jlf

Committee Reports on P.L. 102-318 (Unemployment Compensation Amendments of 1992)states the following: ".0013 Rollover and Withholding on non-periodic pension distributions (secs. 511-513 of the bill and secs.402 and 3405 of the Code.)" "Present Law:" "Distributions from tax-qualified pension plans (secs. 401(a)), qualified annuity plans (sec.403(a)), and tax-sheltered annuities (sec. 403(B)) generally are includable in gross income in the year paid or distributed under the rules relating to the taxation of annuities. A total or partial distribution of the balance to the credit of the employee under a qualified plan, a qualified annuity plan or a tax-sheltered annuity may, under certain circumstances, be rolled over tax free to another plan or annuity or to an individual retirement arrangement (IRA). A rollover of a partial distribution is permitted if (1) the distribution equals at least 50% of the balance to the credit of the employee, (2) the distribution is not one of a series of periodic payments, (3) the distribution is made on account of death, disability, or separation from service, and (4) the employee elects rollover treatment................." "Reasons for Change:" "The complexity of the present-law rollover rules create needless problems for individual taxpayers. For example, the restrictions on rollovers lead to inadvertent failures to satisfy the rollover requirements. Liberalization of the rollover rules will increase the flexibility of taxpayers in determining the time of the income inclusion of pension distributions and will encourage taxpayers to use pension distributions to provide retirement income.........." The above quotations from the Committee Reports shows, without any doubt whatsoever, that the lawmakers clearly intended to repeal restrictions for distrbutions to be eligible for rollover treatment. The Court's decision is a simple case of judicial usurpation of Legislative authority. The 106th Congress should once again clarify that eligible rollover distributions are not subject to the early distribution restrictions of 403(B)(7)(A)(ii) and (11). Is there anyone out there that believes the second circuit made the wrong the decision? ------------------ [This message has been edited by jlf (edited 04-01-99).] [This message has been edited by jlf (edited 04-01-99).] [This message has been edited by jlf (edited 04-07-99).]

Please take a look at the "Retirement Plans in General" message board. Look for the topic: "what qualifies a distribution for rollover treatment"? Is there anyone out there that disagrees with the Court? Thanks, JOEL L. FRANK. ------------------

The answer is NO!!!!! Prior the the UCA'92 "hardship" was not one of the triggering events under "403(B)8 Rollover Amounts". It was only after UCA'92 when the 403(B) industry, for obvious reasons, decided to utilize paragraphs (7)(A)(ii) and (11) to ALSO govern rollover eligibility that hardship distributions qualified for rollover treatment. This industry practice was erroneously rubber stamped by the IRS and the Courts. This is added proof that the 102nd Congress (UCA'92) had absolutely no intention of REPLACING the the repealed triggering events of 403(B)8 with the triggering events of 403(B)(7)(A)(ii)and (11). As I stated earlier the statutory definition of an "eligible rollover distribution" is "any distribution......". The Court, therefore, erroneously ruled when it decided to limit rollover treatment only to those specific distributions that qualify for early distribution under 403(B)(7)(A)(ii) and (11). ------------------ [This message has been edited by jlf (edited 03-29-99).]

Dear Dave, I'm addressing you because you have been the only one to respond to this topic. Assumptions: Pre-UCA'92, a hardship distribution is made under paragraphs (7)(A)(ii) and or (11) of IRC section 403(b).The distribution represents at least half of the account balance. Q. Is this distribution permitted to be rolled over to another 403(b)/IRA? Remember, this is a pre-UCA case. [This message has been edited by jlf (edited 03-16-99).]

Check your Plan Document. You probably have a "define benefit" plan. The "benefit" is guaranteed by the Plan Sponsor. Your "vested" benefit is your right to receive the employer's portion at "normal retirement age" and not a minute before. You are probably compelled to accept at "normal retirement age" a life annuity comprised of your contributions and those of your employer's. You should feel "good" about this arrangement; afterall, for the remainder of your life all the investment earnings in excess of the guaranteed interest rate will be used to help balance the employer's budget. CHECK TO SEE IF YOU HAVE A COLA TO LOOK FORWARD TO! ------------------

From the inception of 403(b) in 1959 until 12-31-88 there were no restrictions on taxable distributions from 403(b)1 annuities. The Code did not provide a rollover provision until 1-1-79. Effective 1-1-79, upon satisfying a triggering event one could effectuate a rollover. Thus, from 1-1-79 until 12-31-88 a 403(b)1 particpant needed to satisfy a triggering event to effectuate a rollover distribution; but was permitted to make taxable distributions at will.(THESE UNRESTRICTED TAXABLE DISTRIBUTIONS JEOPARDIZED THE TAX-DEFERRED STATUS OF THESE ANNUITY CONTRACTS). Efective 1-1-89 the Code imposed, for the first time, triggering events for taxable distributions on 403(b)1 annuity contracts. Thus, from 1-1-89 until 12-31-92,the Code required triggering events for both kinds of distributions,tax-free rollovers and taxable withdrawals. With the UCA'92 the Congress finally got it right: It realized that to require triggering events for rollover amounts serves no purpose. It, therefore, repealed triggering events for rollover purposes only. Effective 1-1-93, it is indeed a misapprension of the relevant Code provisions to require triggering events for distributions to be afforded rollover treatment.

I believe Chester is wrong. Under IRC section 414(h) an employer may "pick up" the employee's contribution. It,thus, becomes a pre-tax contribution of the employee. ------------------

Where can I get a list of DB Plans offering the MRD option? Are their any government DB plans that offer this option?