GMK

From your original post, it sounded like you were interested in taking the RMD from the pretax account, maybe later in the year, and not from the Roth money. And yes he can, by taking the RMD from the pretax account before doing the Roth rollover. This, of course, will increase his taxable income for the year. If his taxable income will be down a tax bracket in retirement, it's probably wise to just keep doing what he's doing. On the other hand, putting all he can into the Roth (by taking the RMD from the pretax funds) is a good idea for retirement, too. Just gotta figure out which option he likes better. It probably doesn't matter in this case, but the RMD is based on the balance on December 31 of the previous plan year, not January 1 of this year.

http://assets.aarp.org/rgcenter/health/fs149_medicare.pdf http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=5&cad=rja&ved=0CF4QFjAE&url=http%3A%2F%2Fwww.ahip.org%2FMedigap-2012.aspx&ei=waPvUoLnJKSsyAGF24D4BQ&usg=AFQjCNHfUIMTFKFc40qUkvvWtL6V7C48PQ&bvm=bv.60444564,d.aWc There's more if you google: percentage medicare supplemental

And if you're old enough, you can remember previous times when they couldn't. And that was when you could generally equate "degree" with "well educated," and when kids were not told that they were of no value if they didn't go to college. End of abbreviated rant.

According to this: http://money.cnn.com/2014/01/29/retirement/myra-accounts/ myRA will be (is?) a Roth (after tax contributions, tax free withdrawals), and the annual limit is $5,500. didn't read enough to know if there are catch-ups for us old people.

Initial investment is $25. Further contributions are $5 minimum ... but you knew that.

and for others, it's the SOTUM potato, tomato

^ Not to be picky, BG, but isn't it the SOTUA?

Really? If your friend who is a business owner can attract and retain good employees without offering a 401(k), she's doing a lot of other things very well. And if a low return, principal-protected savings plan is the best fit for her workforce, then it would be hard to justify adding the personnel, costs, and headaches of sponsoring a 401(k). I'd be surprised if myRA takes away or slows the growth of any business that provides services to qualified plans. (That said, I too was surprised by Larry Bird in the NBA.) As 12AX7 says, it is more likely to increase business over time. And I'm guessing that ASPPA isn't the only PAC that's using this wonderful/terrible idea as a reason to call for more donations.

Yes, the answer is no. The recipient would have to pay the taxes on the RMD, since the taxable amount would be listed on the 1099-R. But off hand, I don't see any benefit to then pretending it's pretax money, for example, by doing a 60-day rollover. Just have to pay taxes on it again when you take it out of the IRA.

RMD rules apply to a Roth 401(k) (but not to a Roth IRA while the owner is alive). http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Required-Minimum-Distributions

Thanks, BG. I think I get it. The Roth part was already taxable, and they didn't want to add more taxable income by doing the RMD from the pretax part. So, that's their choice, and they get RMD's for perpetuity as a result. From the OP, it sounds like they may be rethinking it, and who knows what they'll do next year.

Sorry, but I don't get it. Is there some reason he couldn't delay the Roth rollover until "later in the year," meaning do the Roth rollover after taking the RMD from the pretax balance?

from a google search: http://www.wickenslaw.com/wp-content/uploads/2014/01/Plan-Correction-Methods-IRS-EPCRS-Program-and-DOL-Voluntary-Compliance-Programs.pdf

For question 5, these may help: http://benefitslink.com/boards/index.php?/topic/47064-2011-cola-rollover-charts/ http://www.irs.gov/pub/irs-tege/rollover_chart.pdf

^ but then you get to upgrade to a Lisa with a Saxophone avatar, right? Congrats, BG.

Not sure if I'm thrilled that I'm gonna live to 98.7 (geez, that's more than my usual body temp), but I agree with ESOPguy that you should check the Plan Doc to see if and under what circumstances the plan allows distributions in excess of the RMD, and if allowed, whether they can be partial distributions.

I stand corrected. I was looking at the OP from a different perspective, but if the question is simply whether the PA has to be correctly identified, I see your point. Thank you.

Certainly takes the fun out of it, doesn't it? but it gives us good stories. For the DRO, I'd return it to the court with the notice that it is not qualified, because it doesn't list the employer as the Plan Administrator, and let the lawyers 'splain it to the judge.

OK, yes, as a significant curtailment of coverage for 125 plans. So far I haven't seen any ACA discussion beyond the basic rule that eligibility for a parent's plan makes you ineligible for the credit and subsidy. I think that residing outside the parent's HMO service area would qualify the adult child for the credits and subsidies, because the child does not have reasonable access to basic health care services, but I have not seen any proclamation to that effect.

I agree that this is like a long vacation, and I don't see it as a qualifying event. This sentence intrigued me, though: For example, if a child who is under age 26 moved (permanently) to the other end of the country, they would be out of the service area, but what is the qualifying event? The law says that the child is still eligible for coverage under the parent's plan. I ask because if living far away can be a qualifying event here, then adult children under age 26 who live far from service area of their parent's plan may have a claim to being eligible for ACA credits and subsidies for Marketplace plans.

^excellent point, BG. If their pay doesn't equal an hourly rate times their recorded hours of work, it'll be hard to classify them as hourly. More likely they're paid a monthly salary for a work schedule that is less than 40 hours a week, but which salary is not based on how many hours they actually work.

I believe you do the same (full year or prospective) for same gender couples as you do for opposite gender couples who get married during the plan year.

Unless the waiver says that it's irrevocable, can't the participant file a written revocation?

Not sure I understand what your client is trying to do, but I would like to see some informed comments from others on this. Does the client want to allow participants to transfer funds from their Roth accounts in the 401(k) into their ESOP accounts? Could maybe do a rollover if there's a distributable event, and the ESOP accepts the rollover. Looks like extra record keeping for the ESOP unless the ESOP already tracks after-tax contributions. And isn't the Roth feature lost, so you're back to (eventually) paying taxes on the earnings in the ESOP? I don't recall reading that you can have a Roth account in an ESOP, but someone will correct me if it's allowed or if I'm maybe looking at this all wrong.

Some thoughts: It will depend on the make up of your workforce and their willingness to change their deferral election. Some participants will go for the maximum match but not defer more, and others will probably never change their initial deferral election. The key to the analysis is to estimate how many of your 4% deferrers would be able and likely to defer more. Depending on how well you know the employees, you may be able to make a fairly accurate estimate of this number, which will be the biggest cost adder. Also for this analysis, I would assume that persons who are not already deferring enough to get the maximum match will not change their deferral rate when you match the first 6% instead of the first 4% of deferrals. I would also assume they will not decrease their deferral rate, which is likely based on take-home pay needs and not on the match formula. So, the cost for them will be the 25% increase in the match rate.