ETA Consulting LLC

There wouldn't be any software to illustrate 412(e) as the software would have to be built from scratch using the guarantees within the annuity and insurance contracts to create the values. So, if you have an insurance carrier with fixed annuity and insurance contracts (presumably of the same series), then you'd have a programmer build a system utilizing the actuarial assumptions (and rates) for those particular contracts. The administration, on the other hand is different; that can be done on any system once the plan is in place. Good Luck!

Typically not, as they were, presumably, distributed pursuant to the terms of your plan. You should, however, check with your human resources to determine what your options are with respect to those amounts. Good Luck!

That's the best explanation thus far. It only states "hardship". The one thing we know about hardship is that it is not available if any other distribution is available under the terms of the plan. So, the only way 59 1/2 would count is if it were actually available under the plan. Good Luck!

No. In order for the 402(g) limit to apply, the deferral "MUST" be 'elective'. If not, then it's non-'elective'. The document's language could've been written better, but nothing mandatory can be 'elective'. Good Luck!

I agree with you. The 'audit' or 'investigation' is simular to an inspection; which doesn't imply that anything is wrong. Good Luck!

You jumped in front of me. Do you have a cite that I could review; I would stand corrected if so. I've never heard this one. Section 401(a)(31) of the Code requires the plan to offer a direct rollover for amounts that are eligible to be rolled over. So, you're saying that, operationally, the plan must allow for these hardship amounts (after 59 1/2) to be rolled over? It is this, in conjuction with the fact that it wasn't rolled over that applied the 20% withholding. It would be interesting that the plan wouldn't allow these amounts to be rolled over, but would impose the 20% withholding. Again, I would stand corrected. It seems a bit inconsistent to discount the terms of the plan as the rule does relate to other section of the code. Good Luck!

No, the custodian is wrong as the 20% withholding applies to those distributions that are rollover eligible; per Section 3405 of the Code. Good Luck!

h e L L Okay, I get it

I wouldn't do it. It could be argued that this would create the effect of changing the contributions on amounts already earned up to the date of the amendment. Good Luck!

Not really, as this is a facts and circumstances issue. For instance, if I want to sell the land I own to my retirement plan, but am precluded in doing so because of the prohibited transaction rules, I may decide to sell my land to a friend with the understanding that my retirement plan will purchase the land from him. Under relevant facts and circumstances, the IRS could argue that the arrangment from the onset for my friend to sell the land to my retirement plan constitutes a transaction that is structured to circumvent the prohibited transaction rules. So, there's really no such time frame. Such time from would really imply a type of safe harbor when there is none. Good Luck!

All they would need to do is submit the FT William prototype and their Trust Agreement to the IRS for favorable opinion. It's really an easy process, but the two must be approved for use together. Good Luck!

These are actual Sections of ERISA; so they shouldn't apply to governments or churches (or non-ERISA 403(b)). Good Luck!

There are tax levies and QDROs. So, 'generally' would be appropriate. Good Luck!

We know the hardship rules are two fold: 1) Whether a hardship exists; and 2) Whether a distribution from the plan is necessary to satisfy the hardship. Each of these criteria have their own safe harbors. Obviously, a purchase of a principal residence is deemed a hardship. Under the 2nd category, whether a distribution from the plan is necessary, would require you to maximize available loans under the plan. Notice, this would tend to be double speak to say a loan would be available for hardships under category 2 above; because category 2 above already requires you to take an available loan from the plan. Given this, my interpretation for loan availability would be subject to category 1 (whether a hardship exists) and not consider whether it could be satisfied under any other means. With this understand, I would approve the loan. Of course, this is the best I could do without actually reading the plan. Good Luck!

In some odd event that everyone was entitled to an in-service distribution and actually took one; all assets would be distributed prior to the plan actually terminating. I think that is what the bold lettering implies; there actually being distributions prior to the amendment to terminate the plan. I do not believe that gives you extra time. Good Luck!

I would disagree with the Substantially Equal Periodic Payments being received during employment. Had it been an IRA, then there is no employment record associated with the account. Good Luck!

The only rule (barring something in the document that really isn't required) is that the plan must be tested with a non-discriminatory definition of Compensation. It does not have to be the definition actually used for the allocation. Not sure how that factors into what you are trying to do. Good Luck!

Just thinking, if these are not controlled groups and the plans are written to a prototype document, then you have a multiple employer plan with no reliance on the document's opinion letter for starters. Typically, the plan would be allowed to spin off into a separate plan (often done when a company is no longer a member of the controlled group; allowing the other related employers to remain on the prototype and have reliance on their opinion letter). If the document is set up as a multimple employer plan (e.g. volume submitter designated as such), then no further action would be necessary. If they are in fact a controlled group, then you are correct; sit tight until they are no longer a controlled group (and then spin off).It is this type of confusion in your fact pattern the prevents some of the 'heavy hitters' from responding. There "may" be potential issues here that need to be addressed prior to creating any detailed action plan. Good Luck!

I agree that the minor child issue doesn't exist as the husband did not 'legally adopt' the children. However, Section 1563 of the Code outlines other factors that should be considered for "spousal attribution". For instance, how much of his income is being taken as passive income? What I would do is print out Section 1653 of the Code and go down line by line and fill in the blanks. This, if nothing else, will give you an idea of all the missing facts that would be necessary to make the determination. Good Luck!

You're right, but don't need to list all reasons for them. I typically say "each source of funds carry its own regulatory requirements, so the sources should be recordkept separately". It's just a bad practice not to. Good Luck!

Sure, especially when you consider the stock attribution rules. You'd actually have to perform the analysis in order to make the determination. Good Luck!

Pushing the "Like" button. We are one of very few industries where recordkeepers who are this far off on simple issues are allowed to remain in the business. The client should be made to understand the level of incompetence in suggesting they have to amend their plan to correct something that is not broken. Just wanted to vent a little. Good Luck!

Yes, because his 2012 distribution is, technically, not "past" due. He has until December 31st to receive this, so his only delay was through 2011. Not sure exactly what you're asking, but I would certainly begin on this line. Good Luck!

This is more likely a recordkeeping issue since the participant does have money in the plan; so a source switch on the transactions may be in order. A 1099R form doesn't account for which bucket the money comes from within the plan. However, the terms of the plan should allow a distribution from that other source. Good Luck!

Sure, but tread lightly. Your argument is that employer is reimbursing the plan for an excessive expense paid from the plan. Like any argument, there is certainly an argument to the contrary, but that's why you retain detailed documentation on the transaction. No. It's not a contribution, but an expense. You have to remain as consistent as possible. This would appear consistent. I suppose this is not applicable since "3" is effectively "yes". Good Luck!