Everett Moreland

See Revenue Ruling 69-607, which can be obtained at the following cite: http://www.taxlinks.com/rulings/findinglis...evrulmaster.htm

I agree that local government plans must comply with the ADEA. State plans might be excepted from complying by Kimel v. Florida Board of Regents. It is not clear to me how Kimel affects a local government participating in a state plan. I have read articles stating that the local government probably would be protected by Kimel, but the reasoning is not compelling.

IRS Notice 2000-38: "A trust described in section 457(g) is not required to file Form 990, Return of Organization Exempt From Income Tax, Form 1041, U.S. Income Tax Return for Estates and trusts, Form 1120, U.S. Corporation Income Tax Return, or Form 5500, Annual Return/Report of Employee Benefits Plans. See, for example, Rev. Proc. 95-48, 1995-2 C.B. 418, which provides that governmental units and affiliates of governmental units that are exempt from federal income tax under section 501(a) are not required to file annual information returns on Form 990, Return of Organization Exempt From Income Tax. A trust described in section 457(g) may be required to file Form 990-T, Exempt Organization Business Income Tax Return. See sections 1.6012-2(e) and 1.6012-3(a)(5) for the requirements for filing Form 990-T."

You may find the answer to your questions about age and sex discrimination at these cites: http://www.eeoc.gov/docs/benefits.html http://www.eeoc.gov/docs/qanda-benefits.html

Yes

http://www.unclefed.com/Tax-Bulls/1997/97n...oticeslist.html

Thank you for your reply. The only helpful materials I have found are RR 59-129, dealing with the Salvation Army, and GCM 37116 (5/9/77), which discusses RR 59-129. From the GCM it appears that the mission would not qualify as a church.

I would appreciate comments from anyone who has looked at whether an independent gospel mission, not associated or affiliated with or controlled by a church, is a church for church plan purposes under ERISA. This gospel mission serves transients, including providing room and board, and requires them to attend daily religious services provided by the mission, which are conducted by licenced minsters employed by the mission.

Ms. Calhoun: Thank you for your reply. The general counsel of the local government for whom I raised the question concluded that the issue is not whether a local government action requiring contributions is a "law" but whether "law" is limited to federal and state laws and, in case of local government laws, those of general applicability (i.e. those that apply to all similarily situated pension plan participants, not just to participants in the local government's pension plan). The general counsel advised that "law" probably does not include a local government law applying only to participants in the local government's pension plan. This conclusion concerns me, because many local government plans require mandatory contributions by nonunion employees. Any further thoughts you have would be appreciated.

Read Revenue Ruling 78-120. http://www.taxlinks.com/rulings/1978/revrul78-120.htm

A determination letter for a governmental plan is needed to self-correction "significant Operational Failures" under RP 2000-16: "n the case of a Qualified Plan that is the subject of a favorable determination letter from the Service or of a 403(B) Plan, the plan sponsor generally may correct even significant Operational Failures within a two-year period without payment of any fee or sanction."

An IRA nonspouse beneficiary can cause a trustee-to-trustee from one IRA to another. A nonspouse beneficiary of a qualified plan cannot rollover to an IRA.

The law was changed to allow PUDs to adopt 401(k) plans. See IRC § 401(k)(7)(B)(i)(II). This may be the reason you are getting conflicting information.

I believe what you propose will not work. The PLRs you cite appear to be inconsistent with the requirements in 1.401(k)-1(a)(3)(iv) and 1.402(a)-1(d)(2)(iii) for one-time irrevocable elections. There would be nothing left of 81-35 and 81-36 if what you propose were allowed. I think the best you can do is to structure contributions to fit within those allowed by the PLRs and then get your own PLR.

I read 4318 to apply to governmental plans. Following is 4318(a)(1)(A). § 4318. Employee pension benefit plans (a) (1) (A) Except as provided in subparagraph (B), in the case of a right provided pursuant to an employee pension benefit plan (including those described in sections 3(2) and 3(33) of the Employee Retirement Income Security Act of 1974) or a right provided under any Federal or State law governing pension benefits for governmental employees, the right to pension benefits of a person reemployed under this chapter shall be determined under this section.

Without any authority, my interpretation is that line 6 includes only the amount employees may receive in cash, whether that amount in funded by employee elective contributions or employer-funded contributions. For example, where 95% of the premium is employer funded and employees may not elect to receive any of that 95% in cash, I have advised clients to exclude that 95% from line 6.

The following may relate to your question: Proposed Treasury Regulation § 1.412(B)-4©(4); Revenue Ruling 79-237, 1979-2 C.B. 190; Private Letter Ruling 8652036.

Governmental plans are subject to the same direct rollover rules as apply to private plans

There is no automatic rule. The plan document must state how benefits are limited to avoid excess benefits under multiple plans.

No prohibition.

I think the following 1.410(B)-7(B) deals with the concern stated in the prior message: "Each single plan within the meaning of section 414(l) is a separate plan for purposes of section 410(B). See Section 1.414(l)-1(B). For example, if only a portion of the assets under a defined benefit plan is available, on an ongoing basis, to provide the benefits of certain employees, and the remaining assets are available only in certain limited cases to provide such benefits (but are available in all cases for the benefit of other employees), there are two separate plans. Similarly, the defined contribution portion of a plan described in section 414(k) is a separate plan from the defined benefit portion of that same plan. A single plan under section 414(l) is a single plan for purposes of section 410(B), even though the plan comprises separate written documents and separate trusts, each of which receives a separate determination letter from the Internal Revenue Service. A defined contribution plan does not comprise separate plans merely because it includes more than one trust, or merely because it provides for separate accounts and permits employees to direct the investment of the amounts allocated to their accounts. Further, a plan does not comprise separate plans merely because assets are separately invested in individual insurance or annuity contracts for employees."

A master trust must qualify as a group trust under Revenue Ruling 81-100. From your description it appears that the group annuity contract does not qualify as a group trust. Although I suppose you could have a group annuity contract that is comparable to a group trust, there appears to be no need to qualify the group annuity contract you describe as a group trust. Because all the participating employers are members of a controlled group, they are considered a single employer for purposes of the exclusive benefit requirement under IRC Section 401(a). See IRC Section 414(B).

The noncompliance could result in disqualifcation of the plan for failure to follow the written terms of the plan document. The noncompliance should be corrected as described in RP 98-22 and RP 99-31.

I would be interested in whether you think 401(a)(17) needs to be in an employer-adopted plan document, where employer-funded contributions are made, or whether you think that individual annuity contracts and custodial accounts can meet the 401(a)(17) requirement.

You get into difficult interpretation issues. For example, a local governmental plan with a prototype document was integrating into the state retirement system. The plan document raised the issue of whether spousal consent and QJSA notice were required under 1.411(d)-4 Q&A 3(B)(1)(i)©. Many local governments have adopted prototype plans, and seem to get along with them okay.