ESOP Guy

They can't send the funds a bank that has a branch in the US and Japan? They can't send a check for him to cash at a bank that has both US and Japan branches? Why can't they send the money to Japan? This isn't some third world country and this is the 2013. To answer your questions: No, I would not have the money sent to the employer's account and then wired to the person. By the way make sure you have the tax withholding correct. If this person isn't a US citizen you need a W8-Ben completed or the tax withholding is well above 20%.

Not that is was Cynchbeast's fault but that is one of the best reasons to have the owner be the last person to be paid from a plan in a plan termination.

Everyone would be out to get you if you weren't selling those evil 419(i) things that are tax shelters or maybe they aren't or maybe they are on every other Monday.

At this point I would focus on case law. I think the regulations that could apply here have been covered. I would add I think the company simply has taken a very agressive stand. I wish you luck but this is going to be a tough one to defend. I am unaware of any cases but have to admit I haven't gone looking to defend something like this ever.

Besides I have always been told that the difference between collecting at normal retirement age and 70 is actuararly equivalent. Or put another way as a group if everyone were to collect at NRA or at 70 should yield the same benerfits. I realize that for any given person it depends if they die before or after a breakeven date but as a group the decision is suppose to be net no effect. Now if some of you acturaries that hang out around here want to tell me you have run the numbers and what is suppose to happen and what does happen I will listen to that claim.

I have noticed the odd date issue before on IRS letters. My guess (and it is a guess) is they are making sure you really have the 30 or 60 days to reply from the date of the letter by adding days for the mail. The Post Office is just being quicker then the IRS guess.

Before you start a formal appeals process you might simply want to ask the questions you asked here to someone in HR. In particular if you work for a larger employer they might have someone in HR whose job it is to help run the 401(k) plan. And just see what the answer is. It sounds like they gave you some kind of earnings. So maybe they can explain how they computed the earnings they gave you and their justification for those earnings. If you don't get a good answer or you think the answer is wrong then you might want to start with a formal appeal process. An appeal process requires the employer to make very specific replies by specific deadlines and so forth. It has a confrontational feel to it. As such any answer you get is more likely to be vetted to be very proper and correct. It might even be written by a lawyer which means it might not be very clear while very accurate. However, in most cases an informal conversation can get you the answers you need. In the very end if you have tried all of that and you can't get an answer you can go to the Department of Labor of help. Once again doing that will tend to bring out the lawyers and so forth. So I tend to recommend going there last.

You have to do an RMD based on the 12/31/2012 balance which may mean there is money in the IRA that shouldn't be in there. The regulations are very clear the March payment should not have happened without the 2013 RMD being done. The IRA will tell you there is no RMD due from it as there was no balance in it at 12/31/2012. (I am assuming the IRA has not assets except the new rollover).

Here are some other discussion that might help: http://benefitslink.com/boards/index.php?/topic/53352-convicted-felon-wants-to-take-a-distribution/?hl=prison http://benefitslink.com/boards/index.php?/topic/30012-life-in-prison/?hl=prison http://benefitslink.com/boards/index.php?/topic/25797-participant-entitled-to-distribution-is-incarcerated-do-we-send-a-notice-regarding-his-eligibility-for-a-distribution-to-the-prison/?hl=prison http://benefitslink.com/boards/index.php?/topic/2887-incarcerated-beneficiary-help/?hl=prison

So you only obey the law if you think you are going to be caught not obeying it? I mean there are these great late filing programs that limit the fine. No one likes paying fines but that seems like a better route then just ignoring it. I had a boss that was famous for saying, "problems never get better by just waiting for them to go away."

Beside what is above most find it easier to have two seperate becasue very few 401(k) providers run ESOPs well. There are some ESOP providers that will do the 401(k) and do it well. But if it is one plan you either need to find a firm that can do it all or you have two firms helping you run one plan. I would add now with all the fee disclosure rules if they are seperate there is a good chance you don't have to figure our how to disclose the ESOP part. It seems like the few KSOPs we have we put a fair amount of work in getting the ESOP portion properly disclosed. I think there are good reasons most are two plans.

Can you have a valid QDRO if the husband doesn't agree with it? I mean at least to the point where he acknowldges the idea the court ordered it. I haven't thought that deeply about it because I am not sure I have ever seen a QDRO where both parties didnt' agree with it. But in my mind "yes" they can agree to anything. In the end that is all a QDRO is -- an agreement to divide property in a qualifed plan. So if the husband and wife agree to it I would not have a problem with it. I have clearly seen QDROs that give an alt payee a portion of the benefits earned before they are married. It happens because of things like your example. One person wants the house for example and the other person wants the funds for a secure retirement. So one agrees to take 100% of the house and the other agrees to take 100% of the retirement funds. It is all part of the deal making process.

To me it isn't clear why the 5558 aren't just being set up to file electronically like the 5500s and 8955-SSA can be. It would seem like so many of these problems would be solved if that happened.

I am with the others. The regulation say you have to test the union group seperately and in fact in many cases simply don't test that group. But that isn't the same as saying the union document doesn't have to define who an eligible employee.

Not that I know of. We have added a line for requesting extra Federal and a line for extra state taxes to our standard distribution form. For one thing I just can't ever imagine the government ever getting bent out of shape becasue someone wants to gvie them more money. As an aside I have seen 100% withholding request once also.

We left IL in our early 30s and I beleive she can collect full benefits around 65. I would have to look and see there might be an earlier age for full benefits. She is vested. As far as I can tell becoming vested in the IL TRS is rather easy. It might be from day one in fact. She was given an option to take a "refund" of her contributions and that money has been creditied with interest every year since she left. The refund amount goes up every year by an interest rate factor. But my understanding is if she did that she would be forgoing the DB annuity option. To me the question would be if you thought about taking such a refund is the refund more or less then the PV of the annuity. The refund is not the PV of the future annuity. The pension reserve established at age 65 is the PV of future annuity income payments. The refund left on deposit with the TRS simply helps the TRS fund the PV of the prospective annuity payments----that PV is the Pension Reserve. What are you blathering about? I never said the refund is the Present Value of the annuity. In fact I clearly said it wasn't the PV of the annuity. What I said was the only way to determine if you should take the refund or not is if the refund exceeded the PV of the annuity. Or put another way could I invest any refund in such a way that when my wife turned 65 I could buy a better annuity with a 3% COLA. That is what a PV calculation of an annuity to today would measure. Are you trying to sell me something? Because honestly I am not a DB expert but the more you talk the more I am convinced you know less then me. Otherwise I am at a lost as to why you keep trying to convince me to think taking a refund is the better idea when you are making no argument for it that makes any sense to me.

We do it all the time. If the person puts on their form they want extra we do it.

Your question is a little unclear. But see page 8 of the Form 5330 instructions. From your numbers I can't tell what they are but the 15% excise tax in on just the interest not the full amount of the late def. It has been a little while but I am pretty sure you have to file a Form 5330 for every year until it is fully corrected. By fully corected that mean all the interest is paid also. So if they just found out about it now and are paying the interest in 2013 you need to file through 2013. I know that one isn't due for a while but you might as well get it out of the way in my mind.

I know FT Williams and the program put out by Datair both allow that. I think but it has been years that the Relius program also allows one to do what you are asking. In fact I would be shocked if any of the big name 5500 software packages which all have the 8955-SSA software didn't allow one to electronically upload data.

We left IL in our early 30s and I beleive she can collect full benefits around 65. I would have to look and see there might be an earlier age for full benefits. She is vested. As far as I can tell becoming vested in the IL TRS is rather easy. It might be from day one in fact. She was given an option to take a "refund" of her contributions and that money has been creditied with interest every year since she left. The refund amount goes up every year by an interest rate factor. But my understanding is if she did that she would be forgoing the DB annuity option. To me the question would be if you thought about taking such a refund is the refund more or less then the PV of the annuity.

You don't say which state's system you are dealing with but the name you are using Teacher's Retirement System happens to be the name of the IL teachers retirement plan. I know it also offers refunds on contributions. IF YOU ARE DEALING WITH THE IL SYSTEM keep reading (if not just ignore me) Full disclosure I am NOT an expert on the IL system. I am some guy who works in the retirement field whose wife was an IL teacher for 11 years before she went into working for private schools in MO. You might want to get some advice from an expert before taking that refund. In my mind the refund is a bad deal in IL. It is just the employee's contributions with a very small interest rate credit. If you take it you are giving up a pension payment with a cost of living adjustment every year. There maybe cases where the lump sum works. But in the case of my wife they were offering here a lump sum to give up a stream of payments starting when she hit retirement age for as long as she lives with annual cost of living payments. I had a acturary friend of mine help me work out the present value of that stream and the refund just didn't make sense. I WANT TO BE VERY CLEAR HERE: Don't just take some guys advise from a discussion board other then maybe to realize it might be worth asking more questions before you decide what you want to do.

If the ROBS is set up correctly the cash was exchanged for shares in a corporation which then used the funds to invest in the franchise. So you would put the FMV of the stock of the corporation that own the franchise on the Sch I. I am not trying to be mean here but based on your question it would appear you are in over your head. I would strongly suggest you seek out competent advice on this topic before you go farther. ROBS are a tricky subject if for no other reason the IRS has basically gone on record as saying they don't like them. Money spent up front will look like cheap insurance if an IRS agent comes walking through the door.

My guess you are not getting any replies because the answer is unclear. I am unaware of any guidence on this topic. You have asked the perfect grey area question. My guess is the plan adminstrator and their attorney is going to have to decide how comfortable they are defending this kind of change or not.

I am not sure I understand the questions.

I have never heard or seen someone take out the otherwise excludeables in a partial termination calc. It is my understanding that the IRS seems to be saying you have to include all terms and not just involuntary terms. An idea I would add that makes no sense in retail firms and staffing firms. They can have over 100% turn over in a year that is just normal. I guess you just make the facts and circumstances case that it is the industry for those clients.