GMK

Our cover letter for the fund transfer states that the funds are pre-tax (if they are). We process distributions. We ask for the phone number and a contact person on the distribution request form. The people who answer the phone are good about giving us confirming information. I do not know why. Maybe they are just nice people. Maybe it's because we are going to send them a wad of money. Doesn't really matter. We also try to be helpful when they call to get information about the transfer.

Contacting IRA sponsors is usually pretty quick and easy, but ... another approach could be to send a form cover letter a) stating that the participant has indicated that the receiving account is a traditional IRA (or is not a Roth IRA or however you wish to word it) and b) requesting confirmation for your records. Probably better to do this before distributing, but better late than never.

We added a line on the Distribution Form that the participant files, asking if this rollover is to a Roth IRA. If necessary, we can contact the IRA sponsor and ask them to confirm one way or the other.

I believe it's a Report button (not Reply) you were seeking. (I like the "troll-tender" part.)

I'm with you on that.

I think I heard or read somewhere that plan qualification depends on administering the plan in accordance with the provisions of the plan document. I'm with Bird.

Regarding non-spousal distributions, you may find this thread interesting: http://benefitslink.com/boards/index.php?showtopic=39340 including the update that Appleby brought to our attention (near end of first page of the thread).

Even those who defer 6% won't have any catch ups. See the numbers in Tom Poje's post (#3, above). I don't see any way you can avoid the year end calculations to determine which participants actually contributed catch ups and how much. No matter that the election forms list deferral and catch-up election choices and no matter what participants think they have elected, their deferrals must exceed 402(g) before there are any catch-ups. Read posts #5 and #7 again, carefully.

That's just plain rude, Mr. Wallach.

I have no cites. Sorry. Check with the plan's lawyer. I believe the 75 (or 100) shareholder limit is not an issue, because the buy-back is immediate (so participants are not shareholders as of the beginning of the day), as noted in this post: http://benefitslink.com/boards/index.php?showtopic=36021 That post also addresses but does not answer the question of the authority for a call option on a stock distribution to a participant, and my quick search did not come up with the answer. Maybe someone else on these boards will clarify this. I agree that the -7 regs prevent a call right with respect to financed shares, but in my example none of the shares involved are financed. They are shares already allocated to (and distributed from) participants' accounts and shares contributed by the company. Sorry I couldn't be of more help.

Tot, maybe I'm missing something, but... If the ESOP could distribute shares, then the S corp status is maintained if the shares that the ESOP distributes are immediately and automatically purchased by the ESOP or by the company. So, if the company buys the distributed shares and makes its contribution to the ESOP in shares, then the ESOP avoids the need for record keeping of loans. If the plan document says that contributions are allocated by compensation, then the contributed shares are allocated as you want them to be. By the way, aren't the shares distributed to the retired persons already in (allocated to) their accounts in the ESOP? I don't see why the annual contribution must cover their distributions ... but maybe I'm missing something.

Chelsi - If you go back to the judge to get the order changed (which is the most expeditious option), having your ex's approval of the change in writing will probably help move things along. I'm assuming you know or can agree to the dollar amount to list in the DRO.

Remove the ")" from the end of the link and it works: http://www.ins.state.ny.us/cobra/cobra_prem.htm (edit:) The coverages under NY state COBRA appear to be available for up to 36 months. I don't know if NY state COBRA coverage is otherwise the same as federal COBRA coverage. In some states, they differ enough (for example, for substitutions) that you have to keep track of both separately, although they can run concurrently.

We don't delay match eligibility, mainly because of the extra administrative overhead to keep track of who is eligible for what.

Seems to me that the QDRO does not need any fancy stuff. It's just got to say all the things that it needs to say to satisfy the plan administrator that it is qualified. Once the judge signs it and the plan administrator determines that it is qualified, it can be executed. Others may have more to say on this.

For starters, from my limited experience in this, distributions paid in cash from the ESOP will be ordinary income. If a lump sum distribution paid to a participant from the ESOP includes shares of company stock (even if the shares are immediately bought back for cash by the company or the plan), then the participant has some NUA (=current value of the stock less basis). I'd recommend that you continue to track basis in the ESOP, or at least keep the records you would need if you had to go back and figure it out. And beginning with the time the company became an S corporation, think of the ESOP as a shareholder of the S corporation. Earnings that pass thru to shareholders also pass thru to the ESOP and add to the basis of the stock in each participant's account. And the basis per account changes with the allocation of stock that the ESOP acquires and allocated forfeitures.

Don't have an answer to your first question. On your side note, many prefer to run the cafeteria plan year coincident with welfare plan year, 11/1 to 10/31. However, for a discussion of why 1/1 to 12/31 is not a good choice, see Jacmo's comments in this link: http://benefitslink.com/boards/index.php?s...renewal+january

I agree with RLL. The put option gives the employee the right to REQUIRE the company or plan to buy the stock during those 60 day periods. It does not prevent a mutually-agreed-to sale at other times. One caution: Before selling the stock to another employee, check with the company to see if the by-laws restrict the sale or ownership of the stock. Sometimes you must offer the stock to the company or plan first, before you can sell it to another person. And there may be other restrictions on the ownership of the closely held stock.

I am neither a lawyer nor an enforcement officer, but I have watched people play those roles on TV. That said, what comes to mind as a worst case scenario is that someone in the company decides not to provide the facts as they know them in response to an official US government request, and someone in DC decides that the company's someone is abetting an effort to defraud the government. On the other hand, the company may simply end up confirming what the former CEO already told the DOL. My opinion: The new CEO should say, "Send the information to the DOL." And oriecat, who just posted, makes some excellent points.

This article: http://www.stabenefits.com/stabenefits.com...iles/cobra1.pdf says that the employer penalties for non ARRA compliance are the same as under COBRA without the subsidy (see page 30). This is listed under notice requirements, but I found nothing to say it doesn't also apply to other non compliance. So, maybe like $100/day. Everyone wants to the right thing for the former employee, but no one is sure what that is. Just send the DOL the facts. Who knows? The DOL may decide that the former employee is an AEI. When it's this easy to get a definitive answer, there's no excuse for not responding to the DOL request.

It ain't gonna go away by itself. Not responding is lose-lose. One approach is to deny the claim, because the company thinks the subsidy does not apply. Then, because the company wants to do the right thing, assist the former employee with filing the appeal. Here's a site to get started on the appeal: http://www.continuationcoverage.net/ When in doubt, let Uncle Sam say whether or not the subsidy applies.

Yes, the Alternative Payees' account is usually expected to pay its share of the dues. The Plan Document specifies who (employee, participant, beneficiary) is eligible for other transactions. Whether or not others on this board provide their comments, I suggest that you prepare a list of questions specific to your plan to ask your plan counsel. And be sure to have your counsel review the DRO before it is proclaimed to be qualified.

Generally, an Alternate Payee has the same choices as a participant. If a participant has options to choose to defer a distribution payment, the AP will have those same options. The QDRO cannot give the AP options that participants don't already have. ... unless I missed something here.

Nice phrasing, SoCal, especially in a 'BallPark' thread on these boards.

Thank you, Bird. Yes the RMD comment was, as you surmised, only regarding one less thing in the process.