mbozek

IRC 72(t)(2)(A)(iv).

NO. ERISA protects all employees regardless of age. Also IRC/ERISA prohibits a reduction of allocations to an employee's account on account of attainment of age. What I am asking is why would any plan want to prevent deferrals by younger employees since it would discourage younger employees from continuing with the employer and separately violate the federal age discrimination law (ADEA) because it has a "disparate impact" on employees between 40 and 50 who are protected by the ADEA as well as employees over 50.

What does the ct order appointing the ex as the guardian of the child provide regarding what property is to considered to be the estate of the child? Does it state that all property of the child is to be paid to the guardian for the benefit of the child? As to paying the ex as trustee of a trust established f/b/o of the child you need to consult counsel to determine if this is permitted under TX law. The Ex has a legitimate concern as trustee to have payments made in the most cost efficient manner to reduce the expenses. The plan admin has the fiduciary duty to determine that the payments due the child are being paid in accordance with the Ct order and the plan. If necessary the plan admin could ask for an opinon of counsel representing the ex in his capacity as trustee that payments to the testamentary trust are permitted under TX law and the court order and get a waiver of liability and hold harmless agreement from the ex.

IRC 411(b)(2) provides "A defined contribution plan satisfies the requirements of this paragraph if, under the plan, allocations to an employee's account are not ceased, and the rate at which amounts are allocated to the employee's account is not reduced, because of the attainment of any age. "

So what do those claims have to do with his retirement benefits which he could have transferred at any time after termination? How has he been kept in the dark on his retirement benefits? Was he getting statements on his retiremnt plan accounts?

What does your TPA agreement provide as to how you discharge your responsibilities? It should state that the TPA firm is not a fiduciary of the plan and that you will rely on the instructions of the plan fiduciary in carryng out your responsibilities which are presumed to be in accordance with applicalbe laws.

I dont know whether it will cure the violation b/c the failure to provide non discriminatory LI for the non owners in prior years may be a listed transaction which triggers the extreme tax penalities b/c the requisite notice of the listed transaction was not provided to the IRS. You need to check with a tax advisor or attorney who is familiar with 412i violations.

60 days is all you get unless you have a good reason. See Pub 590 P 23-4 for waivers of 60 day limit.

I dont know the answer to the question you presented but you should check to see if Congress ever removed the 200k excise tax penalty on advisors who were involved in 412i plans that were deemed to be listed transactions. If this penalty is still possible you may want to reconsider representing the client. My own conservative view is that the client needs expert tax counsel to advise them on how to proceed and the attorney would then retain advisors such as actuaries who would be protected by attorney client privledge. Question is this 412i plan a listed transaction?

I dont know what actionable injury or loss could have result from the failure to provide a timely notice b/c 1) no distribution occured and 2) the only change in the notice is to make the participant aware of the consequences of not rolling over the distribution which is described in other materials that the particpant will recieve such as 402(f) notice.

What the IRS is in own inscrutible and incomprehensible way is trying to describe (without explaining how the change applies) is Section 1102(b)(1) of the PPA which directs the IRS to modify the regs under IRC 411(a)(11) and ERISA 205 (should be 203) to provide that beginning 2007 the description of a participant's right to defer receipt of a distribution must also describe the consequences of failing to defer receipt of the distribution. Appearently a plan will not be treated as failing to meet the notice and consent requirements as to any description of the consequences that is issued up to 90 days after the regulations are modifed if the plan administrator makes a reasonable attempt to comply with the requirements of 1102(b)(1). I have no idea of what the penalty is for failure to provide the notice.

it would be helpful if you could provide a link to the IRS notice that you cited.

what is his claim for? Did he continue to receive quarterly statements stating his balance in the plan and have acces to an SPD?

1. The insurance company settled after a lawsuit alleging the insurance company's misrepresentation and failure to disclose material information in marketing and selling certain insurance policies for use in funding specific arrangements the IRS later deemed abusive tax shelters. 2. The policy was actually converted to an annuity and then rolled over to an IRA. What claim is the settlement supposed to satisfy? A payment to make the policyholder/plan whole for misrepresentations sounds like payment for damages (tort) for selling an investment product that was not suitable, not restitution of assets that were misappropriated by the insurance co. Does the settlement agreement make references to the proceeds constituting a return of assets that were invested in an imprudent investment?

Here is the link. http://www.irs.gov/pub/irs-tege/qab_102411.pdf I agree with the comments on the limited benefits for filing Form 5310 with a pre-approved document. The only ones we have filed in the last few years have been in acquisition situtations where the purchaser insisted it be filed. So a plan sponsor whose p type plan was amended under IRS requirements in 2011 would only need to keep the prior DL issued to the P type sponsor in the prior cycle (2005, 6 or when ever)?

So what IRC section allows the deduction?

I dont know what is gained by getting a DL for the termination of non ERISA p -type DC plan where all amendments are provided by vendor after approval by IRS, account balance was distributed within 1 year of termination and final 5500 was filed. Plan sponsor must keep all records/ documents/DLs/Amendments, etc for the plan forever in case the employer is audited.

IRC 404(o)(5) added by PPA contains a similar provision for DB deduction limits for plans subejct to ERISA 4041 that terminate during the plan year which allows deduction of all payments made to make the plan sufficient for all benefit liabilities under 4041(d). Maybe Congress intended to limit deductions for benefit liabilities upon termination to ERISA covered pans.

Insurable interest does not prevent strangers for aquiring the insurance policy after it is issued. NY Court of Appeals held about a year ago that after an insured purchases a policy it can be assigned to anyone selected by the insured regardless of whether the new owner has insurable interest.

You need to consult a tax advisor as the IRS frowns on this type of arrangement where employee continues to perform same services as inde contractor after termination. Need to google something called IRS 20 factors test (Section 530?) to see if this situation is a problem.

IRS pub 901, tax treaties, does not list a treaty with Brazil as of Apr 2010. Check to see if there is a later edition. One possible way to recoup tax is if UBIT is imposed.

To the extent that the employer as opposed to the employee owner makes contributions to the plan, the answer is yes. For example, if an S corp with 250k of earnings makes a 50k contribution to the owner's account in a PS plan there will be a savings of $1450 (.029% x 50k) because no medicare tax is paid. But there is no savings to the extent the owner contributes to the plan. If the S corp has 100k in earnings and the owner contributes 22k by salary reduction and 20k in employer contributions the savings diminshes to $580 (.029% of 20k). There are hidden costs in the S corp which will diminish the savings such as paying an accountant to prepare the S Corp tax returns.

There are tradeoffs in different types of business entities which provide different benefits. While the SE person pays SS taxes on pension contributions as wages subject to SS tax, the SE owner will recieve additional SS benefits if the total SE income does not exceed the FICA max of 110k. For example, if the owner of an S corp that has earnings of 100k, makes a 25% contribution to a PS plan of 20k, the 20k reduces the W-2 wages paid to the owner to 80k. A SE owner with earnings of 100k would have net earnings of $92.35k for pensions and a pension contribution of $18,470 (25% of $73,880) for which the owner will pay $2290 in additional SECA 6.2% tax. However the SE owner will have additional SS wages which will increase his SS benefit. Of course whether this is good depends on your view of whether SS benefits will be reduced in the future. I thought that congress waived the SECA tax on SE employees contributons to their pension plans in 2010.

I thought that distibutions from Roth accounts in Q plans must commence at 70 1/2 but participant can rollover Roth distribution to a Roth IRA to avoid MRD after 2012. If there is a balance in Roth at end of 2011 then there must be MRD from Roth in 2012.

1. Was this payout automatic based on a prior election? Was benefit paid in accordance with terms of plan? If answer is yes then employee is taxed because funds were received. 2. If the employer is a NP the only option to avoid tax is to transfer funds to another NP 457b plan. Otherwise it is a taxable distribution b/c rollover to an IRA is not available. If 457b is sponsored by a government then funds can be rolled over to an IRA or employer plan.