mbozek

Non-attorney comment looking in from the outside: seems likely that the IRS and/or bankruptcy court has dealt with the Q before. Is the plan filing 5500s with DOL and complying with other ERISA requirements? Reg 2510.3-3 states that a plan subject to ERISA does not include a plan in which no employees are participants covered under the plan as defined in subsection (d). Subsection (d)(3) states that an individual who has incurred a 1 year break in service after becoming a participant in a plan and who has not acquired a vested right to a benefit before incurring a break in service is not a participant covered under the plan until the individual completes a year of service after returning to employment with the employer. It appears that a plan that holds vested benefits for a non owner employee who has terminated employment continues to be subject to ERISA. But I cant determine (except by implication) that a plan that has paid out all benefits due non owner employees and does not have any employees participating in the plan is no longer subject to ERISA or required to file 5500s. I know that once an owner only plan is required to file a 5500 because assets exceed $250k it is required to file each future year even if assets decline below 250k. Does the plan hold benefits for non owners?

Great idea but according to OP plan withheld 20% of distribution to charity. If the distribution is paid as a bequest due to death of participant there is no withholding because payment is IRD to charity under IRC 691(a) for which there is no withholding since charity is tax exempt.

According to various news reports as much as 25% of the FB IPO were allocated to retail investors. Usually its about 10%. Many investors did not know haw many shares they were allocated until Friday.

1. If this a death distribution why isnt this a charitable bequest under IRC 2055 instead of a designated distribution subject to 20% withholding? Distributions to a charity are not eligible for a rollover. 2. If the participant directed that part of the LS distribution payable to him be paid to a charity then it is taxable as a distribution to the participant under the assignment of interest rule and is subject to 20% withholding. Participant gets a charitable income tax deduction for amount paid to charity (80%) and amount withheld may be eligible for a refund. 3. Refund of withholding will be paid to taxpayer from whom the tax was withheld. Who was the taxpayer from whom the 20% tax was withheld? 4. If this was some other type of transfer please describe.

Or to put it in the venacular, what is the loss suffered by the participant that results from plan administrator action or inaction for which a cause of action can be filed under ERISA?

How much does it cost to mail a check or make payment through pay pal? You are correct that there is no connection between the plan distribution and wire fees to you as being an adm cost of the plan administration that justifies charging participant $15 since the wire fee benefits you, not the participant. How you choose to receive your payment is a cost that you should absorb. I dont see why the plan should pay the fee because it is not a plan expense but is a cost of your doing business.

... and there are probably many reasons why the participant should not invest in that IPO. Since FB closed on 5/18 with a gain of only 23 cents above its opening price of 38 (up 0.6%), only the insiders have any gains on the stock.

Who is really the employer who controls his employment as coach, e.g., can fire him? I dont think its the AAssoc. Joe Paterno was an employee of Penn state U, which fired him. Paterno reported to the Athletic director of PSU, not the Alum assoc. I dont think the AA is his employer for the purpose of employment as coach b/c coaches are not hired as independent contractors. This kind of arrangement usually has the coach performing other duties for the AA such as meeting with the almni, attending dinners, going out to various alumni chapters to solicit donations to the U, that have nothing to do with his responsibilities of coaching the football program. AA may operate under diffierenct section of IRC than college.

Scott Simon fiduciary 360

You need to reach out to the trust/bank and get their procedures for posting funds to plan accounts. Then get them to send an email or letter to you explaining why the funds are posted to the plan's account on a date later than they are received. I am sure thay have had to answer this question before. Financial firms are very conservative in recording the the date that funds are deposited to an customer's account to prevent the fund co. being required to pay off a customer whose $ transfer were received by the fund Co. but not actually deposited in the customers fund /account until a later date. For example, a wire transfer is received by a mutual fund for investment in a client's account in XYZ fund on May 15 but the funds are recorded internally by the MF company as cash on that date. On May 16 the fund share price doubles but the funds are deposited in his account as purchasing XYZ on May 16 at the 2x price. A separate issue is that wire transfers need to be received by a certain time, e.g., 4pm est in order to be credited as received on that date. I know one financial firm that requires that Roth conversion requests must be received by 2:30 each day to be credited as a transfer for that day.

The date the wire transfer shows up on the trust statement not usually the date the funds are received by the trust. Most banks, mutual funds, etc, do not post a transfer to the client's account until the following day or even later due internal systems, operations or investment procedures. Need to check trust rules for posting deposits. If the funds were received by the custodian on the 15th the funds will show up on the records of the trust on the 16th b/c posting usually takes 24 hours. It could take more. In one fund co. IRA contributions wired on April 15th are not posted to the account until Apr 16 for investment purposes but for record purposes the funds are received on the 15h. Does the employer have documentation of the date the funds were sent?

If it is Sked C income he is self employed which makes him eligible for a self employed pension plan. See IRS pub 560 P 12. A self employed person can maintian a separate pension plan from the plan he is covered under as a W-2 employee.

Try Shcwabs website. they have a 1 page summary of the 50 state tax rules for withholding.

5310-A applies to mergers or spinoff of assets of plans. Reg. 1.414(l)-1(l) provides that in the case of a merger of a DB with a DC plan one of the plans before the merger should be converted into the other type of plan. It is my understanding that converting a DB plan to a DC plan triggers a termination of the DB plan which would permit the merger of plan assets but some else can confirm this. IRC 4980d permits the transfer of excess assets of a terminated DB plan to a replacement plan, not accrued benefits, to the extent that it comples with the contribution limits under IRC 415. I have revised my prior reponse to include this option.

Client needs to contact IRS to get copy of 1099R and find out what was reported as taxable distribution and witholding. Its possible that only the 80% paid was reported as the distibution. If 100% of account was reported as distributed then trust needs to pay the 20% withheld to participant since taxes were paid and 20% in trust belongs to participant not the plan. If 80% was reported as distributed then the plan needs to issue a revised 1099R with the correct amount of the distribution and amount withheld and send the 20% witholding to the IRS so that the taxpayer will not owe tax on the revised distribution. Of course if the particpant rolled over the 80% no taxes were paid so the participant should be able to rollover the remaining 20%. Plan wil have to contact participant to find out what happend to 80% distribution. Of course there is the possibility that the plan reported 100% as the taxable distribution, the participant rolled over 80% and paid tax on the remaining 20%. Plan would owe 20% to participant as non taxable distribution. There are other possibilities too numerous to mention including never filing a 1099R.

I dont believe accrued benefits/plan assets can be transferred on a trustee to trustee basis from a DB plan to a DC plan. Upon termination the DB plan can only distribute the present value of the participant's accrued benefit either as a lump sum or annuity and the participant can rollover the distribution to another plan, IRA or commence the annuity. Excess assets remaining upon termination of the plan after the distribution of all accrued benefts revert to plan sponor and are subject to income and excise taxes except to the extent assets are transferred to a qualified replacment plan under IRC 4980(d). Further what is the plan's right to sell, distribute or assign the RE that its holding as collateral for the loan? Need to have a RE lawyer who knows ERISA review the plan and the terms of the loan before taking any action. Needless to say this will cost $$.

Beneficiary designations are determined by the plan document. A plan document could provide for different designations for different accounts as long the rules for spousal consent are complied with. I dont understand why you believe all distributions from the plan must have pro rata basis allocations. Under IRC 402A separate accounting and recordkeeping is required for Roth account because all contributions are after tax (i.e. have basis) and earnings will be distributed tax free after the later of 5 years and age 59 1/2.

Who is designated as fiduciary under the plan to invest plan assets and make decisions on distributions? Why would any of the above be fiduciaries?

If the checks are not cashed can plan admin transfer the accrued benefits to PBGC under the provision for missing participants? Or escheat the funds to the state agency of the last known address of participant assuming the state agency will accept the funds? Could employer check SS death register to determine if participant is dead? This is not the first time a plan has terminated with undistributable benefits. What if plan sends check to participant who is on a 1 year around the world cruise?

Has there been a distribution of all plan assets under the IRC rules to terminate the plan under the IRC? IRS requires that all assets must be distributed from the plan within an administratively feasible period for which 1 year is a safe harbor. If checks remain uncashed after a year has plan terminated?

As I undertand it the FBook IPO is limited to institutional investors who are favored clients of the underwriting firms. Very few shares will be available for brokers whose clients are accredited investors. Its business not regulatory issues preventing plan participants from buying into the IPO.

While a 457b plan is unfunded because its assets are subject to the claims of the employer's creditors and are not kept in a trust, the benefits must be limited to select group of management or highly compensated employees. If rank and file employees participate then the assets must be held in taxable trust and are subject to the rules for ERISA plans which would result in the taxation of contribuitions to the participants.

If you are the designated payee and these payments are amounts that are due you as designated payee under the QMCSO then you can cash them. But you need to make sure that you are entitled to receive the payments and they are not to be made to a state agency. You may also be required to keep the funds segregated from your personal accounts and keep a record of all payments made to providers. You need to have an attorney review the QMSCO to make sure that you are in compliance with all of its conditions.

This may be the only cliam she has since the s/l for employment discrimination expired long ago. Question was the participant a partner? I would be interested in what happens.

Yes but what do you do when SSA sends a notice to a particiant who was reported in 1991. You take over as TPA in 1998 and there is no record of this participant on any takeover reports and you didn't get 7 years worth of 5500s and SSAs to see they had been reported but not been removed. The client terminates the plan in 2002, disolves the partnership and pays everyone out. Former TPA pre-1998 no longer exists. SSA notifies they particicant that they have deferred vested benefit in 2012. Both the ex-participant and ex-client are attorneys. Who is responsible for keeping the records 10 years after plan termination? At the time of termination the plan is required to pay out all accrued benefits. In many cases some benefits cannot be paid such as missing participants for whom there is no address or for whom the plan does not have a SS #. In this case the plan pays out all benefits to participants that the plan can locate and liquidates. ( DB plans transfer the benefits of missing participants to the PBGC) I dont know what liability there would be if a participant trys to claim benefits in 2012 since the s/l for a breach of fiduciary duty would go only back 6 years and no plan existed in 2006. I have never heard of a plan participant filing a claim for benefits against the plan admin of a plan that has terminated and paid out all benefits.