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If the distributee has not filed a W-4P with the payer, the payer will withhold based on married with 3 withholding allowances. A withholding allowance is worth $723.00. The value of the allowances is subtracted from the gross periodic payment with the remainder subject to withholding. Best wishes, Joel L. Frank

Hopefully the eligible employers will see that offering employees an opportunity to max out on a 403b as well as a 457 can alleviate the nationwide shortage of teachers and nurses. Think of the post age 55 crowd that have never put any meaningful amount into either plan. NOW THIS IS A REAL WAY TO "CATCH-UP"!!! Even though they are eligible to retire they may very well put the date off for a couple of years. Best wishes, Joel L. Frank

Sorry for the typo, Carol. Best, Joel L. Frank

Dear Caro, when you get a chance...... please reply to my request. Best wishes, Joel L. Frank

Does anyone know of a provider that is actively marketing this opportunity? Can it be effectuated through a single provider? Best wishes, Joel L. Frank

Does the new legislation require the satisfaction of a triggering event, e.g. retirement, in order to effectuate an eligible rollover distribution to an IRA? Or can an eligible rollover distribution be effectuated at any time so long as the Plan Document allows for access to the account balance? I would appreciate reference to the statutory text. Best wishes, Joel L. Frank:)

Was this specifically intended by the lawmakers? Or is it a technical unintened result of the legislation? It surely is unfair to the employees/employers who are not eligible for 457/403b.............the entire for-profit segment of our economy. Best wishes, Joel L. Frank:(

Revenue Ruling 90-24 governs 403(B) transfers. The Ruling does not mention that employer contributions cannot be included in a direct transfer of 403(B) balances. Employer contributions may indeed be included in such a transfer. Best wishes, Joel L. Frank

Must ERISA coverage apply to governmental employers as a condition precedent for such employers to offer a 401(k)? Best wishes, Joel L. Frank

Mr. V.........You may want to pose your question on the 401(k)Message Board. This is the 403(B) Message Board. Best, Joel L. Frank

An actuarially calculated "excess" belongs to the governmental sponsor. The sponsor can use the money to increase benefits or help defray the cost of future funding. The use of the "excess" is at the sole discretion of the governmental unit unless the state retirement statute states otherwise. Best wishes, Joel L. Frank

Dear Mr. "V"... From whose perspective, the plan sponsor or the plan participant?

The total amount withdrawn, $10,000, is comprised of deductible contributions. It seems to me that line 15 of Form 1040 applies to 1099Rs when the gross distribution is not the same as the taxable amount. In the case at hand the gross distribution is the same as the taxable amount. So line 15 cannot be the place to show that the custodian reported the wrong amount as taxable. The Service has already been notified that the taxable amount is $10,000.00. If the distributee places $10,000 on line 15a and zero at 15b he still needs to prove to the Service that he rolled over the $10,000.00 within 60 days. Line 15 alone is not enough. It seems to me that the distributee should attach a statement to his Form 1040. This statement should say that the custodian's labeling the total distribution as taxable is in error. Supporting documents should be attached to the statement showing the date and amount of the withdrawal and the date and amount of the rollover contribution with the successor custodian. This, I believe, is the paper trail that the Service will require. Am I on the right track? Joel L. Frank

The Custodian refuses to issue a corrected 1099R. What should the distributee do to reconcile with the IRS? Joel L. Frank

A public employee retirement system operates an employer funded DB pension fund and an employee funded DC pension fund. The employee funds the DC account through required 414(h) payroll contributions. The RS offers only 2 investment vehicles: a guaranteed interest rate and an equities fund. One may change their investment only once per year and transfer accumulations over either a 12 month or 36 month period. Upon retirement the DC account balance must be annuitized over the retiree's lifetime. Can a case be made for breach of fiduciary responsibility for: 1. Not giving the participant a meaningful choice of investment vehicles? 2. Not affording the participants the right to change their investment more often than once per year? 3. Not affording the participants the right to transfer accumulations among the options in a lump-sum?

Mr. Creek, are you saying it would have been wrong for the custoddian to check off 2b, "Taxable amount not determined"? Joel L. Frank

Some of you may want to see the Court's reasoning in FRANK v. AARONSON. You can read the entire opinion at: http://laws.findlaw.com/2nd/969456.html

John.....Based on my assumptions, is it not wrong to place $10,000 in box 2a, "Taxable amount"? Should not box 2a be left blank and box 2b, "Taxable amount not determined" be checked off instead? A custodian placed $10,000 in box 2a and left box 2b blank. He checked off "Total distribution" and labeled the distribution as normal by placing a "7" in box 7. How could the closing out of the account be coded as a normal distribution? The IRA holder has 60 days to rollover all or any part of the $10,000 to a successor IRA. The former custodian, therefore, did not have enough information to determine the taxable amount of the gross distribution and 2a should have been left blank. Am I correct? Best, Joel L. Frank

The contest between "RMD" and "MRD" has been settled with the issuance of the new regs. Required Minimum Distributions, RMD, is the winner. Best wishes, Joel L. Frank

Assume an IRA holder closes out his IRA account for $10,000. The check is made payable to the IRA holder. Which boxes are checked on the 1099-R?

The use of the early distribution events of sections 403(B)(7)(A)(ii) and 403(b)11 to also govern eligibility for rollover treatment renders the triggering events under section 403(B)8, the rollover provision of section 403(B), which were repealed under the Unemployment Compensation Amendments of 1992, meaningless. Moreover, insofar as 403(b)11 went into effect on January 1, 1989 the application of section 403(b)11 to rollovers has the result of bifurcating the employee's account balance between pre-1989 and post 1988 amounts with reference to their eligibility for rollover treatment. Example: Assume a 12/31/00 balance of $500,000.00 with a balance of $200,000.00 on 12/31/88. The employee is free to rollover only $200,000 at will because the triggering events under section 403(B)8, the rollover provision, were eliminated. The employee may only rollover the post 1988 balance of $300,000.00 upon satisfying one of the early distribution events under section 403(b)11 because section 403(b)11 went into effect on 1/1/89. Congress never intended that a bifurcation would be the result of its repeal of the distribution events under section 403(B)8, the rollover provision of section 403(B). Is there anyone out there that believes that Congress wanted to repeal rollover distribution events for just pre 1989 amounts? Apparently the United States Court of Appeals for the 2nd Circuit does. See FRANK V. ARRONSON at: http://laws.findlaw.com/2nd/969456.html. I call on all the pros in the 403(B) community to request a Congressional clarification on this issue. Joel L. Frank

Isofar as you separated from service you may withdraw the 403b money at will. There is no necessity to prove or claim hardship. Best wishes, Joel L. Frank

Joe.....Have you determined if in fact your plan is an ERISA plan? What kind of non-profit organization is the employer?

Joseph....get a copy of Revenue Ruling 90-24. See if they will honor your request for a transfer of funds under this Ruling. THEY HAVE THE DISCRETION TO DO SO. As an alternative solution try to get your employer to add your old 403b carrier to its 403b program.

DB plan participant dies in service. The non-spouse beneficiary receives a lump-sum distribution equal to the present value of what would have been future pension payments to the deceased. Is there any way this non-spouse beneficiary may defer taxation on this distribution?