jpod

How exactly was it determined that you were only "1 or 2 days late"? If you are counting days from the 15th business day of the following month, I suspect that DOL would say you were a whole lot more than 1 or 2 days late.

I am inclined to agree with M. Preston that this is a made up scenario and the idea is to start a "discussion" concerning COLI or something of that nature.

George, I think it is double-trigger vesting: termination is the first trigger, and each dollar that comes in the door is the second trigger for that dollar.

I too think that they probably don't have a plan qualification problem. I am not so sure they don't have a Title I problem.

This is the kind of arrangement that begs for relief from 457(f) under the new regs which have been promised for the past 5 years but have not yet made an appearance. Technically, I think the physician would be vested in and taxable on each dollar that comes in the door during the 90-day window following his/her 3-year anniversary, on the day that dollar comes in the door, but talk about a completely ridiculous result and certainly not one contemplated as being subject to 457(f) when Congress extended 457 to non-profits in 1986.

You are correct that compliance with the new 408(b)(2) regulation is not necessary to avoid PTs with respect to welfare plans (at least not yet; note that the section for welfare plans is marked "Reserved"). Therefore, your failure to respond does not compel the employer to fire you or trigger a PT. Schedule C reporting is the plan administrator's obligation. If you don't give the plan administrator what it has requested, there is no mechanism for DOL to take any enforcement action against you. However, the plan administrator is required to drop a dime on you and inform the DOL via the Schedule C that you didn't respond. At some point thereafter the DOL will send you a letter asking you why you didn't respond (I have seen those letters). If you say "because we didn't feel like it," you will be safe from penalties etc., but do expect to be examined.

Bird, for the sake of argument let's assume the employer's consistent communication to the employees was something like "we'll match 50 cents on the dollar for your 2012 contributions," without saying anything else, such as "we reserve the right to stop at any time during 2012." Are you confident that the employer is not bound to continue the match for the entire year?

While it is a discretionary match, it is hard to give thoughtful advice without knowing exactly what was said, how it was said and when to all employees.

Ok. Corp. A Brother 1 1% value 50% voting Brother 2 same Son 1 24.5% value 0% voting Son 2 same Son 3 same Son 4 same Corp. B Brother 1 39% value 39% voting Brother 2 same Son 1 5.5% value 5.5% voting Son 2 same Son 3 same Son 4 same

Are Corporations A and B a controlled group or under common control under 414(b) or ©? A has voting and non-voting stock. Two brothers each owns 1% of the total value of all stock and each owns 50% of the total voting power of all stock. Their four adult sons each owns 24.5% of the total value of all stock. (Adult meaning over age 21.) B has voting and non-voting stock. The two brothers each owns 39% of the total value of all stock and each owns 39% of the total voting power of all stock. Their four adult sons each owns 5.5% of the total value and total voting power of all stock.

Nothing in 457(f), or the limited regulations and other guidance thereunder, suggests that there is such a rule. For now I would assume that there is no such rule. However, perhaps the proposed regulations which the IRS has been promising for 5 years will contain a S-T rule that takes S-T deferrals out of the definition of "deferred compensation" and therefore a S-T deferral would not be subject to 457(f) in the first place. Total speculation on my part.

Never mind the same fund, what if 5 or more participants buy the same stock? What if you have 25 different stocks held by 5 or more participants? It is a nightmare.

No, I think he was just PO'd.

Holdco: Your mention of an M&P plan causes me to ask, are you really merging Plan A into Plan B, or simply changing the documentation of a plan from individually-desigend to M&P? If the latter, there is no need to treat it as a merger, but if you want to treat it as a merger I suppose you can or if you've already set up a second plan by mistake then I guess you're stuck.

Two questions concerning joint and several liability for potential withdrawal liability. 1. Am I reading Title IV correctly to say that joint and several liability applies only to members of a 414© group? In other words, if you have two entities that are not members of a 414© group, but they are (or may be) members of an ASG under 414(m) (because one of the entities performs management functions for the other), there is no joint and several liability? 2. Assume owners of a corporation set up another brother-sister corporation to acquire a business in the same field, and that new business will be involved with a multiemployer plan. Assume further that in setting up the new corporation - and PRIOR to the acquisition of that new business - the owners bring in an unrelated person to be a very small shareholder (e.g., 1%) with the result that there is no 80% common ownership. Assume further that it can be proven in court that there is no other significant purpose to inviting this unrelated person to the party other than to break the 80% common ownership. Is there any case law suggesting that this could be attacked as an attempt to "evade or avoid" withdrawal liability under Section 4212© if down the road there is withdrawal liability and the contributing corporation is insolvent and can't satisfy that liability?

I think MBozek hit the nail on the head: How did it qualify as an ERD if the distributee was an entity?

If I were the coach's tax lawyer/advisor I would review his contract with the college and sort through this. My gut tells me the $750K is really (under IRC principles) a payment wages for his employment by the college; the fact that it is paid by the foundation is not determinative.

I have to admit that this is a terrifying scenario that never occurred to me, i.e., de-certification triggering W/L, but it really is as plain as the nose on your face. Does this happen a lot? I ran across a situation recently where the Plan Trustees amended the plan to reduce future accruals to a tiny amount, so the covered employees are essentially earning almost zero pension benefits. Is it likely that the employees would threaten to de-certify (and trigger W/L) unless the employer agrees in the next CBA to provide for significantly higher pay, or perhaps some kind of add-on defined contribution plan with employer contributions?

I think this is problematic as well. Here's how I analyze it under the regs. You start out with a compliant structure - payment event is a specified date, and the payout is over 3 years. However, you add on top of it an impermissible acceleration, the IPO. However, your new facts are different, because now there is a SRF until the earlier of the two events occurs. So, can't this document problem be fixed as long as it is fixed prior to the year in which the SRF disappears?

It should be paid to the deceased spouse's beneficiary. That is, it should be paid to the beneficiary designated by the deceased spouse, or the default beneficiary pursuant to the terms of the plan if there was no designated beneficiary at the time of the spouse's death. It is NOT payable to the deceased spouse's estate, unless the estate happens to be the designated or default beneficiary.

I don't see how the concept fits here. As I see it, this is what you have: 1. General Rule: three payments made on sep from service; there is no SRF. 2. Exception: payment is accelerated if an IPO occurs first, and amount of payment is measured differently. This is the problem under 409A. Any chance that this was created pre-2005?

I am assuming it is any sep from service, not just an involuntary sep from service, or we wouldn't be having this conversation. If all I need to do to get paid is to quit my job, that means there is no SRF (under the 409A definition), so I don't see how you could ever use the s-t-d exception. Unless there are still more facts which aren't clear to me, I think this structure cannot be 409A compliant.

I am not grasping the facts. I see only one payment, to occur upon the earlier of those two triggers. Where are the two payments? In what form would the payment or paymentss be made (e.g., lump sum)? Can you try again with a more precise and complete statement of facts?

1. Need to know more about the "litigation proceeds." For example, what was/were the claim/claims giving rise to the proceeds? Is it a case where at first the insurance company denied coverage when the insured died and then settled after being sued? If so, it seems obvious that the claim/claims and the ultimate proceeds would "follow" the life insurance policy when it was moved out of the plan. 2. Please tell us what type of "retirement vehicle" the policy could have been moved to other than another qualified plan?

I agree with QDRO's implied message. You've identified the issue and alerted your client, so you've done your job, admirably. Now, it's time for the lawyers to step in. You have qualification issues here as well as possible Title I ramifications, and possibly a claim against the person(s) who played a role in developing the EGTRRA document and/or the auditors. All of these matters need to be addressed, both technically and strategically, by counsel.