rocknrolls2

For purposes of the minimum distribution rules, are QVECs (otherwise known as VDECs or DECs) subject to the IRA minimum distribution rules or the qualified plan minimum distribution rules? This is critical in 2 respects: the ability or inability of an active employee to defer the required beginning date to retirement and the ability of a deceased spouse to consider the QVEC as his/her own. My research has not disclosed any answer. Under ERTA proposed regs, no deductible contributions could be made to QVECs after 70 1/2. However, for distribution purposes, the QVEC was subject to the rules of Code Section 402(suggesting it was a type of qualified plan). This is not an academic question, so I would sincerely appreciate any thoughts anyone may have on this subject.

Thanks Disco Stu and Harry O! My gut feeling was that, subject to testing, this arrangement would work, given that part-time employees would not be required to be excluded past the statutory minimum. I just wanted to bounce it off you to be sure I hadn't missed anything. Again, thank you for your input on this.

Jim, I understand your point. My understanding of the IRS concern dealt with excluding people not normally scheduled to work 1,000 who actually work 1,000 hours. The proposed scheme would not exclude them but would require them to complete 1,000 hours before they could defer.

Does anyone have any thoughts on whether a plan can permit employees normally scheduled to work 1,000 hours in a year to become eligible after 30-60 days of employment, but require those who are not regularly scheduled to work at least 1,000 hours to actually complete 1,000 hours? I have recently come across these situations in a couple of plans where clients want to do this. Any views on this issue would be sincerely appreciated.

Another option is to use the internet. I just read an article that lists web sites for locating lost participants. There are 2 free sites listed: (http://www.vitalrec.com) and (http://www.tollfree.att.net/tf.html) and a site for which a fee is charged (http://www.1-800USSearch.com). Hope this helps.