Harwood

Is this better wording?: If someone will be at least age 55 by December 31 in the year that they terminate employment, distributions from employers they worked for after age 54 are clear of the 10% additional tax. The original post says that the plan is terminating; it doesn't say if the company is shutting the doors or if the age 58 person will be leaving.

Are the employees continuing to be employed? If they are terminated, the age drops to 55 by December 31 to avoid the 10% additional tax.

IRC 72(p)(2)(B)(ii) has read since 1986: The maximum loan period of 5 years "shall not apply to any loan used to acquire any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the participant." Construction loans were specifically removed from this clause. Prior to 1986, IRC 72(p)(2)(B)(ii) allowed for a longer loan repayment period for: "any loan used to acquire, construct, reconstruct, or substantially rehabilitate any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as a principal residence of the participant or a member of the family (within the meaning of section 267©(4)) of the participant." A "conservative" Plan Administrator would not allow longer loans for construction purposes.

Four types of corrective distributions. Four sets of instructions with Form 1099-R: Corrective distributions of excess deferrals are not subject to Federal income tax withholding or social security and Medicare taxes. Excess contributions distributed within the 2 1/2 month period are not subject to Federal income tax withholding or social security and Medicare taxes. But amounts distributed from a 401(k) plan after the 2 1/2 month period are subject to Federal income tax withholding under section 3405. A [excess aggregate contribution] distribution made within 2 1/2 months after the close of the plan year is not subject to Federal income tax withholding or social security and Medicare taxes. But amounts distributed after 2 1/2 months are subject to Federal income tax withholding under section 3405. Such [Excess Annual Additions Under Section 415] distributions are not eligible rollover distributions although they are subject to Federal income tax withholding under section 3405. They are not subject to social security, Medicare, or Federal Unemployment Tax Act (FUTA) taxes. In addition, such distributions are not subject to the 10% early distribution tax under section 72(t).

Rev Proc 92-93 is dealing with deferrals and match being distributed due to 415 violations. The wording you quote is matched in the 1099-R instructions for "Excess Annual Additions Under Section 415": "Such distributions are not eligible rollover distributions although they are subject to Federal income tax withholding under section 3405." For ADP and ACP corrective distributions, the ERISA Outline Book states: "The allocable earnings distributed with the excess contributions under the ADP test or with the excess aggregate contributions under the ACP test are taxed in the same year as the excess amount is taxed . . ."

PATA: IRS Disclosure Offices: http://www.irs.gov/foia/article/0,,id=123736,00.html

Re: question two: I think that the IRA custodian must honor requests for additional withholding, if requested on Form W-4P

Belgarath: Form W-2P hasn't been around since about 1991, so proceed cautiously with using that 1987 Notice

Belgarath: I agree re: question one. Also, the employer should not allow optional withholding in 2004 that relates to taxable income from 2003. From Form 1099-R Instructions: "Excess contributions distributed within the 2 1/2-month period are not subject to Federal income tax withholding or social security and Medicare taxes. But amounts distributed from a 401(k) plan after the 21/2-month period are subject to Federal income tax withholding under section 3405." Appleby: I disagree on the earnings. If paid within 2 1/2 months, they are taxable in the prior year and not subject to any withholding. All: don't forget the under $100 exception - all taxable in current year.

I've always assumed you use the payroll rules for Supplemental Wages, as found in Publication 15 - Circular E, Employer’s Tax Guide: Supplemental wages combined with regular wages. If you pay supplemental wages with regular wages but do not specify the amount of each, withhold income tax as if the total were a single payment for a regular payroll period. Supplemental wages identified separately from regular wages. If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the income tax withholding method depends partly on whether you withhold income tax from your employee’s regular wages: 1) If you withheld income tax from an employee’s regular wages, you can use one of the following methods for the supplemental wages: a) Withhold a flat 25% (no other percentage allowed). b) Add the supplemental and regular wages for the most recent payroll period this year. Then figure the income tax withholding as if the total was a single payment. Subtract the tax already withheld from the regular wages. Withhold the remaining tax from the supplemental wages. 2) If you did not withhold income tax from the employee’s regular wages, use method 1-b above. (This would occur, for example, when the value of the employee’s withholding allowances claimed on Form W-4 is more than the wages.)

http://benefitslink.com/boards/index.php?s...t=0entry80551

We require it. I'm told there are notaries who service prisons.

Isn't the BNA material an election form and NOT language for an SPD? Has the original question been answered?

Most Corbel documents have this: "Notwithstanding any other provision contained in this Plan, the Trustee at the direction of the Administrator shall transfer the Vested interest, if any, of a Participant to another trust forming part of a pension, profit sharing, or stock bonus plan maintained by such Participant’s new employer and represented by said employer in writing as meeting the requirements of Code Section 401(a), provided that the trust to which such transfers are made permits the transfer to be made."

Sal Tripodi refers to this Q&A 30 four times in the 2004 ERISA Outline Book.

My browser freezes, too. I only found the files through using Google. I love this ASPA "no maintenance message:" "Please note: Due to the nature of these pages, links will be out of date as files are moved or deleted off of this or other servers. No maintenance is done to maintain these, as the pages are posted for archival purposes only."

The format of the web addresses changes from year-to-year. I was only able to find 99,00,01 http://www.aspa.org/archivepages/conferenc...nes/01irsqa.htm http://www.aspa.org/archivepages/gac/2000/irs_q&a.htm http://www.aspa.org/archivepages/gac/1999/99irsq&a.htm

The AICPA guide "Audits of Employee Benefit Plans" states: "E.02 Although generally accepted accounting principles do not require comparative financial statements, ERISA requires a comparative statement of net assets available for benefits."

American Bar Association Joint Committee on Employee Benefits Federal Agency Q&As web page: http://www.abanet.org/jceb/agency.html

"The 5500 Filing Guide" on the line for registered investment companies: "With the exception of money market mutual funds reported under line 1c(1), the preparer enters all amounts invested in mutual funds."

http://www.dol.gov/ebsa/faqs/faq_VFCP.html#section1 is a good place to start

I was asking a straight-forward question about counting hours, not last day of work. Perhaps I should've started a new topic.

mbozek: Do the hours paid for the accrued vacation count for counting hours during the plan year?

Form 5500 and virtually all Schedules have in the upper right: "This Form is Open to Public Inspection"

I assume this EGTRRA model amendment is using language provided by the IRS. The answer to the original question is in the last sentence: "For purposes of the Sections of the plan that provide for the involuntary distribution of vested accrued benefits of $5,000 or less, the value of a participant's nonforfeitable account balance shall be determined without regard to that portion of the account balance that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Sections 402©, 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of the participant's nonforfeitable account balance as so determined is $5,000 or less, then the plan shall immediately distribute the participant's entire nonforfeitable account balance."