jpod

Luke Bailey: While the RMD wrinkles are noteworthy, I think the OP's immediate concern has nothing to do with RMD issues. It seems to me that the Plan has no choice but to recognize the trust as the beneficiary. (That there may be no "designated beneficiary" for RMD purposes is irrelevant to identifying the proper beneficiary.) Perhaps terrible tax/estate planning on the part of the decedent, but that's not a concern of the Plan.

Is it really insurance, or is some type of bridge loan arrangement?

I think old rulings and case law establish that there is no constructive receipt just because you could have been paid by quitting your job.

Go to the J&S rules in Title I of ERISA and look for the provision describing plans not subject to those rules. After that you'll be on the same page as the rest of us because neither the Government nor any court, to my knowledge, has every opined on how a 403(b) may fit within that provision.

I think whatever direction you are coming at this from, it would be treated as a new option grant, for a very short term, but with the same terms and conditions as the old grant. If the exercise price is now below the current FMV, we know that (a) it can't be an ISO and (b) the 409A ramifications are terrible. It may even be impermissible under the terms of the plan authorizing stock options, if the grant is pursuant to a plan. If I had the time I could go on.

Not sure what you are getting at when you say "if it can be done." If you don't care about the tax or legal ramifications, then sure, it can be done. That seems rather pointless to me, however.

Too much we don't know, but it's quite possible that even if a QDRO had been drafted the amount awarded to your Mother would have reverted back to your Father anyway given that she predeceased him and his retirement. This is very off the cuff and if you want certainty you need to hire a lawyer, preferably an employee benefits lawyer familiar with your Father's pension plan.

Party pooper! But I agree 100%.

A got stock? Or, A's shareholders got stock?

I interpreted the original post as describing, in a non-technical fashion, B issuing stock to the shareholders of A as the merger consideration. But, Mike Preston may be correct.

Meh. I suppose this language means the plan was terminated as of the closing date of the transaction, but for purposes of the 401k rule prohibiting successive 401k plans I am not sure that works. Beyond my energy level at the moment to think about this further.

if this was a merger A doesn't exist anymore. I would have to see the precise language you mentioned, in context, to evaluate it.

All of that stuff is in the Senate Fin. Comm. Chairman's Mark. Interesting.

Well, yes and no. The Chairman's summary of the amendment said 3801 would be eliminated, but the actual text of the amendment did NOT eliminate it. So, either the summary was wrong or there was an error in the drafting of the amendment. Hopefully this will be cleared up soon.

Carol, it would depend upon when/how vesting is triggered, wouldn't it? For example, if vesting is achieved by sticking around until an age close to a typical retirement age, then you probably do have a Title I pension plan and need to be concerned about the top hat issue. If, on the other hand, for example, you have a rolling 5-year plan (each year's allocation vests 5 years later), then I would say you do not have a Title I pension plan. Back to your original question, I have this vague recollection that there is an EBSA advisory opinion addressing 414 affiliation for purposes of the top hat group determination, but assuming I didn't dream it I can't remember the conclusion.

I have a feeling that is not the type of QQDCP Carol's client was contemplating, because if it is then chances are there would be no "top hat" concern.

Query whether the client should be spending any time, much less money, exploring NQDC at this moment given the House tax proposal.

Lapse of a substantial risk of forfeiture was never an income tax trigger for NQDC in the for profit sector. A "good" Rabbi Trust provides protection to the employee from "sticky fingers," but no protection in the event of bankruptcy or insolvency of the employer. There was never anything "magical" about Rabbi Trusts; their popularity is due solely to the fact that the IRS has blessed them as not triggering constructive receipt or an "economic benefit" under the economic benefit doctrine. With that said, this provision is a startling development. If this makes it into the law we have hundreds of clients who are going to go nuts.

Again, if the participant had the presence of mind to change her beneficiary designation before she died that provision in the regs may have enabled her to designate someone besides her spouse without the spouse's consent, but in the current scenario that provision is completely irrelevant.

Wrong. That reflects a rule in the regs that eliminates the spousal consent requirement if the spouse can't be located. It has nothing to do with a situation where a spouse beneficiary can't be located after the participant's death.

Please tell me how a qualified plan could possibly have a (valid) rule that allows payment to someone else if a surviving spouse beneficiary is missing.

Why the angst here? Ask the children to provide proof of either a divorce prior to the participant's death, or that spouse predeceased the participant. If they can't provide either, and you can't find the spouse, so what? What would be your basis for asking a court to entertain an interpleader action? And, what's the rush? Is the plan terminating? If RMDs are a concern the IRS released guidance a few days ago indicating that the plan is safe if the beneficiary can't be located.

Is the employer entity an S corp? If so, how much was the owner's salary, and how much was distributed to him as a dividend?

How old is the employee? I agree that it isn't a pension plan if after 5 years he's not likely at or close to a "retirement" age.

The facts aren't clear to me at all. Who is "maintaining" the plan? Who is providing the money to pay benefits due under the plan? What are the benefits to be provided under the plan, and under what conditions and when?