k man

Absent supporting legal authority, I believe the 12 months is overly conservative but thanks for the opinion.

The code requires vesting for "affected employees" and the plan provides for vesting for "affected participants. Since a paid out terminee is neither a participant or an employee, I believe there should be no vesting.

I know that the code requires plans to provide for full vesting of "affected parties" upon plan termination. The plan provides for full vesting of participants upon plan termination. If a terminee is paid out prior to the the plan termination, does the terminee receive accelerated vesting also? I do not think so but would be interested in another opinion.

I just dealt with the exact same situation. I think you need to file a final 5500 but make sure you update plan for current law (GUST etc.) prior to paying out. I do not think you need to terminate the plan again.

The following is a summary of Rev. Rul. 2000-27, which essentially expands the same desk rule exception to the separation from service requirement Separation of service.--Distributions of elective deferrals from a 401(k) profit-sharing plan, which included elective deferrals, that were made to terminated employees after the sale of less than substantially all of a company's business assets, were considered lump-sum distributions made incident to a "separation from service" within the meaning of Code Sec. 401(k)(2)(B) . The IRS indicated that, for sales of less than substantially all of the assets of a trade or business that occur prior to September 1, 2000, the IRS will not treat a plan as failing to follow its provisions merely because the employer does not treat the termination of employment from the seller, and the hiring by the buyer, as a "separation from service" and does not permit distributions from the plan to the terminated employees hired by the buyer

do you know whether retained earnings have any effect on the carry forward?

can a corporation carry forward the deduction for profit sharing contributions made in a year it has no profits? do retained earnings have anything to do with this?

does the employee have to be paid in US source income in addition to the election? also, i cannot locate section 2121. is that a code cite?

Can a us citizen working for a foreign subsidiary owned by a us corp participate in the parent's 401(k)? what determines whether or not he can participate? is it whether or not he has US source income?

is it a cutback or reduction in benefits to amend a plan so that the break in service rule is applicable? how does this effect the 5 year break in service rule?

good question. they own a taxable entity and they want to combine the plans so possibly in the interest of consolidation. So can a plan termination be a distributable event?

Ok so back to the orginal question. If a hospital sponsors a 403(B) and 401(a) and decides to terminate the B plan in favor of a new 401(k), is it true that participants can only roll the 401(a) portion into a new 401(k) or can they roll both sources.

assuming your reasoning is correct (i am not disagreeing, just looking for a solution) then i read the law to say that a B participant can freely rollover employer money; the distribution restrictions (59 1/2, separation from service etc.) apply only to distributions made pursuant to a salary reduction agreement.

it would seem to me that since the IRS allows rollovers and transfers among different 403(B) plans, the new law will expand this provision to allow for rollovers from b plans to K plans of the same employer without a "triggering event." at a minimum a letter ruling could be obtained authorizing this. do you agree or disagree?

so can you think of a way to facilitate the rollover/combination of the plans? how can you get the money out of the plan other then when the participant terminates?

Are you all saying that a plan termination does not count as a distributable event when dealing with 403(B) plans?

by way of background this organization is a for profit that controls a not for profit. in light of your answers, can you adopt a new plan which is a 401(a)/403(B) where employees of both for profit and not for profit entities defer and receive matching contributions all under one plan, and also permitting those who wish to roll over their 403(B) balances into the plan. ie. is their a need for a distributable event? what are large organizations in cases like this doing in order to simplify their plan design?

Can a Plan Sponsor that sponsors a 403(B) plan and a 401(k) plan, merge the 403(B) plan with the 401(k) plan in light of EGGTRA? Assuming they want to terminate the 403(B) plan, what are the main issues to consider? Can the participants be directed to roll their 403(B) money into the 401(K) plan in light of EGGTRA? Will the termination constitute a distributable event?

Can a Plan Sponsor that sponsors a 403(B) plan and a 401(k) plan, merge the 403(B) plan with the 401(k) plan in light of EGGTRA? Assuming they want to terminate the 403(B) plan, what are the main issues to consider? Can the participants be directed to roll their 403(B) money into the 401(K) plan in light of EGGTRA? Will the termination constitute a distributable event?

it helps

The final regulations on loans (1.72(p)) discuss the concept of paperless loans and the conditions in which they will be pemissable. However, the Regulations say nothing about spousal consents in the case of J and S plans. Wouldn't this be an issue precluding a paperless loan in the case of these J&S plans? Any comments would be appreciated.

Does 2001-17 require that the sponsor submit an application for a determination letter to the same location with its Request for correction of the failure?

where can i find the procedure for using the VCP self correction program in order to correct the failure to amend for TRA 86?

Our plan provides that the spousal consent is irrovacable so it seems as if they ought to make the distribtion.

Yes, there has been a separation from service.