefits. As noted in the response to question 21 of the 1999 EA Gray Book, “re-employment does not inhibit the ability to permit a distribution on account of "separation from service" based on the earlier termination of employment.” Copyright © 2008, Enrolled Actuaries Meeting All rights reserved by Enrolled Actuaries Meeting. Permission is granted to print or otherwise reproduce a limited number of copies of the material on the diskette for personal, internal, classroom, or other instructional use, on the condition that the foregoing copyright notice is used so as to give reasonable notice of the copyright of the Enrolled Actuaries Meeting. This consent for free limited copying without prior consent of the Enrolled Actuaries Meeting does not extend to making copies for general distribution, for advertising or promotional purposes, for inclusion in new collective works, or for sale or resale.

This is off-topic, but just in case: The sequence of events in the original post suggests that the decision to terminate Plan A was terminated after the company was sold. If that is correct, and if the sale was stock/ownership of A (rather than merely assets of A), then the (now former) owners of A may not have had any authority to initiate a plan termination.

The reason some admin procedures specify an original certificate is that it (probably) satisfies the issue of what to do next if you suspect fraud.

Maybe. My experience with "missing participants" is not deaths, but more likely the person has returned to his/her native country.

Since a Yes/No answer might be problematic, I'll get the discussion started (sorry, no chance to check EOB): 1. ERISA does pre-empt escheat laws w/r/t account/accrued benefit in a qualfied plan, but not w/r/t an (apparently abandoned) IRA. 2 and 3. Might depend on plan provisions. I'm sure other readers have more input.

The owner is entitled to do something stupid. Check.

If you think the order is qualified (and have documented so), just process as is, ASAP. - You are not responsible for poorly drafted (or "unfair") DRO's. - If you give anyone a "heads up" notice, then you may have created a similar responsibility for yourself in the future.

2 Cents touches on an excellent point: why isn't there a requirement to rollover a(ny) lump sum distribution? Of course, Congress pushed that button (a little) when they added IRC 401(a)(31) for direct rollovers/20% withholding. (I doubt we will see anything stronger anytime soon.)

... and sometimes the phrase "trustee to trustee transfer" is used when the actual event is a plan merger.

BTW, link to statute, https://www.law.cornell.edu/uscode/text/42/666

Data as of 30-JUN-15 (Tuesday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 4.19 4.19 Aa 4.33 4.25 4.29 A 4.42 4.51 4.47 Baa 5.19 5.17 5.18 Avg 4.65 4.53 4.59 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.34 Medium-Term (5-10 yrs) 1.95 Long-Term (10+ yrs) 2.86

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