Appleby

Before that vendor may accept an exchange after 9/24/2007 or new contributions after 12/31/2008 From what I understand, 1.403(b)-3 does not address exchanges that occur 09/25/07 to 12/31/08. These are addressed under Treas. Reg. 1.403(b)-10. For transfers that occur 09/25/07 to 12/31/08, the Information sharing agreement (ISA) must be in place by 01/01/09. This does not have to be a 'formal' ISA. However, if the ISA is not in place by 01/01/09, then the account must be re-exchanged to an approved vendor by 01/01/09. The 'old' 09/24 exchanges will no longer be permitted as of 01/01/09. Instead, there is a new type of exchange. Exchanges between approved vendors is considred an exchange of investment, and an ISA is not required. As of 01/01/09, if an exchange occurs to a non-approved vendor, a formal ISA must be in place. The ISA brings this account under the plan. This would be in place at the time (of before) the exchange occurs. The point of this agreement is to deem these new accounts to be brought under the plan. As to 1.403(b)-3… (3) says in part “A contract does not satisfy paragraph (a) of this section unless it is maintained pursuant to a plan.” ...(ii) of that section discusses the assignment of responsibilities. I think this is the other agreement to exchange information to which Architect refers ( agreement on who is responsible for what administrative functions, and to provide certain informtion to stakeholders). It says in part …” A plan is permitted to assign such responsibilities to parties other than the eligible employer...and may incorporate by reference other documents, including the insurance policy or custodial account, which thereupon become part of the plan.” So it seems the account becomes part of the plan, when this agreement ‘entered upon’, which can mean the employer attaching a copy of the annuity/custodial agreement to its ‘plan agreement ’. Recall that the 403(b) document need not be a formal document, but can be a bunch of papers, annuity and custodial agreements, forms and such paper-clipped together. But, if the Vendor is not part of the plan, and a contract exchange occurs to that Vendor, then an ISA is required in order to bring that acocunt under the plan. Since this exchange will be ocurring 01/01/09, then the agreement cannot be in place by 01/01/09, but should be in place in order to permit the exchange...and unlike the exchanges that occur 09/25/07 to 12/31/08 which does not require a formal agreement, this exchange does require a formal agreement.

I found out what Mr. Architect ( Isn’t it uncanny that his name is Architect and he is the one of the drafters of the regulations? Something to be said for destiny)… Anyway…he explained in another presentation that there are two types of agreement. One, is the Information sharing agreement that must be in place for post 09/24/2007 90-24 exchanges to a non-approved vendor. This ISA governs that particular account/exchange. Treas. Reg. 1.403(b)-10. The other is an agreement to exchange information and to share responsibilities . This need not be in place by January 1, 2009. This is the agreement 1.403(b)-3. Apparently, there is confusion which leads some to believe that these are one and the same, and the confusion has lead to a misunderstanding that the 01/01/09 deadline applies to both agreements.

Thanks Janet.

Wouldn’t it be safer to take the RMD, and if no RMD is required then rollover the amount within 60-days? The amount should be rollover if it is not an RMD, unless the relief comes with a clause that says”…but if you already withdrew your RMD amount, you are SOL”.

Don't you hate those people who kill a joke with questions? Well, me too, but I gotta ask. Is this as in Robert Burns and these men were seriously taken to mimicking his style?

To add to John's response...one supposed advantage of converting to separate Roth IRAs, is that it makes it easier to recharacterize a portion of the conversion. This is because you may not need to run a calculation for the NIA. Example: If you convert 50% to Roth IRA # 1 and 50% to Roth IRA #2, and you decide that you want to recharacterize only 50% of your conversion, then you would recharacterize the entire balance of one of the Roth IRAs and that would be that. But if you converted 100% to Roth IRA #1 and decided you want to recharacterize 50% of the conversion, you would need to compute the NIA, and increase/decrease the 50% by the NIA in order to determine the actual dollar value of the recharacterization. It is for this reason that some thinks it’s a good idea to keep the conversion amounts separate until the deadline for recharacterization has passed, at which point they can be combined. But the calculation is not complicated- even easier if your financial institution will perform the calculation. Therefore, if keeping the accounts separate means two maintenance fees, and two ticket charges if you want to buy 100-shares of a stock and need to place trades in both accounts in order to do so, it may not be worth it to maintain two Roth IRAs. Bottom-line is that it’s a personal choice.

LOL . I forgot about that one.

It depends on where the 'h' appears in the word. If it appears at the beginning of the word, it is ignored. Otherwise, it is recognized. Hello is 'ello She is she Here is 'ear and here is 'ere Brush is brush Happy is 'appy. But! if I am talking to someone other than a fellow Jamaican, the H at the beginning of the word is heavily enunciated- maybe as a way to make sure there is no misunderstanding

Quadro...But I’m Jamaican and we often drop the 'w' sound (like bellow, we say bello), so that could explain it...

The IRS has issued guidance on ERSOPs - The IRS calls these transactions ROBS. Guidance available here http://www.irs.gov/pub/irs-tege/rollover_guidelines.pdf.

You may also want to try a brokerage firm. They usually offer self-directed IRAs, wherein you can invest stocks, bonds , mutual funds and the whole bit. Some even allow non-traditional investments such as private placements, limited partnerships and real estate.

I agree with masteff on the IRA-to-IRA. This would not be a sale between the IRAs. Instead, it would be a trustee-to-trustee transfer. Just like if you had mutual funds, stocks or cash in one IRA and wanted to move it to another IRA. If the IRA is a traditional IRA, the property could be moved between two traditional IRAs, or between a traditional IRA and a SEP IRA as a trustee-to-trustee transfer The property could also be moved from a traditional IRA to a Roth IRA as a conversion. As long as the movement is between IRAs- no prohibited transaction issue there. The prohibited transaction issue would come into play if the property is being sold to by the IRA to a regular – say a regular checking / savings/brokerage account that is owned by the IRA owner or other interested party.

Actually, instead of giving the siblings money and hoping they give part of it back... have a CPA figure out the tax burden on the distribution and then split the net. (Basically, figure the daughter's taxes w/ and w/out the distribution, subtract the difference from the distribution and then divy it up.) Agreed....much better option

I don’t think you can disclaim benefits, and have the benefits go to you. I think Sieve was right the first time. She would disclaim 6/7, and then ‘step aside’ so the remaining 6 children would share the disclaimed amount. If the agreement does not have a beneficiary provision that defaults to the children, the other option would be to work out some arrangement where she takes a distribution, gives them their share and they reimburse her for any taxes incurred as a result of the amount she gives to them.

Since you mentioned being born before 1936, you are probably referring to the income averaging ( or forward averaging) treatment. That treatment does not apply to IRA assets.

How about Treasury Regulation § 1.401(a)(9)-3 ?

From : http://www.plansponsor.com/pi_type11/?RECORD_ID=43488 So why does almost everyone else and their mothers think that the ISA must be in place by 01/01/2009? From what I gather from reading the regs and the Rev proc, an ISA must be in place by 01/01/2009- at least for runaway accounts. The rest I am still trying to figure out.

It is best to check with the plan to determine whether the assets can be move into inherited 401(k) accounts for your wife and her sister. The IRS has issued private letter rulings (PLR) allowing such transactions, but a PLR cannot be relied on by anyone except the party to whom it was issued. The most your wife and her sister can do is ask the plan administrator. If the plan administrator, they have the option of getting their own PLRs. One thing to bear in mind is that the plan administrator is not concerned ( or even be familiar with) estate issues. Their focus is on ensuring that the plan operates in compliance with the provisions of the plan document and the tax code. Sometimes, the two can seem to require different things. By the way, it is not five years (for the distribution period). That applies only if he had died before his RBD and the estate was his beneficiary. The actual distribution period depends on his age at death, and possibly her age at death.

Interesting and good to know. I was not aware of that, as I have never seen those documents. I have seen custodial 403(b)(7) accounts. In all the cases I have seen , the participant establishes the agreement with the custodian- and usually funds it with a 90-24 transfer. Often, the employer is not even aware that the account is held with the custodian...unless they remit salary deferral or other 403(b) contributions to the account.

Goog to know...

Maybe they are thinking about another agreement. A custodial account must be opened under the custodian’s custodial agreement. But that agreement is between the participant and the custodian. They may be thinking of the Information Sharing Agreement, which is between the custodian and the employer. The Information Sharing agreement is not required in all cases.

Do a search of 'worthless' for all forums, and you will find a few threads with possible solutions. Good luck!

Nassau, Who is VG? If DEF tracks the amounts, the account keeps the grandfathered status

It worked for me earlier this week too. Maybe as late as Wednesday or yesterday. It is working now. Mysterious

Wondering if it is happening to just me. When I search, the search field pops up behind the Benefits Logo in the upper left hand corner...and it does not permit input.