jpod

try the IRS problem resolution office

From the facts it's not clear to me whether a PT has occurred YET. If not, consider the DOL's EXPRO exemption program. You may be able to get a quick PT exemption to permit him to buy the property from the plan (for "adequate consideration," substantiated by a non-bogus independent appraisal).

No, unless you make it attainment of age 65 rather than retirement on or after age 65. Or, to put it another way, once the employee attains age 65 the SRF ends whether or not he retires.

Unless the plan document says something different (which is doubtful), anything in the plan at death goes to the plan beneficiary. I don't see a basis for handling it any other way. That's not to say there won't be a lawsuit if the IRA beneficiary is different than the plan beneficiary, but if the plan administrator fears that I suppose it can file an interpleader action.

One "gets around" ERISA preemption because there is no ERISA coverage.

Maybe I didn't read the quoted material carefully enough, but does it say where the $500 will be deposited? If it is deposited to the IRA after the rollover IRA is established, and the depositor does not have the option to receive it personally, then I think (a) it is not a pt, and (b) it can be characterized as IRA earnings (rather than an IRA contribution).

If they are all and likely to remain NHCEs, or at least predominately NHCEs so as to readily satisfy 410(b) coverage testing, why not a qualified plan for them? (And, any attempt to shoe-horn them into "top hat" status is very much pushing the envelope.)

Client has a Section 125 plan document that covers both "premium conversion" for health and dental insurances, and medical and dependent care FSAs. While there is only one document, the dollars elected for premium conversion are unrelated to and not in any way dependent upon the dollars elected for either FSA, and vice versa. We are in the middle of the first plan year (calendar year), and realize that if the plan is tested for discrimination on a combined basis, the plan will fail the nondiscrimination tests. However, if the premium conversion component can be viewed as a separate POP, that component passes via the safe harbor. Under the proposed regulations, can we treat the premium conversion component as a separate POP which automatically passes? If not, can we amend the plan retroactively mid-year to break it up into two plans: a POP and a plan for FSAs?

Doesn't sound like there are any legal obstacles, but isn't it possible that the vendor/recordkeeping pricing structure would be less favorable if plan is limited only to teachers?

I don't think it helps answer my question, although I stopped looking for an answer to my question because it became a moot point due to other facts which I did not have when I first raised it.

And how would you propose to offer cobra if (a) the employee is no longer a member of the covered group under the insurance, and (b) coverage is available under the insurance to someone who is not in the covered group only to the extent necessary to comply with cobra?

Leevana: What is your authority for your statement? There are 2 employment related QEs: termination of employment and reduction in hours.

Belgrath, I know that you can't force a distribution to surviving spouse prior to later of deceased pparticipant's 62nd birthday or NRA. However, I can't find specific notice requirements applicable post-death anywhere in the regs. I am not questioning the prudence of reminding the surviving spouse of his rights, but I am looking for specific regulatory requirements applicable to this situation identical or comparable to the requirements applicable during the participant's life, and I can't find any.

Sorry, folks, but I am not seeing how any of the mentioned regulatory requirements apply after the death of the participant. Clearly 411(a)(11) doesn't apply after the death of the participant because the regs. under 411(a)(11) say that it doesn't. I am not seeing any linkage in the 417 regs or any other regs to the "annuity notice" or "right to defer notice" applying after the death of the participant. If I am missing the forest through the trees I would appreciate a kick in the head.

QDRO, I am having difficulty finding the link between the "annuity notice rules" OR the requirement to provide notice of the consequences of not deferring in the context I have described: the participant has croaked, and we are dealing with the surviving spouse's right to elect either an annuity contract purchase and distribution, or a cash lump sum (or to defer until a later time).

Participant in qualified money purchase pension plan (also subject to Title I of ERISA) dies. Surviving spouse is sole beneficiary. Default form of benefit is single life annuity paid for with entire vested account balance, but surviving spouse can elect a lump sum (which, in fact, is what he wishes to do). Other than describing his options in plain English, and providing the 402(f) notice, are there any other types of disclosures specifically required by statute or regulation?

Consider having a "bad boy" forfeiture clause in the plan. (They were permitted under pre-ERISA vesting rules, I believe.) That won't get $$ in the hands of the employer, but the money will be freed up to be used for other plan purposes, which could then save the employer $$, if not immediately at least over time. You would need to consider the extent to which that could be applied retroactively to benefits already vested.

What is the reason for requiring spousal consent? If the answer is because this is an erisa-plan, the solution (if any) may be different than if the answer was, merely, because the plan says so, or because someone automatically assumed it was required.

My interpretation of the question is whether people earning more than, let's say, $300,000, can be in a group that is different from everyone else's group, but the allocations for people in the above $300k group will nonetheless be based on compensation not in excess of the 401(a)(17) limit. Tom Poje are you saying that THIS is impermissible?

I am confused by the angst over this. This is what the pertinent portion of the regulation says: (3) The sole functions of the employer or employee organization with respect to the program are, without endorsing the program, to permit the insurer to publicize the program to employees or members, to collect premiums through payroll deductions or dues checkoffs and to remit them to the insurer; and It sounds like the only thing the employer is doing is delivering payroll deduction amounts. Separately, it is doing it under a cafeteria plan to enable employees to save taxes. We all know that the DOL takes the position that employee money is employee money even though it may be fictionally treated as "employer money" for certain purposes under the IRC and IRC regulations. This is not to say that there isn't an endorsement going on here for other reasons, but not because of the facilitation of premium payments via payroll deduction.

QDRO is spot on. If I were helping one-on-one, I would ask: did you really "forget," or did the broker somebody else give you bad or incomplete advice vis a vis contributions for employees? "Forget" is a 4 letter word in these matters. Then, if he truly forgot I would ask how did you all of a sudden remember? If it was a case of bad or incomplete advice, I would ask how did you find out you were given bad or incomplete advice?

This is not responsive to your question, but check your option agreement (and the underlying option plan document, if there is one) to see if you can do a "cashless exercise" (and also "cashless tax withholding," if there is a built-in gain).

The NY case is Morgan Guaranty Trust Co. v. Tax Appeals Tribunal, 587 N.Y.S. 2d (Ct. App. 1992). As noted the case involved a real property tansfer gains tax, not what I'm talking about when I say "real estate taxes." Shortly after the decision the NY Atty General issued an opinion saying the Morgan Guaranty opinion shouldn't apply to such real estate taxes. However, that was only the opinion of a state agency, and moreover my interest goes beyond New York State. It appears that the more recent U.S. Supreme Ct. cases addressing the "relate to" language of Section 514 of ERISA might weaken a preemption argument in the case of real estate taxes, but I'm not just trying to find out what goes on in the real world. Are taxes being paid on real estate in ERISA plans because nobody has thought long and hard about this issue, or because there is some on point case law which I am missing?

The 409A(b)(3) funding restrictions triggered by a qualified plan's at risk status apply to "transfers or other reservations of assets after August 17, 2006." However, do these restrictions apply to the funding of benefits otherwise grandfathered from 409A?

Any takers on this?