Harwood

§ 1.401(a)(9)-8 Special rules. Q-1. What distribution rules apply if an employee is a participant in more than one plan? A-1. If an employee is a participant in more than one plan, the plans in which the employee participates are not permitted to be aggregated for purposes of testing whether the distribution requirements of section 401(a)(9) are met. The distribution of the benefit of the employee under each plan must separately meet the requirements of section 401(a)(9).

http://www.federalreserve.gov/releases/H15/

This discussion sheds more heat than light on the subject: http://www.benefitslink.com/boards/index.p...opic=20082&st=0

§ 415 Limitations on benefits and contributions under qualified plans. (h) 50 percent control. For purposes of applying subsections (b) and © of section 414 to this section, the phrase "more than 50 percent" shall be substituted for the phrase "at least 80 percent" each place it appears in section 1563(a)(1).

SB 168 does not stop you from gathering SSNs in California to do year-end testing for plans. There are many legitimate business reasons to continue to use SSNs, if proper safeguards are in place. Additionally, somewhere [but not in these Message Boards] Kirk Maldonado expressed the opinion that ERISA section 514 pre-empts state laws when it comes to gathering information for employee benefit plans.

Why the ADP refunds if the NHCE/HCE gap is less than 2%?

Social Security: http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cf...hZ2U9MQ**&p_li= IRS: http://www.irs.gov/retirement/article/0,,id=110106,00.html

Some of these sites refer to an "Interpetation Bulletin IT-325" http://www.ccra-adrc.gc.ca/formspubs/prior...31/atr31-e.html http://www.mathisen.ca/commentary/jan2003.htm#2 http://www.gvomoney.com/tax4ARTL.html http://www.paveylaw.com/practice/family_income_tax.html

Thanks QDROphile. My other favorite is a QDRO that assigns tax liability when IRS Notice 97-11 explicitly states that "a QDRO cannot designate who will be liable for the taxes owed when retirement benefits are paid."

One has to be an employee to make deferrals. Reiterated by IRS representatives many times. For example, try http://www.reish.com/practice_areas/Techni...ips/IRStip1.cfm

"Pre-tax contributions (salary reductions) made by an employee to a qualified cafeteria plan are excluded from the employee's income. They are not subject to federal income tax withholding or social security, Medicare, and FUTA taxes . . ." The Payroll Source [if 401(k) contributions are done through a cafeteria plan arrangement, they are subject to social security, Medicare, and FUTA.]

California: http://www.edd.ca.gov/taxrep/de231eb.pdf "Effective January 1, 2002, the Personal Income Tax law was amended to extend the tax benefits of employer-provided coverage under accident and health plans to domestic partners (as defined in Family Code Section 297). Such payments are excluded from PIT wages as well as PIT withholding."

Ashley - good catch!

I see many QDROs that have a flawed “savings” clause. "Nothing contained in this Order shall be construed to require the Plan or Plan Administrator: a. To provide to the Alternate Payee any type or form of benefit or any option not otherwise available to the Participant under the plan." The correct wording, per IRC §414(p)(3) would be: "a. To provide any type or form of benefit, or any option, not otherwise provided under the plan." Most plan documents I deal with allow immediate distributions to Alternate Payees, yet the flawed version of the savings clause seems to prevent that [since an active Participant under a certain age does not have the option of a distribution]. Should I send an Alternate Payee who wants money now back to court strictly because of this mis-wording?

"WITHHOLDING FROM PENSIONS, ANNUITIES, AND CERTAIN OTHER DEFERRED INCOME" http://wwwedd.cahwnet.gov/taxrep/de231p.pdf

"As of" reporting for the RMD balance permissibly can be ignored § 1.401(a)(9)–5 Required minimum distributions from defined contribution plans. Q–3. What is the amount of the account of an employee used for determining the employee’s required minimum distribution in the case of an individual account? A–3. (a) In the case of an individual account, the benefit used in determining the required minimum distribution for a distribution calendar year is the account balance as of the last valuation date in the calendar year immediately preceding that distribution calendar year (valuation calendar year) adjusted in accordance with paragraphs (b) and © of this A–3. (b) The account balance is increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date. For this purpose, contributions that are allocated to the account balance as of dates in the valuation calendar year after the valuation date, but that are not actually made during the valuation calendar year, are permitted to be excluded. © The account balance is decreased by distributions made in the valuation calendar year after the valuation date

Does the 18 month period start when the first payment could be made, which could be many years into the future when the Participant turns 50 or perhaps 65?

Schoonmaker case hinged on the fact that Plan violated its own QDRO Review Procedure. The Procedure said that a hold would be put on an account when there was written notification of a QDRO; Plan placed a hold after verbal notification of an upcoming QDRO.

"(if most affected employees are NHCEs)." "Also, if many affected participants are HCEs, what method is accepted?" I use the dictionary on this, since the IRS does not define these terms. If more than 50% of those affected are NHCEs, then using the highest rate if return in the Plan is acceptable. It does not matter if "many" of those affected are HCEs, as long as they are less than 50%.

http://www.reish.com/practice_areas/Techni...ps/DOLtip21.cfm

In the booklet "Divorce Orders & PBGC," it states "A QDRO also must identify the name of each plan to which the order applies -- if possible, this should be the plan's formal name." Whenever there is no other plan for the company with a similar name, I accept plan names in a DRO that are not exactly the formal plan name.

IRS website information on finding missing participants: http://www.irs.gov/retirement/article/0,,id=110106,00.html

I think you just file a Top Hat Exemption with the DOL. No fees. Details in DOL Reg 2520.104-23

"Schedule P (Form 5500) may be completed by every trustee of a trust created as part of an employee benefit plan as described in Code section 401(a), and by every custodian of a custodial account described in Code section 401(f)." So if two places house assets, both could/should file a Schedule P. It does make sense to use Manulife's EIN doesn't it ? [assuming Manulife's EIN is on the 1099-Rs]

Deferrals have to come out of paychecks [except for the self-employed]. It is absolutely impossible to make a deferral for 2002 in January 2003, much less November 2003.