JanetM

Accounting standards require that if a liability is quantified and certain you must show as payable at year end.

These also have Retirement articles - plan design, investments, performance - you have to be more specific Employee Benefit News Investment Advisor Employee Benefit Advisor Workforce Management workforce.com Human Resource Executive Online hreonline.com Pensions & Investments

Mercenary, not quite. Only qualifed as expert marksman on M16 and .22 pistol. John, I like your avatar.

Let me restate this. The $ rolled to the Roth are not subject to 72t. Since the withholding isn't rolled to the Roth I am being told it does not fall under the exemption from 72t. To escape the penalty, 100% must roll to Roth and the tax must be paid out of pocket. We can withhold on Roth rollover, but the tax & penalty part is what is confusing. I want to be able to explain this to people who want to roll to Roth.

Yep, but the unspoken lines were that the guys 401k plan was at fidelity. He signed one set of forms and it served both to send and receive. LOL the beauty of advertising is most often omitted.

I understand that the 10% penalty does not apply to direct rollover to Roth and that the statutory 20% withholding does not allply. The participant rolls 100% of balance to Roth and then pays the tax due out of pocket the following year. I have terminated participant who wants to roll 80% of balance to Roth and wants us to withhold the 20%. Told her we could not do that. She could roll the 80% to Roth and take lump sum of the 20% - with 20% of that withheld and then she could send the amount received as estimated tax payment. Anyone have better way to do this? Participant can't afford to pay tax on rollover if 100% goes into the Roth. She understands if she rolls 100% to Roth and takes $ from Roth to pay taxes next year the amount withdrawn will be subject to 72t penalty.

I am plan sponsor of 4 401k plans and 13 pension plans. The trustee to trustee part can cause problems. Some trustees (fund companies) require a plan number and SSN on face of check or that forms be mailed with the check. If this is the case we can't process a trustee to trustee transfer. We do not allow the printing of the SSN on the check. Nor can our trustee who issues the checks include any forms. The check is issued payable to trustee fbo participant and mailed to the participant to forward on to the trustee with additional information. We have had ERISA attorney opine that since the participant can't cash the check and it is made payable to new trustee it is still within the trustee to trustee guideline.

Why not give them the first number as an estimate along with the wording that if the payment is not made by specific date the amount will be recalculated? That is what we do. I won't send out any lump sum paper work unless the payable date is at least 45 days in the future. That way we don't have to redo quite as many.

John, Focused is good analogy - fixated is a bit better. Target lock is military term - when an ordiance guidance system is locked on target and responds to nothing else in the universe.

The franchisee is a separate business entity from the franchisor. Example - Joe runs 5 franchises that sell "ACME" cartoon props. Joe's employees are NOT considered employees of ACME.

Well I suppose if the resolution will result in the 204h notice and SMM given out in timely fashion. But I get the impression from OP that they want to change the plan with out giving notice to participants. We are now more cautious on paper trail. All resolutions end up as amendments. Goes back to IRS determination letter package we filed to merge three DB plans in 2000. We had resolutions for two plans but not actual plan amendments. IRS agent reviewing the determination letter package for the consolidated plan said it wasn't good enough. They only look at plan docs and amendments. Not resolutions.

Yes you have to amend the MP plan to 0% and freeze the plan. The Plan is subject to required minimum contributions (it is pension plan) based on the % contribution stated in document. Unless you change the % to 0 & freeze you have to continue to make contributions and you can't merge with 401k plan. The 204h notice is mandatory when you reduce or eliminate benefit accruals.

John, I was target locked on the divorce angle. glossed over the OE issue.

cite from coverage / non discrimination answer book There are two general methods for measuring a year of service for purposes of plan eligibility: the hours-counting method and the elapsed time method. Under the hours-counting method, a year of service is a 12-month period during which the employee completes a requisite number of hours of service for an employer. (The number of hours may not exceed 1,000.) The measurement period is referred to as an eligibility computation period. The first eligibility computation period begins on the employee's date of hire and ends on the first anniversary of that date. Subsequent eligibility computation periods may either be measured on anniversaries of the date of hire or shift to the plan year. If the computation period shifts to the plan year, however, an employee must receive credit for overlapping periods in each of the computation periods, an especially relevant rule if a plan requires more than one year of service for purposes of eligibility. [i.R.C. §410(a)(3)(A); DOL Reg. §2530.202-2(a)] Under the elapsed time method of defining a year of service, an employee will be credited with a year of service if the employee is still employed on the first anniversary of his or her initial employment date. [Treas. Reg. §1.410(a)-7©(2)(i); DOL Reg. §.2530.202-2]

This can be done easiest by adding new plan and merging the MP plan into new plan. First amend MP plan to 0% contribution and freeze/close plan. Give out 204h notice noting date the accrals cease. Adopt 401k plan effective day after MP accruals cease. Give out lots of info so everyone can sign up for deferrals on effective date. Transfer MP funds - yes they continue to rectain the J&S provisions in the new plan - and any other protected benefit.

The first inquiry should be to the husbands employer. Why didn't the kids get COBRA notice? Did husband not tell the truth as to where the kids lived? Depending on language in divorce there should have been language regarding child support, medical, and all that stuff. If husband was required to carry the coverage, employee would have recourse in court since he didn't follow the order. Since the situation doesn't fit the caf plan change rules the employee would not be able to add kids since too much time has passed. As tot the QMCSO - in my experience the order has always applied to non custodial parent. That isn't the case here. Full disclosure - I have only handled about a dozen QMCSOs so my experience is limited.

Now the plan has qualification problems if they don't undo the withdrawal. They have made distribution that is not allowed.

It could happen. Try this example. Man works in accounting department. Man's hobby is wood working and remodeling. Man does work on companys breakroom, paneling, building cabinets and such on the weekend and at night. Day job in accounting he is employee, remodeling the break room in the evenings and weekends he is contractor. Depends on facts and circumstances.

I don't have grey book but I do have CCH online.......... Per Pension distribution answer book Q14-7 Who is a restricted employee? The term restricted employee refers to any HCE or HCFE if the employee is one of the 25 (or a larger number chosen by the employer) nonexcludable employees and former employees of the employer with the largest amount of compensation in the current or any prior year. Plan provisions defining or altering this group can be amended at any time without violating the anti-cutback provision of Code Section 411(d)(6). [Treas. Reg. §1.401(a)(4)-5(b)(3)(ii)] In a private letter ruling, the Treasury has opined that the "high 25" limit is determined on an employer-by-employer basis in a multiple employer plan, where none of the members are in a controlled or affiliated service group (under Section 414(b), ©, (m), or (o)) with another employer in the plan. [Ltr. Rul. 200449043] In another private letter ruling, the Treasury has opined that the "high 25" limit is determined on an employer-wide basis, regardless of the fact that a QSLOB election has been made by the plan sponsor. [Ltr. Rul. 200248029] Example 14-2 Art is an HCE for the plan year ending December 31, 2007, because he earned more than $100,000 working for Wagner Plumbing Supplies, Inc. in 2006. Art terminates employment in 2008. Wagner Plumbing Supply wants to determine if Art is a restricted employee. Toby, the benefits manager, makes a list of all highly compensated employees for the years 1995 (the year the business started) through 2008. This list is arranged in order of compensation, using the highest compensation earned for each HCE. Art is number 30 on the list and is, therefore, not a restricted employee. So based on example 14-2 I would leave them in even if they have been paid out.

So based on the union workers logic, if he goes to an away plan whose DB formula is $3 per hour is he going to come up with the $1 to make his benefit whole? If he doesn't have to make up the shortfall he doesn't profit by the overage.

If the plan has been operated proberly and you don't have any goofy provisions that may not qualify you can distribute the assets before you get the letter. You mention estate, to whom did the owner give the business to or who is named as administrator of the estate? That person, I think, would become the new sponsor and it would be their job to terminate the plan.

Good catch Bill - I should have been reading closer. And if TPA really holds the stop loss that would not be reported either.

Q1 I would put it on C since you don't have a specific contract to refer to. I use 19 on line 2g on the C. Q2 How can the TPA take out stop loss on behalf of the self insured plan? But assuming they can, I again would put the TPAs cut on the C and use code 19. The stop loss would go on an A and show the actual premium for the policy.

I looking up the condition since I had never heard of it. Strength training won't improve it. http://www.spineuniverse.com/displayarticl.../article96.html

I have seen the same rule of thumb - number has varied from 100 to 140. I am 45 and 100% equity.