GMK

Is this any help? http://wealthmanagement.com/estate-planning/testamentary-power-appointment

I stand corrected. Thank you. The plan could specify that the entry date is the first day of the pay period that begins after the employee meets eligibility, but it doesn't have to.

which is shorthand for after entry date or after participation date, depending on your plan wording. In any case, as noted, you don't defer on pay earned before your entry date. 401(k) elections are not retroactive.

these may be helpful: http://www.advisorsquare.com/new/coughlanfinancial/content.asp?contentid=2017793647 http://www.obliviousinvestor.com/inherited-ira-rules/ http://www.irs.gov/pub/irs-tege/epchd603.pdf

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits

If your established procedure is to require an original certificate (or if the plan has established such a rule), then you probably should request an original from the beneficiary (treat all participants equally). Otherwise, the plan administrator decides if the death is adequately proven, for example, based on corroborating information, like an on-line obituary.

I agree that the paper trail is needed, but not just as a CYA for when the auditor shows up. I don't see how the plan can move the benefit without the beneficiary's authorization and elections. Spouse beneficiaries in particular have numerous options for what they can do with their beneficiary benefit, and the Plan needs written, not verbal, instructions. As noted above, treat it like any other distribution. And I'd issue the 1099-R for the rollover. (Distributions of beneficiary benefits are not exempt from 1099 reporting, are they?) I agree that writing a check from the plan to the plan is not necessary. Book entry suffices for that.

Presumably the participants who severed from employment in 2014 and earlier are required to take their distributions, perhaps because of their age. If instead they had the option to defer the distribution, then they could wait until the business recovers before they take their distribution, rather than requesting a distribution now that they know will give them zero dollars. Maybe it would be possible to amend the plan to allow those folks to defer their distribution indefinitely, subject to RMD's. Participants who voluntarily request a distribution when the share price is zero will not have a future claim against the plan's people, because those participants knew they would get nothing when they asked for it. If the Plan Document requires distributions to be made and requires the Corporation to buy distributed shares immediately, then that's what the Plan has to do. Persons who are forced to take a distribution (because of age or whatever) might sue if the business later recovers, even though the plan made the distributions exactly as the plan document requires. Whether they could win in court is beyond my knowledge or experience to predict, but it would not be a surprise if somebody filed a claim. Regardless of possible future law suits, the Plan must do what the Plan Document specifies. As ESOP Guy says, ask the plan's ERISA attorney how to proceed.

^Amen!

One simple example: If eligibility is after one year of service with a participation date of the first of the year, then everyone who completes a year of service (and becomes eligible) during 2015 is a participant of January 1, 2015.

Some forms provide for separate elections for deferrals and catch-ups. (I have no idea why.) It is effective in confusing participants, so we made our own election change form.

I agree that it doesn't matter who holds the files as long as the plan sponsor can produce them when the auditor asks for them. Having my own folder of pdf copies is a personal preference, to ensure access. It is also a way to monitor the performance of the service provider ... but that's not the issue at hand. So, check that the service agreement adequately protects the plan sponsor and move on.

Two things that come to mind to check in the service agreement are who has what liability if the records cannot be produced for the auditor, and whether the complete set of records will be transferred when you hire a different record keeper. Personally, I'd get copies for the plan sponsor's files, but that's just me.

If the goal is to provide the annual notices to everybody who is supposed to get them without having to keep track of who is not yet eligible for the plan, then send the notices to everyone with the anti-confusion memo every year and also provide the notices to the new enrollees as part of their pre-enrollment document package. That should cover all the bases and anything else that needs covering.

To reduce confusion, you could include a cover memo that says something like: The attached notices apply to employees who are eligible to participate in the ABC Plan. You become eligible to participate in the ABC Plan when you reach ... and have ...

This is how I learned it: "For required minimum distribution purposes, a 5-percent owner is an employee who is a 5-percent owner with respect to the plan year ending in the calendar year in which the employee attains age 70½." from: http://www.retirementdictionary.com/definitions/5percentowner and after that, you are always a (more-than-) 5% owner. Your RMD for 2015 is your 12/31/2014 balance divided by your life expectancy from the IRS chart. I don't know what to do with the 2014 receivable you mentioned. No doubt, someone here does.

page 3 of this: http://www.asppa.net/Document-Vault/Docs/Conferences/Benefits%20Conference%20of%20the%20South/2013/GS02.aspx says it's true, for what it's worth.

We find it useful to participants if we 'splain that the entire cash distribution adds on top of their other income and that withholding is not the tax bill and could easily be less than the tax bill will be (and in some states there will also be a state income tax to pay). Mandatory withholding at least wakes some people (not all) up to the fact that they will have to pay tax on a cash distribution and increases their interest in what the tax consequences may be for them.

1. Check the plan document. He may not be obligated to take an RMD until he reaches age 70-1/2 or retires, whichever is later. Meaning that, if he can take a distribution while he is still employed, none of it may be RMD, because he hasn't retired yet. 2. Withholding on the RMD amount is 10%, but the participant can choose to have more or 0% withheld. The portion of the distribution that is eligible for rollover is subject to the mandatory 20% withholding.

An alternate payee has the same distribution choices as a participant. From http://www.dol.gov/ebsa/faqs/faq_qdro2.html "What effect does an order that a plan administrator has determined to be a QDRO have on the administration of the plan? The plan administrator must act in accordance with the provisions of the QDRO as if it were a part of the plan. In particular, if, under a plan, a participant has the right to elect the form in which benefits will be paid, and the QDRO gives the alternate payee that right, the plan administrator must permit the alternate payee to exercise that right under the circumstances and in accordance with the terms that would apply to the participant, as if the alternate payee were the participant. Reference: ERISA §§ 206(d)(3)(A), 206(d)(3)(E)(i)(III); IRC §§ 401(a)(13)(B), 414(p)(4)(A)(iii)"

for a moment I pictured OJ riding in a Firebird. Sweet.

Bunker Hill Watergate and the alert Frank Wills OJ and the slow moving white Bronco (aka John Elway Day) .. OK, back to work.

and only if the plan allows (again see the summary plan description). Morningstar is another site for information on how your funds compare with other peer funds. (I have no affiliation with Morningstar. I just find useful information there.)

Seems reasonable to me, too, and it may be correct, but I'd get a lawyer to sign off on it. Back when coverage for adult children to age 26 came in, our state had coverage to age 27, and there was a time when we had to deal with imputed income for certain premiums. The laws got updated, and the imputed income (for a few months) was erased as if it didn't happen, and employees got credited back for whatever it cost them. The point is that this is not necessarily a trivial or reasonable situation. Ridiculous happens.

a few examples: http://www.campingworld.com/rvsales/fifth-wheel-trailer/3/ Disclaimer: This is from google. I have no affiliation with campingworld or any fifth wheeler company or dealer. Closest I got was that my sister in law and her husband had one.