mbozek

If the 5 participants can be contacted the plan should tell them to obtain a Individual Tax identification number ( ITIN) from the IRS which allows them to request the distributions from the plan because they have established their identity. ITIN is issued to workers who cannot be issued a SSN because they are not legally permitted to work in the US. ITIN allows worker to file a tax return and get tax refund. ITINs look like SS number except that the first digit is 9. Q- If these people were using fake SSN to be employed they should have obtained a ITIN in order to file their income tax returns. No brainer. If plan cannot locate the missing participants then the benefits can be forfeited under IRS regulations.

Employee will declare bankruptcy before trial because he will run out of money to pay his lawyers or wind up representing himself at trial. I have seen it happen.

In a case like this the side with the most lawyers wins. Question to the employee is just how much justice can he afford? Optimal solution for the employee is to get the best settlement he can because it will be cheaper than the cost of a good lawyer.

Can the employee afford the cost of defending their right to blog about the ESOP plan requiring non disclosure and non disparagement? I don't see this as a winning case for the employee.

Does signing the 5500 make the accountant a plan fiduciary under ERISA regs?

Secondary beneficiary refers to some other than the employee or spouse. DRO can provide that if spouse predecease employee then spouse's benefit can be paid to employee but not their child. Plans limit use of this option. For example if QDRO provides that employee will receive 40% of the value of benefits as a separate life annuity then those payments cannot be continued to spouse after his death. If spouse receives a shared portion of benefit paid to the employee for life, e.g.50% of annuity payable to employee, then plan can transfer spouse's payment to employee if spouse dies first. In this case benefits to spouse would cease if employee dies first.

In a DB plan there are 3 separate benefits that can be paid to the AP: 1. AP can get separate share of benefits paid to employee when employee commences benefits, eg. 50% of accrued benefits that would be paid to unmarried employee. 2. AP can get a separate annuity based on employees accrued benefits that is payable to the AP when the AP becomes eligible to commence benefits under the plan. 3. AP can get survivor annuity under the plan after employee's death. AP can get any or all of the above benefits. Parties can negotiate additional options e.g, when spouse dies spousal annuity will be paid to employee. Parties can mix and match benefit streams to extent permitted by plan. Designation of a secondary beneficiary to receive benefits is subject to plan rules. Most plans do not allow benefits to be paid after death of the employee or beneficiary.

To put this discussion in perspective the fiduciary standard for fees charged by advisors and TPAs is that the fees must be reasonable for the services charged. If the fees increase by 100, 200% or more without any increase in services provided to the plan then the fees are unreasonable. Conversely ERISA does not require that fiduciaries select only funds with the lowest possible fees but plan can offer funds with higher fees if the funds provide additional services to the plan at a reasonable cost.

This is a consequence of the continuing 3% reduction of the IRS budget every FY by the House b/c of the Lois lerner mess. IRS has reduced telephone taxpayer assistance services during tax filing season and no longer will prepare tax returns at IRS offices. Tax audits have declined to point were only .8% of taxpayers with income under $200k are audited. I also have a vague recollection that IRS was planning to stop issuing determination letters.

2 cents: If he has not suffered any injury why would he sue? He could ask for a declaratory judgment that the non disclosure agreement is not enforceable but that would be very expensive with no guarantee that a court would find in his favor. If he lost he could be required to pay employers legal fees. Need to read the non dis agreement.

I though there was something in the regs which required that the recurring RMD must be made at least every 12 months without specifying that it must be made every month.

I thought that QLAC were intended to be marketed to TIRAs where up to $125k could be invested in a deferred annuity contract that would defer commencement of benefits for 20 years. There are many different annuity contracts that are being marketed with different features including whether there is a forfeiture of the amount deposited into contract if death occurs before distributions commence and whether withdrawals can be made before benefits commence. Its complicated.

If he is getting divorced all of his marital assets are subject to division under state equitable distribution or community property laws. Court will determine spouse's interest in client's pension. Participant needs to wait until divorce decree and qdros are approved before changing beneficiaries.

#1How are proceeds of check to be allocated among the participants in the terminated plan? Under IRS rules only amounts that can be deposited are funds of plan participants. Can plan establish accounts for employees who did not rollover to the new plan? For # 2 need to read the merger agreement between the Dr goup and hospital to determine if Hospital has any dibs on surplus assets of Dr group. Q- is who is successor in interest of Dr group who has ownership of the check? If Dr group has liquidated who has legal authority to endorse/ cash the check on behalf of Plan and how will it be divided up and taxes withheld/reported? Does plan still maintain a checking account?

Whether the Non disclosure agreement violated ERISA rules for distributing plan benefits is a separate issue from the contractual obligation of the employee not to disparage or disclose information about the company in return for receiving the stock. Q for OP is whether he has the financial resources to defend himself against a lawsuit filed by his employer if he violates the terms of the agreement.

When the safe harbor reg was issued in 1979 90% of 403b assets were held by TIAA/CREF which had only 2 products - TIAA traditional annuities and the CREF variable annuity. DOL reg did not require that a safe harbor plan add another vendor such as VALIC or Fidelity in order to have a reasonable choice. I don't see anything in the DOL reg that requires a safe harbor plan to have multiple vendors. No brainer. DOL Q/A-16 is vague as to whether a plan must have multiple vendors because the regulation does not require it and FAB cannot contradict the safe harbor reg.

how will this the conversion occur? Will the DB plan be terminated? Will the DB plan benefits be transferred to the 401k plan as an account balance? Lot of questions.

I am going to leave the nuances of DB plan requirements to the actuaries but from a tax perspective if the contribution under IRC funding rules is 100k and value of the accrued benefit for that plan year is 100k then he can roll the 100k over to an IRA tax free and claim a tax deduction of 100k. See IRS pub 560 P 15-6. DB plan contributions are based on actuarial assumptions and computations. At 70 1/2 he must commence taking mrds equal to at least 3.65% of the account balance at the end of the prior year. Participant saves the 15.30% FICA/SECA tax or $15,300 on the $100k contribution in addition to the income tax deduction.

What happens to the 100k distribution? If it is rolled over to an IRA then there is no tax except for the portion that is a MRD at 70 1/2.

I have never seen a w-2 with income that did not have withholding for taxes and FICA. I don't think there is a minimum amt of w-2 wages needed for FICA withholding.

Under IRS reg. 1.401(a)-20 Q/A-27 a spousal waiver is not required if it is established to the satisfaction of a plan representative that there is no spouse or the spouse cannot be located. The waiver of spousal consent requirements for a 401k plan are similar to the requirements to waving a QPSA.See Q/a-32.

The partner may be a partner in name only but is an independent contractor to the firm who receives a 1099 misc. Law firms designate an IC with clients as a partner to boost the attorneys profile with clients but the partner will be paid as an IC based on his/her own billings. Some law firms designate employees as partners but are paid as w-2 employees. If the partner is an IC for tax purposes then that person can establish a solo 401k plan.

Why is this question being raised 6 years after participants death? Has son filed a claim for benefits?

Based on Aug CPI-U number there will be no COLA increase for SS beneficiaries which will create big problems for the political class in a presidential election year. Also its possible that some Medicare beneficiates could have higher Part B and D premiums.

How are the Docs payment treated by the hospital? Did he file a w-4? If hospital is treating him as an IC why is this question being raised? One basic question that needs to be answered is does the hospital determine what he does and how he does it? Or does he have control of what he does and when he does it? It seems that the question of the docs employment needs to be addressed to the Hospital's tax dept. What does the Doctor's contract to provide services state is his employment status? There is precedent for treating doctors performing services for hospitals as IC. Google :courts approve of treating doctors as independent contractors, Barry Frank, Practical tax strategies July, 2003