PJ2009

I believe I have found the answer. According to 414(v)(6)(iii), an "applicable employer plan" means an eligible deferred compensation plan under section 457 of an eligible employer described in section 457(e)(1)(A)." Section 457(e)(1)(A) defines an "eligible employer" as "a State, political subdivision of a State, and any agency or instrumentality of a State of political subdivision of a State..." I'm not sure why such a distinction was made, but it appears that participants in "non-governmental" 457 plans are not eligible for catch-up contributions. However, they are eligible for the $16,500 in deferrals, even if they defer a separate $16,500 under a 403(b), correct? Am I missing anything here? Calling all 457 experts! Thanks again.

It is my understanding that EGTRRA removed the restriction on making elective deferrals under both 403(b) and 457(b) plans. In other words, an employee participating in both types of plans can defer $16,500 under each plan in 2010, for a total of $33,000 in elective deferrals. If the employee has reached age 50, can he also make a catch-up under each plan ($5,500 +5,500 = 11,000)? I have read various restrictions, such as the requirement that the employee must be within 3 years of retirement and that the 457(b) catch-up can only be made if the plan is a governmental plan. Also, there is mention of a "special" catch-up. Is that in addition to the "regular" catch-up of $5,500? As you can tell, 457 is new to me. Thanks much.

Hey, June and Ward were awesome! Then again, they could be fierce when scolding the kids... Anyway, I am a relatively new poster, and didn't realize how taboo the fee subject was. Now I know better. Thank you.

yes 401a and 403b plans-65,500 yes- 457b plan 16,500 no- 457b plan 5,500 catch up b/c there is no catch up in a non profit 457b plan However the employee could do a 5,500 catch up in the 403b plan if age 50. To be eligible for the 457b the employee must be a member of the top hat group- e.g., a select group of management or highly compensated employees as defined by the employer. Thank you for the confirmation. Very helpful!

Incorrect to voice an opinion? You, sir, are the one who is incorrect.

I am also very grateful to Dave Baker for providing this valuable free service. That is why I felt it was unfortunate that the individual who posed the question got absolutely no help and in fact was treated rudely. I realize we can't opine on matters of fees, but a little guidance can go a long way. That is why I responded with something that might help him with his dilemma. Fees are a huge dilemma for all of us and it would be nice to know that we can ask a question that might be "over the line" and get something in return. We are all under a lot of stress, and I understand that a little levity goes a long way, but I think the rude comments above "crossed the line." In any event, this is just my opinion.

Clearly, a 401(a) plan and a 403(b) plan must be aggregated when applying the 402(g) limits and catch-up contributions. But what if the employer has a 403(b) plan and a 457 plan? Can the 50+ employee contribute $16,500 in elective deferrals and $5,500 in catch-up contributions to each plan, essentially "double dipping"? I have not found clear authority on this matter, but have noted that 457 plans seem to be treated separately for so many of the retirement plan rules. Thank you!

Consider what you charged for the 415 amendment. Compare the amount of work involved and price accordingly.

This is a real situation! In addition to everything in this series of postings, can the tax-exempt employer add a third plan - 457(b) and thereby get the employee another $16,500 in deferrals and $5,500 in catch up contributions? Here is our hopeful "max out" scenario: 401(a) Plan - $49,000 total 415 403(b) Plan - $16,500 deferrals 457(b) Plan - $16,500 deferrals 457(b) Plan - $5,500 catch-up TOTAL PERMITTED CONTRIBUTIONS 2010 - $87,500 Thanks in advance for any input.

That was going to be my next question, but I have a couple more related questions. 1. Is 12/31/09 the deadline for calendar year DC plans only? Non-CY plan amendments due by the end of their 2009 PY? 2. Is a model DC PPA amendment available from the IRS? I would doubt it. 3. If we have to prepare an amendment, is the QOSA the only provisions that needs to be addressed for DC plans? I would be surprised if that is the case. Thank you again and welcome to Monday.

The deadline was published in Announcement 2008-23. OK, that makes sense. Thank you very much.

Another very confusing area. The participant was covered by a life insurance contract held in the plan. Upon his death, his spouse received life insurance benefits, which are clearly non-taxable and therefore cannot be rolled over. All PS-58s were reported. 1. Is it true that the difference between the cash surrender value and any basis is taxable, and therefore is rollover eligible? Or I am completely confused? 2. The balance of the account (non-insurance portion) would be rolloer eligible, correct? 2. If both (1) and (2) are rolled over, there would be no 20% withholding, correct? 3. Are there cites for this? I am coming up empty. Many thanks.

According to Rev. Proc. 2007-44 at section 18.01, it appears that volume submitters are required to be submitted by January 31, 2011. However, I have been hearing that the real deadline is April 30, 2010 according to more recent guidance. Could someone confirm that the date in 2007-44 was in fact move forward or that I am perhaps misreading that section? Again, this stuff is clear as mud! Many thanks!!!

Thank you. That is what I thought, but appreciate the "second set of eyes". Have a great week.

I agree that this is confusing. In my situation, the plan is a single employer profit sharing plan. Single sum distributions were made during the year, but they were not "in kind". In addition, these distributions were made using the EIN of the plan sponsor/plan administrator. Schedule R would NOT be required, correct? Thanks much.

Wow...thank you everybody. I guess I have my work cut out for me.

Our Special Tax Notice needs to be updated for the Roth IRA rollover language. Is there a new "model' notice available anywhere that has this language? Thanks and welcome to Monday!

Duh, there it is "Attention" - it's Friday, folks! Many thanks for your response, which I agree with.

I am preparing a 1099-R for 2008, which was inadvertently overlooked. Questions: 1. Can we simply "type" the form on the form I printed from the IRS website and submit it, or is there a special type of paper I should use which can only be ordered from the IRS? As you can tell, this is my first venture into reporting land in awhile. 2. Should we simply file it as if it were not late and wait for any repercussions from the IRS, or is there a "late" procedure I need to be following? Thank you, and Happy Rosh Hashanah to Jewish users.

A physician client wishes to make use of the self-directed brokerage account feature, which provides that the participant must use a broker dealer and invest in publicly-traded securities only. He has specifcally asked for the removal of such restrictions. However, we are concerned that the risk he is taking on is enormous. My questions are: 1. What exactly is a prudent investment under ERISA? 2. How could an individual invest in securities or even commodities without using a broker dealer? 3. What other risks does this request entail?

You may be thinking of a hardship distribution, which often requires that elective deferrals be suspended for a period of time. However, the loan policy or plan document may require that elective deferrals be suspended, but this is not a legal requirement. You should request a copy of your SPD, plan document, and plan loan policy.

I have always taken a broad view of the regulatory mandate that all "participants" be provided with the SAR. To me, this means any individual with an account balance under the plan. The client is asking whether this includes former employees with deferred vested balances, laid off employees, etc. I am not aware of an exception to this. However, I don't believe that DC plans have to worry about providing the SAR to "beneficiaries" entitled to future benefits. As always, your expertise and experience would be most appreciated. I have not found anything on point.

Many, many thanks! I can see after all. I just overlooked an important announcement.