jpod

Look, not to be a party pooper or anything, but while the participant may have thought of D has his daughter, and because of that S thinks of her as his sister, the lack of the participant's name on the birth certificate does raise an issue. I don't think he had to ask for the birth certificate, but now that he has it he is presented with a bit of a conundrum. S signing a hold harmless is the safe way to go here.

Agree with Mike. If a p/s - yes; a corporation - no.

What does the participant report as his "occupation" on his annual 1040? "Retired"? Maybe that shouldn't impact the PA's behavior but it could present a 50% excise tax risk for the participant.

The question pertained only to the extra year kicker, so that's all I answered, but Luke's points are well taken.

This really isn't all that relevant to the issue in play in this chain, but my guess is that Congress didn't intend for the word "retire" in 401(a)(9) to mean anything other than terminate employment with the employer maintaining the plan. The concept first appeared long before ERISA (perhaps 1962 if not 1954), and I don't know but I suspect that the thinking in those days was that anyone who worked to age 70-1/2 or beyond before leaving the employ of the employer was without doubt "retiring" from the workforce. In 2019 life expectancy terms, 70-1/2 would be more like 85-1/2 (although I am sure the actuaries will correct me if I am wrong about that). Forgive me if I have said this on BenefitsLink in the past.

Who are "we"? Are you part of management or are you in the union group?

ESOP Guy: 1. I could be wrong, but the implication from the OP is that the "good faith bargaining" has concluded. 2. Again, I could be wrong, but I assume from the OP that he is a union member and not involved in the plan design/structure so the warnings you are giving while sound are not something which HE needs to be careful about.

Thanks Tom. Was this a 401(a)(9) Q&A? If so, the inference I am drawing from the second sentence is that the employee very well could have "retired" even though he returns to work sporadically thereafter, rather than the opposite inference.

I don't see any likelihood of being harmed in any way just by virtue of having to switch plans, but whether you are going to be harmed in other ways depends upon the terms of the CBA which your representatives negotiated on your behalf. I don't think you'll get the guidance you would like from this Message Board. You should talk to the individuals who represented you and your fellow employees.

I don't see any. There is no issue of manipulation of the timing of any payments here.

Bird, fair point, but I think the odds are one out of a gazillion that the IRS would question a forced RMD in THIS SCENARIO.

Yeah, this is really a ridiculous conversation in my opinion because where there is a plausible argument in favor of the theory that there has been a "retirement" why should the PA take ANY risk with respect to the plan's tax-qualified status? It is difficult for me to believe that the PA would waste energy thinking about this let alone pay an expensive ERISA lawyer to ponder it (unless the participant is related to an insider, which would contradict the "no subterfuge" assumption).

I am inclined to agree with ESOP Guy on this one. If the PA wants more cover then it can get S to acknowledge in writing that D is also a child of the participant and to hold the PA harmless from paying 1/2 to D.

We shouldn't be having this conversation unless under the terms of the plan the participant's children are the beneficiaries by default, or the participant simply designated "my children" without naming them. Is either in fact the case here?

The employer has money at stake if this is discovered by the IRS on audit and the employer has to make a payment to the IRS in lieu of plan disqualification.

ESOP Guy makes a worthwhile observation concerning the exception to the last day and/or 1,000-hour rule which we frequently see in plans. But the facts are what the facts are and the tail can't wag the dog.

I think your new fact pattern is subsumed by your first fact pattern. My view of this is that it is entirely reasonable for the PA to take the position that the individual terminates employment each year, and consequently RMDs should be distributed. I see zero risk in taking this position, either from an IRS audit perspective or from the perspective of a participant Title I lawsuit. The only risk as I see it is an IRS audit risk by continuing to take the position that no RMDs are due.

What other indicia of employment are present during the remaining months of the year after the month during which the worker works?

To be honest I don't remember what the length of time is these days but I think we are on the same page.

I am thinking that you are correct. The spousal waiver of the mandatory J&S form of benefit can only be made within a limited number of days prior to the annuity starting date.

TMH, please clarify what you are asking here. Who are you in relation to the employer and be more precise please with respect to your question(s). thanks.

I am not entirely sure what you mean by "run the gift card through payroll processing." Regardless of what you mean, taxes (income and FICA/Medicare) must be withheld on all taxable compensation, even non-cash compensation. There are a few exceptions, but I am pretty certain there isn't one that would apply to a taxable gift card. Will the employer get the electric chair for not withholding? Probably not, but if the requirement to withhold is relevant to whether the comp gets counted for plan purposes then you need to take the withholding requirement into account whether or not the employer actually withheld.

If it is not an excludable fringe benefit, what is the authority that says "you are not required to withhold taxes at the source"?

Does he have a business that can be sold to a buyer with an underfunded DB plan?

Working copies as Luke described are fantastic tools. People who administer plans for our clients LOVE THEM, and we often will prepare one even if there has been only one amendment.