mctoe

Thank you for the replies. I tried the detailed SS calculator a few weeks ago and had some difficulties. I will try it again.

Governmental defined benefit plan has a 50% Social Security offset at age 62 for retirees. The offset is based on earnings only while an active plan member. For example, a 45 year old plan participant "retires" after 15 years and his/her Social Security offset amount is only based on those 15 years. Does anyone know how to calculate the offset using only specific years of earnings? In this example, how are you able to determine what the SS benefit is at age 62 since it is 17 years in the future? Thank you.

At separation of service from a gov't DB plan is a participant permitted to rollover governmental 457(b) funds to the DB plan to purchase an "annuity" (increased pension benefit). The participant would not be purchasing service credits.

Does anyone know if interest must be credited to DROP money? Or is based on the plan document/agreement?

After reviewing the link provided in the previous post again it doesn't answer your question. 2014-54 also does not appear to answer your question. I guess a question could be asked of whether any interest was earned on the after-tax employee funds contributed? I see your point regarding the pro-rata rule; there is no ERD of other money.

The cited link indicates that isolating the after-tax only is not permitted. It appears the pro-rata rule would apply.

Thank you mjb. Out of curiosity, do you know which NYC agency it was?

mbozek, How is NYC able to offer a 401(k) plan? The NYC 401(k) started in 2002; the 457(b) started in 1986.

Thank you ETA Consulting.

Thank you mbozek. I had another thought regarding this; would IRC 72(e)(8) apply to this distribution upon issuance of 1099r? Thereby creating a distribution of both pre and post tax.

It appears that Q&A 11 would apply: Q-11: Does section 72 apply to a deemed distribution as if it were an actual distribution? A-11: (a) Tax basis. If the employee's account includes after-tax contributions or other investment in the contract under section 72(e), section 72 applies to a deemed distribution as if it were an actual distribution, with the result that all or a portion of the deemed distribution may not be taxable. It also appears from this Q&A that the participant would not have a tax liability due to the fact that the loan only included after-tax money. Would a 1099R need to be issued in this example?

Yes, participant is defaulting on loan. Governmental plan doc permits after-tax loans to its active participants.

Participant borrows $30,000 of after-tax contributions only from DB plan. A month later, the participant elects to cancel the loan. Is this a deemed distribution? If yes, what are the tax consequences to the participant?

Yes, other than the IRS. For example, where/who does a 457(b) participant get assistance from if a governmental 457 plan is not providing adequate disclosure/investment documents.

Does anyone know what federal organization, if any, regulates governmental 457b plans? I believe DOL only regulates ERISA plans.

Thanks Geertom

Is it possible for an individual to participate in both a governmental 457(b) and a non-qualified deferred compensation plan of a private employer? Can an individual contribute the maximum annual deferral to the gov't 457(b) and for example $20,000 to the non-qualified deferred compensation plan?