mbozek

Jdubya: The statute of limitations for making a claim for benefits against the plan could have expired since the s/l for bringing a claim for benefits under ERISA is the same period as would apply under equivalent state law. In some states 5 years would be beyond the s/l for a contract claim. You should also review the waiver of rights that you signed when you left employment. You may want to retain counsel to review the issues and determine the s/l but you will have to pay a retainer to the attorney.

The IR Manual on plan terminations, 7.7.2.2.6.1, states that a discontinuation of of contributions may be deemed to occur in a ps plan if the er has failed to make substantial contributions in 3 of 5 years and there is a pattern of profits earned.

My experience has been in dealing with the IRS that penalty will be abated even after being contacted by them if a response is prepared by counsel giving a reasonable explanation for the failure to file the 5500 or other tax returns. It also helps if it is a first time failure or a one time omission.

The lack of an income tax is why retirees prefer FLA and Nevada.

A: A good tax advisor can make a case for the IRA owner to persuade the custodian to accept the assets from the arbitration if the facts warrant such a conclusion and not just refer the client to the custodian.

It appears from the above discussion that from the plan's perspective there is little difference (other than incurring some legal fees) between becoming a party to the divorce through joinder (with the reservation that assets will be transferred to the spouse only under a valid QDRO) or ignoring the proceeding and waiting for the issue of a DRO. Perhaps the only reason for a plan to participate in the proceedings would be to guide the parties in drafting a valid QDRO as part of the divorce which would eliminate the need for a review by counsel after the decree is issued.

I think the client should retain a tax advisor to review the documents including the arb's decison to determine why the award was made before attempting to depsoit the funds in the IRA. There is no requirement that the custodian accept the funds for deposit in the IRA.

GB As usual you go off the track- My reference to the ALA plan was in response to your demand for an example of a 501©(18) trust. There can be variations in the type of plan provisions adopted by a trust that meets the requirements of 501©(18). If you reread my post you will see that was stated was that contributions to the ALA plan were treated as union dues - not that they are treated as union dues now. The contributions were originally deducted as union dues to avoid the inference that there was any bargaining over the contributions under the labor law which would make them a condition of employment in an employer sponsored plan.

A participant in a tax exempt 457(b) plan can only make a trustee to trustee transfer to another 457(b) plan maintained by a tax exempt organization. No rollovers are permitted to an IRA or another retirement plan. Distributions from a govt 457(b) plan can be rolled over to an IRA or other retirement plan or make a tax free transfer to another 457(b) govt plan.

See 501©18)(D). pre tax contributons are permitted- Since the contributions are made by the employees there is no collective bargaining agreement with the employer. In the ala plan the employee contributions were treated as union dues. The similarity is that benefits in both plans are funded entirely by employee contributions to a tax exempt trust.

Amalgamated Lithographers of America Local Number 1

The summary provided by the union appears to conform to the provisons of a 501©(18) trust which is entirely employee funded. Unions establish these plans when the employer refuses to pay for a pension benefit. There are only about 20 of these trusts in existance. You should review the statutory provisions for a better descripton.

I didnt see any reference to 403(b) in the materials provided by the union. Howver the type of arrangemnt described is permissible as an employee funded retirement plan under IRC 501©(18). It is a money purchase plan that provides an annuity benefit for members based upon amount contributed.

ok- how does the plan test for BRF? Unlike other features, a fund option could be discriminatory on a year by year basis because of a change in market conditions which will affect the number of participants who will be deemed elgible for a particular option, e.g. if stock market goes down assets of participants will decline making a particual option discriminatory because fewer nhces would qualify for investment. Is BRF tested on assets in year the participant become eligible or on a current yr basis? Second what about BRF where fund charges different fee structure based upon amount invested, e.g. lower fees for more assets invested? Is each fee structure a separate BRF? Third cant this BRF issue be avoided if employer allows directed brokerage accounts? Then every participant can invest in any investment that will accept his/her deposit.

Yes See prop reg 1.414(v)-1(e)(2) and (3). Teachers and hospital workers are the primary groups that can take advantage of the double catch up contribution.

GB- I employers do not adopt a welfare plan pursuant to a board resolution - welfare plan contracts are signed by corporate officers without board approval. I have not found anything in IRC provisions pertaining to welfare benefits that requires board approval to establish a group Life, health or disability plan for which the benefits are not taxed under IRC 79/104-106. I would be interested in what authorty you have found.

RR 61-146 does not require a written plan or board resolution in order for the reimbursements to be excluded from wages, since the insurance program is not maintained by the employer. The employee must provide proof that the insurance is in force and is being paid by the employee or the employer may issue a check payable to the insurer.

The plan will not be deemed terminated as along as employer A remains in business with at least one participant. A ps plan is required to make substantial and recurring contributions. Under IRS terminaton guidelines the failure to make sutstantial contributions to a ps plan for 3 out of 5 years could be grounds to deem the plan terminated if there is a pattern of profits. The partial termination occurred when the emplyees were let go by A but the only consequence is that those ee become 100% vested.

My reference is to those states that only require that applicants pass the multistate bar exam which tests 6 core subjects. Even those states that test on other subjects do not require any knowledge of tax law. I think there is an issue as to why is a professional who advises clients on the design of a retirement plan is different from other professions in which non lawyers are allowed to intrepret legal principles without engaging in the practice of law. For example, an architect must apply and interpret zoning laws, planning laws, building codes, fire codes and municipal law in the design of a building to be legally approved for construction. Yet no one regards this activity as practicing law. Why is advising on the appropriate type of a pension plan that complies with the tax law different? Secondly any person who is authorized to act as a representative under an IRS power of attorney can submit legal documents interpreting the plan provisions and the tax law to the IRS to get the plan approved.

I think I used the words inherently part of a CPAs expertise since the CPA exam does test for taxation knowledge unlike the bar exam which is devoid of income tax questions- Yet all lawyers are deemed competent to represent clients in tax matters before the IRS and in tax court if admitted in any state without regard to the LLM degree.

Every state licenses CPAs to represent clients and render opinions on the tax law because it is inherently part of an an accountant's expertise. The CPA exam has a section on tax law. Accounting firms not only prepare tax returns but represent individuals and corporations before the IRS and state tax authorities which involves the rendering of written opinions on the tax law as well as advocacy before the tax authority. Accounting firms are also authorized to practice before the SEC and render opinions on accounting matters subject to the securities law. I have reviewed many documents and materials on financial products which have tax opinions written by accountants. Accountants also prepare estate and gift tax returns under federal and state law which requires knowledge of property ownership under state law including the law of trusts. The accountant cannot draft a trust or a will or appear in a court of law on behalf of a client. However accounting firms can sponsor a prototype plan document or volume submitter plan with a trust that is approved by the IRS.

Why not amend plan to allow employees to make elective contributions after performing an hour of service.

See IRS form 2848 - A CPA can represent a taxpayer before the IRS without restrictions as well as an enrolled agent, enrolled actuary and yes, an unenrolled return preparer. This includes filing of a determination request. I am not aware that the director of practice has ever opposed the right of a CPA or other person authorized under form 2848 to file a 5300 series form on behalf of a taxpayer. In addition Federal law has expanded the rights of taxpayers to be representied by non lawyers before the IRS be allowing confidentiality and privledge in tax matters by non lawyers.

GBurns- see the Memorandum from ASPA on the legal issues. Since non laywers can appear and practice before federal agencies, e.g. a CPA can represent a client in applying for a determination letter, non lawyers can advise clients on completing qualified plan documents necessary to get an IRS determination letter.

K: I was referring to the eligibility of the PEO to sponsor the 403(b) plan. While not recommended, I have reviewed documents that contained both 403(b) and 401(a) provisions.