Belgarath

Agree with ESOP Guy. (Not the question that was asked, but just fyi - you can disregard service prior to the effective date of the plan for VESTING purposes.)

Family aggregation! Less affectionately (but more commonly) known as family aggravation.

Well, there's no CIVIL penalty as long as you provide it when requested by the participant, DOL, etc., etc. - however, if I recollect rightly, there is a potential CRIMINAL penalty under ERISA 501 if you WILLFULLY violate disclosure requirements. No dispensation I know of for an international man of mystery...

Curious as to how the tax reporting on this would be handled. Say account is worth 100k. 50K to the alternate payee. But then the plan pays the participant 20k from the alternate payee's account that was created under the terms of the QDRO. Is the alternate payee taxed on 50k, or 30k?

Yes, I would.

Thanks Peter.

Thanks.

Question - seems like there may have been litigation on this... suppose you earned the income and made contributions to the plan while working in a state that has an income tax. Then when you retire, you move to a state that has no income tax (like NH in the example above). Can your state of residence while working/accruing the pension attempt to tax the retirement income you receive while now living in NH?

Correct, it was not targeted at TPA's. But, since what happens in the CPA world sometimes has an effect on us, whether directly or indirectly, I thought I'd ask - just for example, if all this stuff is new, and if it causes CPA's to somehow need information from us sooner. Or, if it makes the CPA's work more difficult, will it mean we get data LATER than usual so that we may need to plan for larger last-minute rush, etc., etc.

Question - does any of this actually affect what we do as TPA's? Will CPA's need anything new from us due to the following? (I'm thinking the answer is no) I just received invitation to a Webinar that said the following. On recent IRS Forms 1065, Schedules K-1 and in related instructions, IRS launches massive reporting requirements re: negative tax basis capital accounts, at-risk activities, passive activities, partner level built-in gains, disregarded entities and many more. We can’t wait to be a deer in the headlights preparing Form 1065 and Schedules K-1. In this action packed program, you’ll learn: Course Outline Negative tax basis capital account reporting – What must be computed and disclosed (and by when) – How IRS keeps moving the target How partnerships (and S Corps) face the at-risk (and passive) activity reporting blues (and what to do about them) Plethora of other new info required re: built-in gains lying in wait Consequence laden all new reporting re: disregarded entity partners New disguised sale reporting New disclosures re: liabilities of partner Stunning penalties for failure to wholly and accurately complete K-1

Is the person getting referrals because of this work? An official thanks and/or recommendation in the organization's newsletter to members, etc? I have no idea if these things might be considered "indirect" compensation - that's a matter for counsel. It seems like a stretch to me, but the DOL is not noteworthy for being reasonable. And the firms that specialize in going after plans/fiduciaries are pretty creative...

Be safe!

Luke - yes, your assumption was correct.

Thanks Luke.

Just curious if you had ever encountered this. Non-Profit plan that otherwise would qualify for non-ERISA status, utilized (unintentionally, apparently) an ERISA 403(b) document. Has never filed 5500 forms. Obviously can use DFVCP program, so costs are not onerous. I see no option. By executing an ERISA document, it seems to me that they have elected ERISA status, and they can't say it is "non-ERISA" just because they would otherwise qualify for non-ERISA status. Any other opinions?

I think a bit of common sense needs to be used, but other than an egregious situation, I see no problem with it. Yes, for example, if you amend the plan to allow loans, one or more HCE's take a loan, then you amend it back out a week later, that's likely a problem. But in general, assuming the loans are available on a reasonably equivalent basis, and both current and effective availability are satisfied, the fact that no NHCE's choose to take a loan does not prevent the plan from amending the loan provision out of the plan. I've seen very few plans that were structured such that removing a loan provision presents a problem.

Did she have a named beneficiary or beneficiaries? If not, what does the plan language have for a hierarchy of beneficiaries if no one is named? IMHO, you have to follow through that process.

Ok, got it. Obvious brain cramps yesterday. Thanks to you both.

Thanks Lou. Yeah, I know RMD's are not eligible for rollover. The assertion was made that since the conversion is taxable, the taxable amount would represent a "distribution" from the plan. I know this is wrong - but this is the piece I'm trying to "prove" - that it is not, in fact, a distribution from the plan for 401(a) purposes.

I've been driving myself crazy on this. Question came up as to whether an in-plan Roth conversion/rollover could satisfy the RMD requirements. I know it can't, but I'm having a devil of a time finding "proof" - and I'm sure it is staring me in the face! I recalled that there was guidance a long time ago where it said that for 401(a) purposes, an in-plan rollover was not a "distribution." So I looked back at IRS Notice 2010-84, etc., etc., and while I found SOME of what I was looking for, I couldn't find anything that confirmed this head-on - (or possibly my eyes scanned over it). Anyone recall the citation for this? There's ample IRS verbiage out there that addresses this in an IRA context, but seems to be a dearth of similar IRS publications answering this same question for designated Roth accounts. Shoulda stayed in bed this morning...

An interesting argument, but I wouldn't want to defend that position!

Wow, that opens up a big can of hurt!

The SIMPLE special rules for mergers/transactions, etc. are found in IRC 408(p)(10).

Some insurance companies, who actually know what they are doing when it comes to issuing insurance policies in qualified plans, can easily provide this information. Some other insurance companies are absolutely useless in this regard. Hopefully you get one of the good ones...

We take EBP's approach - we just send them for all clients. Otherwise too easy to miss notices in a situation that requires them, and this way we don't have to think about it! Participants are "noticed" and "disclosured" to death already with stuff they don't read - what's one more thing to recycle, right?