jpod

Does the Judge's Order explain why it is drafted to allow for participant and AP signatures? Does the Order say it is contingent upon their acceptance/signatures?

The theory underlying this is that as of 12/31/14 the Trust for Plan B has become a Trust for Plan A (along with the original Trust for Plan A), and consequently all the assets have been moved from Plan B to Plan A by 12/31/14. Whether the DOL, IRS or your auditor will buy that theory is another matter, but if the merger resolutions and amendments were drafted appropriately I believe it is very defensible.

Perhaps, however, I am wrong and trust earnings and deductions for the ENTIRE PLAN are still at risk (i.e., only the HCEs suffer income-inclusion but the other adverse tax consequences apply to the entire plan). As I said I never really explored this. It does seem odd, however, that if you set up a separate plan just for the 10 HCEs, and another plan for 50 NHCEs, the NHCE plan skates home free.

I've never really studied this in depth but I believe there is a rule in the Code that says if the only reason for disqualification is the failure to satisfy 410(b) then the impact of disqualification falls solely on the HCEs. This rule - and how to implement it - may be something to explore further.

Assuming the alimony is alimony that is deductible on his 1040, it seems like he is way better off borrowing the money to pay his alimony than taking a hardship distribution or doing a QDRO. If that's not possible, and if he is younger than 59-1/2, how much would the 10% additional tax on the hardship distribution be? It may be more than what it would cost him to go to the trouble of getting a QDRO.

Whether you are in an estate tax posture or not, if you are charitably inclined anyway you get more bang for the buck leaving pre-tax money to charity and more after-tax money to your heirs. Naturally naming a charity as beneficiary impacts MRD calculations, but if you are not so wealthy as to be in an estate tax posture maybe this wouldn't make much of a difference to you.

Well, it's a conundrum. Assuming good faith efforts have been made to find the beneficiary I would say that 409A ramifications and tax issues generally are the least of the employer's worries here (in fact no worries at all as a practical matter). I would have legal counsel consider (a) whether this is an ERISA top hat plan, an ERISA non-top hat plan, or a non-ERISA plan, (b) based on the answer to (a) the obligations of the employer-plan sponsor in searching for the beneficiary, © based on the answers to (a) and (b) the limitations period during which a beneficiary or an heir to the beneficiary can crawl out of the woodwork and sue for the money, and (d) based on the answers to all whether escheat may be the required remedy.

The money belongs to the beneficiary, or if the beneficiary is deceased his or her estate. What have you done to try to locate this beneficiary? Have you retained a search firm? Have you advertised in legal publications in the locale of the last known address?

dv13: Is this a NQDC Plan and are you concerned with the 409A ramifications of a delay in payout to a death beneficiary?

I believe the Windsor decision, coupled with the IRS' guidance thereafter, does apply for all tax purposes.

Assuming that the DP is not the employee's tax dependent, I believe the IRS has spoken on this and measures the imputed income on the basis of the value of the coverage for the DP, not the cost of the coverage. Whether that is right or wrong is kind of beside the point, as the employee's employer is either going to report some amount as taxable on the W-2 or not.

I agree with your analysis about the risk. Also, I don't know how B's plan could be anything other than 001 (i.e., the first pension plan associated with the EIN assigned to B).

Maybe a true QDRO expert here feels differently, but it seems to me that the order doesn't meet the fundamental definition of "QDRO" and, therefore, is not enforceable against the Plan.

To reiterate, if the plan/resolution provided for a reversion, you may be able to take the position that the assets already reverted (they just weren't recognized by the employer as belonging to it). If that is the position taken then all plan assets were distributed/reverted and therefore no more 5500s and no more qualification compliance necessary.

You say it was a DB plan. What did the plan document/termination resolution say about excess assets? If they were to revert to the employer then I suppose you can take the position that in fact they already reverted but the employer is simply late in paying the associated income and excise taxes. If the excess assets were to be used in some other fashion this could be a much bigger headache to resolve.

Of course none of us have seen the document(s), but your analysis makes perfect sense to me (especially if "Hours of Service" is capitalized and an explicitly defined term)

Why not just print when you want to read the old fashioned way? I know it's not cheap, but it has to be cheaper than maintaining paper files.

I never "found" any examples and never expected to find any. I was merely looking for any helpful war stories and as usual the discussion on this Board was interesting.

Even if you've had the standard "reservation of rights" language in the "official" documents for years/decades, you never know what potentially contradictory statements have been made in writing, let alone orally, that could be used to defeat a motion to dismiss (or worse). So, I guess that means the answer to your second question is yes. The best advice, if you are going to announce a cut back or elimination, is to give as much advance notice as possible (a full year or more is nice), and then re-announce it periodically, so that whatever ammunition someone might have hopefully will be fired at you earlier rather than later, thereby giving you an opportunity to evaluate it in advance. Can't answer your first question, and your third question implies that revising the documents solves the problem, but that may not always be the case, which is the source of the problem.

GBurns, I don't know enough to know whether you're right or not, so I will happily assume you are right. Thanks. Do you know why the issuers require that? Was the individual insurance "world" different in 1961 when the IRS issued its revenue ruling? Are you saying that for many years the 1961 has led possibly millions of people to commit insurance fraud, or is this something new since ACA?

I am sincerely interested, and not just trolling. What do you mean when you say "would violate the individual health insurance policy"?

So, then, GBurns, do you agree that a "one-person" 61-146 arrangement that is exempt from the ACA market reforms is (a) legal, and (b) can be tax-free?

I am confused by all the criticism of zbenefits' tax analysis. Where in Notice 2013-54 or any subsequent guidance did the IRS revoke Rev. Rul. 61-146? If it didn't, why can't you still have a 61-146 arrangement if it covers only a single current employee as of the first day of the year?

Not sure what you mean when you say "we have received." Have you received it in a way that makes you a plan fiduciary (ignoring for the moment the fact that the plans have terminated)? You may wish to look at the DOL guidance from 10 or so years ago on what I believe were the mutual fund market-timing settlements. As a practical matter, however, for less than $50 per plan the best approach may be to just sit on the checks and do nothing unless and until more checks come in for the same plans in which case it may become a more serious issue for you.

I am waiting for 1/2/34. I'll probably take the day off to celebrate.