mbozek

I dont know what else you can do other than retain counsel in the country to confirm the validity of the divorce. It is not unusual for divorce decrees to have no property settlements where there is no equitible distribution rights in divorce. All the plan admin can do is have the employee sign an indemnificaton and hold harmless agreement reimburse the plan if a spouse turns up. I dont see how the PA can refuse to pay the benefits until the ee provides the signature of an ex spouse if he has presented a valid divorce because he may not know the ex's where abouts. I think there is also a recent DOL opinion this issue. There was a case a few years ago where a PA refused to pay death benefits to a spouse because of allegations that the spouse had abandoned the employee. The spouse had to go to ct to get the funds and the ct ordered the plan to pay legal fees to the spouse.

What is your employment status in your current 401(k) plan? Are you an employee or a partner? Why do you need to find an attorney if the assets are held in a 401(k) plan? Under federal law it is the obligation of the 401(k) plan administrator to protect the plan from the claims of creditors to plan assets, not individual participants, since the payment of plan assets to a creditor could disqualify the plan.

Is the client willing to pay the filing fee and the fee to a tax advisor to prepare the request? The question is what makes the client nervious? If the plan follows the requirements of 457(f), (benefits are subject to substantial forfeiture until termination) there should be no need for a PLR.

There is no formal termination since there is no trust which holds plan assets. If the plan is subject to ERISA the employer must file a final 5500, distribute a SMM, a 204(h) notice and have the board approve a plan amendment terminating the contributions. If the plan is funded by custodial accounts the employer needs to transfer the assets to an annuity contract since a rollover is not permitted upon the termination of the plan or the employee could transfer the funds to another custodian who will hold the assets under the rules for 403(b)(7) accounts. Amounts held in an annuity contract will be distributed in accordance with the terms of the contract.

Since most plan sponsors cannot make the changes that you recommend because they have adopted m/P or volume submitter programs which do not permit individual amendments, plan sponsors must rely on the preemption of state laws by ERISA to prevent the extension of benefits for married couples to non traditional relationships. (Please explain how an employer who has adopted an m/p plan can make amendments to clarify the definition of spouse that you propose). 1. State laws determining spousal rights to retirement benefits have been preempted by ERISA by the US Supreme Ct. See Boggs v. Boggs, 520 US 833 (community property), Egelhoff v. Egelhoff, 533 US 141, (termination of rights of ex spouse under state law) because ERISA preempts state laws affecting the administration of plans subject to ERISA. I dont know of any exception for a state law that mandates recognition of same sex marriage especially since ERISA does not preempt any other federal law such as DOMA. 2. There are other Supreme Ct cases such as Ingersoll Rand and Delta Airlines that preempt state laws which provide rights not available under ERISA. I would be interested in any cases that apply state laws to plan administration or benefit rights of a plan subject to ERISA. 3. Using a state law selected by the plan sponsor as a reference to intrepret plan provisions not regulated by ERISA is an accepted practice under conflict of laws. A same sex couple married in MA would not be permitted to claim any spousal benefits available under ERISA which are not provided under the plan because (a) MA law is preempted by ERISA and (b) DOMA limits the defintion of spouse under federal law to a member of the opposite sex. Applying a single state law to determine who is married under the plan is permissible under ERISA because it prevents the plan from having to deal with different state laws which would burden plan administrtion which as noted in Egelhoff is the rationale for preempting state laws which affect an employee benefit plan. My own prototype plan does not define spouse and the employer is the plan administrator who is charged with interpreting the plan. The prototype sponsor is the only party who can amend the plan. Note: For DC plans which cannot be amended, claims for death benefits by a same sex spouse can be avoided by having the plan administrator file a complaint of interpleader in Fed ct naming the spouse and the relatives of the deceased employees as parties. The PA would pay the funds into the ct and withdraw from the case leaving it up to the ct to decide who is entitled to the benefits.

There is no basis for applying state laws allowing same sex marriage to spousal rights mandated under plans subject to ERISA. Under DOMA the use of the term spouse under any federal law is limited to a member of the opposite sex, e.g., the requirement under ERISA and the IRC for a surviving spouse's benefits, J & S annuities and tax free rollovers of death benefits. Also the term spouse in a FSA must be limited to a member of the opposite sex since the tax benefit for a spouse in a FSA is defined under the tax law, as well as the continuation of health ins under COBRA which is mandated under ERISA. Section 514(a) of ERISA preempts all state laws which would apply to spousal rights under plans subject to ERISA including a state law defining spouse as a member of the same sex as the employee. This is no different than the preemption of spousal rights under state community property laws by ERISA. The only place where a state law definiton of spouse may be applicable in an ERISA plan is where spouse is used as an optional term such as a default beneficiary for pension benefits in the event of the employee's death without a designated beneficiary. However the plan could define spouse with reference to the laws of a state that does not recognize same sex marriages, e.g. " to the extent not preempted by ERISA, the laws of the state of Texas will apply". In an insured plan the law of the state where the contract is issued would apply. The term spouse would include same sex members under plans regulated by state law, such a state pension plans. NJ recently passed such legislation.

K: Cant the new employer avoid the default issue by commencing to withold the loan payments from payroll as soon as the employees have been transferred the same as withholding of salary reduction on the theory that the loan obligations are being transferred under the terms of the acquisition so that there will be no default in loan payments? I dont see any need to wait until assets are transferred before commencing loan payments if the acquisiton documents provide for the transfer of all plan assets to the acquiring employer's plan.

I am assuming that the prototype sponsor has not received approval for GUST amendments. Have you contacted the prototype sponsor to ask them when the GUST amendments will be sent to the employers? Participating employers usually have one year from the date the IRS approves Gust changes to the prototype to adopt the GUST amendments. EGTRRA amendments were supposed to be adopted by the end of the 2002 plan year.

Why not read the instructions to the 5330 form to see which plans are subject to the PT tax?

You may need to consult a bankrupcty attorney who does workouts of distressed companies.

How can a foreign government (since an embassy is a representative of such govt ) maintain a 401k plan? Does the adoption agreement for a M & P permit such adoption?

In some acqusitions, the sale of all the stock of a subsidary is considered to be an an asset purchase by corporate lawyers even though 100% of the stock and any retirement plans sponsored by the sub are transferred to the buyer because the stock is considered to be an asset of the parent corp.

Many custodians will not accept non publicly held co. as IRA assets. Most of those that accept privately held co as assets require that IRA owner waive liability of custodian from PT violations and charge higher fees. Also custodians are prohibited from giving legal or tax advice to customers. IRA owner needs to talk to a tax advisor who knows PT rules. PT exemptions cost money, e.g., lawyer fees, which make this an unlikely option.

The target plan will have to be amended for gust/EGTRRA /MRD provisions before it is merged into the PS plan. However the time for amending the plan for GUST/MRD may have expired. Dont recommend merging the Target plan with PS plan if the GUST amendment deadline has expired.

Dont see how it is possible since a power of attorney from H to W is revoked at H's death.

The cost of a PO box could be expensive ( $25 a mo) for some AP so why not send mail to the AP c/o of the AP's attorney with the APs written consent.

There is a separate deferral of 13k under IRC 457(b).

Short answer to this nonsense: Under the assignment of interest rule retirement income is taxed to the person who earns it not any person to whom it is assigned such as a corporation. He can transfer any income he wants to a corp after he pays tax on it.

In order for the distribution to be eligible for a rollover the UK plan would have to be a qualified plan under US law, e.g., a domestic trust established under state law. If X is a US taxpayer, the distribution would be subject to US taxation since the US-UK treaty generally provides for each country to tax its nationals and not tax the other's nationals.

I think it is agreed that the advisory fee can be treated as a expense - the problem is that Fidelity insists on coding the payment as a distribution unlike other custodians and Fidelity's custodial agreement allows Fidelity the discretion to make that distinction. Its easier to find another custodian who will not report the payment as a distribution.

HSA is the new medical savings provision in the Medicare amendment act.

But in an LP the maximum amount of an LPs liability is the LP's contribution. If the LP can be required to pay for amts in excess of the LPs contribution then the LP is a general partner.

How can a LP have any liability in excess of the LPs contribution? Also who is the liable party? Isnt the Plan trustee the owner of the LP, the same as if the trustee owned RE which was found to violate environmental laws or for which a judgement was obtained for negligence?

I dont know if an an extension to file a return can be requested after the return has been filed with the IRS. The instructions for form 4868 state that it is to be used to request an extension to file a return which implies that no return has been filed. What is permitted is to file for the extension and then file the tax return by the due date in order to gain a 4 or 6 mo extension to make the contribution.

How about a Nq deferred comp plan as a wrapper which would allow the deferral of the excess ee contribution in a NQ plan. Next year the HCE will be >95k so maybe he should reduce his salary or change the comp def to get him below the HCE threshhold. Also he is eligbile for a 3k catch up in addition to the regular contribution for 04. He should check into eligibility to contribute to an HSA. I dont think there will be any tax legislation this yr.