jpod

What is the investment platform/cost structure for the 401(a) match plan? How about just converting it to a 401k and terminating/stopping the 403(b)?

If you grant 10,000 options at $20/share which are all immediately vested and subject to no conditions whatsoever, but only 5,000 are exercisable immediately and the other 5,000 are not exercisable until the next calendar year (or later), can all 10,000 qualify as ISOs or only 5,000?

The 409A regulations providing an exemption for stock options define a "stock option" as meaning an offer of the corporation for "a stated period of time" (i.e., the exercise period). Can you meet this requirement if the option exercise period expires 10 years from the date of grant or 3 years from the vesting date, whichever occurs FIRST? I don't think anyone would ever question that you still have a good "stock option" if it expires short of the stated expiration date on account of termination of employment. Does the "stated period of time" requirement mean a maximum period of time, subject to earlier termination for whatever reason stated?

pensiondude: By any chance are you asking whether a conversion of an overfunded db to a dc somehow avoids the reversion taxes?

Get the lawyers or the parties themselves to sign a letter confirming the error and that the correct SSN and DOB are X and Y. If you make them push this back to the judge for a new QDRO he/she may be less than pleased to say the least.

Did you use the DOL's lost earnings calculator to calculate lost earnings of $1.25? Was there only one delinquency or were there multiple delinquencies/payrolls? Exactly how many days "late" are we talking about here? I am having difficulty grasping how one could have enough confidence to report a delinquency on the 5500 yet the lost earnings is $1.25.

Is this a trick question? As long as the cost of care for their respective child/children can be substantiated), why are you questioning this?

I assumed that the Father, or a person under the Father's thumb, is the fiduciary who made the investment decision for the plan, and therefore it is most likely an act by a fiduciary using plan assets for his own benefit (i.e., the motivation is to help the son). Answer to your second question is trickier. Completely undoing it so Plan gets its money back (perhaps with interest) would do the trick, but there would still be a risk of excise taxes and DOL enforcement for the period of time prior to the transaction being undone. Lot's of luck finding a third party to buy this thing from the plan which wouldn't be another potential PT.

Most plans say that the plan is responsible for plan administrative expenses "unless the employer pays them." I don't think I've seen a plan that said that the plan is responsible but the employer can elect to reimburse the plan. I think if you have that language you should be fine treating it as an expense reimbursement rather than a contribution which must be allocated in accordance with the contribution allocation formula. If you don't have that language, I agree with QDRO that the more time which has passed the harder it is to characterize as an expense reimbursement rather than a contribution.

Thoughts: 1. If it is a single member LLC owned by son, the LLC is ignored for tax purposes so, I would think, it is treated as a direct investment by the son for purposes of the PT rules of Section 4975 of he Code (if not also for Title I of ERISA but frankly what difference would that make anyway once you get him hooked by 4975). 2. Doesn't it smell like a "self-dealing" PT even if the LLC is not a DP or PII?

t. haley: Your interpretation seems to good to be true, but I admit to never having researched it and I was going based on memory. Maybe you're right; good luck.

You keep changing the facts. If he has other IRAs with other assets, the "date of distribution" exception won't apply here, except to the extent that 100% of the other IRA assets isn't enough to satisfy his RMD. You must use the $273K value in calculating the aggregage MRD from all three IRAs, unless the client has good reason to believe that the $273K value was bogus, in which case he should explore that further so he can have some back-up support for using a lower value.

It may not be a train wreck, but you are absolutely correct that if it is a Title I plan the employer (or somebody) has a fiduciary responsibility to select and oversee the investment choices. Good luck finding an article that states this explicitly with respect to a 403(b) plan, but maybe that was pointed out somewhere during the 2007-2009 period when people were amending 403(b) plans to comply with the IRS regs.

Respectfully disagree. The party with the right to enforce the anti-assignment provision is waiving that right, in fact he/she is directing that it be violated. There is no breach of contract here.

QDRO: Suppose the plan is pulled for audit. The agent identifies this (somehow) and even though there is a letter from the uncle as I described the agent says the withdrawal doesn't qualify under the regulations. Suppose further that quality substantiation is provided showing that the home was in fact used as the participant's principal residence (e.g., utility bills). What does the agent have to back that up? NOTHING.

RPG and ESOP GUY: But, the participant is consenting to the "assignment" by directing the rollover. Do some people in the industry really fear that a loan rollover directed by the participant/borrower is somehow an invalid rollover or a qualification issue or fiduciary breach issue or a PT issue because the paperwork contains an anti-assignment clause?

Where do you see anything in the regulation saying the participant must be the OWNER of her principal residence? Sure, we can infer that this is what the drafters of the regulation had in mind, but they didn't say that. I think substantiation would be a tougher issue, however. Probably need a letter from uncle confirming that participant will live there and as a condition she must contribute $X towards purchase price. I don't think you or the Plan should care whether it is a gift, advance rent, or whatever for tax purposes.

Why don't you just name them in the amendment (e.g., Joe Smith eligible on date he completed first HOS)?

One trust won't cause you to have one plan rather than two as long as the 414(l) criteria are respected. What issues are you talking about?

any thoughts on this?

Single Employer has two 401(k) plans (for good reasons). Wants to set up a master trust (for a good reason), and understands potential recordkeeping complications. From a qualification perspective, does each plan need to have its own trust that then "funnels" everything into a master trust (so that there are three trusts), or can there simply be a single trust for both plans?

MoJo, I think we are saying the same thing: Once the contributions become plan assets they must be held in trust for the benefit of the plan. Once they are in trust a delay in investing them raises 404 issues, but not PT issues.

Not sure about your last comment MoJo. I think the concept is they become "plan assets" as soon as they reasonably can be segregated, and when they become plan assets they must be held in trust. That is not to say that it would be insufficient to place them in a special "parking trust" until it is convenient to send to the recordkeeper, but it still must be a trust (e.g., protected from the employer's creditors). On the other hand, maybe that's what you're saying and my reading comprehension is a bit off.

I am still wondering why you feel compelled to assume that there was a PT when the money was deposited to the plan 2 days after payroll date.

I guess I would want to make sure that per the annuity contract the plan sponsor/trustee has no residual authority to enforce the contract (highly unlikely I admit).