mbozek

First step is to ignore the insurance co bumblers who are a distraction to your getting paid because they are powerless to effectuate payment. The plan administrator can order the insurer to make payments or pay your directly. As I stated in my prior post you need to take your case to the administrator of the health care plan by filing a claim for the payments due from the insurance co and force the administrator to either approve or deny your claim for the payments. Under ERISA the plan administrator must issue a decision in no more 90/180 days after the claim is received. If your claim is denied the plan admin must state the reasons in writing based on plan provisions which can form the basis for a law suit under ERISA. Whether your ex is an ERISA lawyer dosent matter. Under ERISA the plan fiduciary is personally liable for making sure that you get your payments approved under the QMCSO. You need to get an attorney to represent you. Until then the plan and insurer will give you the run around hoping that you will give up and go away. Years ago an employee contacted me about violations under employment discrimination laws but declined my offer of representation. Instead the employee attempted to resolve the claim by contacting HR which ignored the employee. Finally the employee consented to my representation. The employer's attorney returned my inquiry regarding the employee's claim within 24 hours and the claims were settled satisfactorily after extensive negotiations.

I have a stupid question: How does the insurer intend to comply with the QMCSO if payments are not made to alternate payee/recipient? On Mar 13 you wrote that your ex is holding the reimbursement checks. Is the insurer sending the checks to him? The insurance co cannot obstruct the QMCSO to prevent the payments being delivered to the proper party. ERISA 609(a)(6) provides that if a fiduciary acts in accordance with the fiduciary provisions of ERISA in treating a QMCSO as being a qualified medical medical support order, then the plan's obligation to the participant and alternate payee shall be discharged to the extent of any payment made pursuant to such act of the fiduciary. In otherwords the employer's fiduciary for the health plan (not the insurer) is personally liable for payment due to the alternate payee if the insurer does not comply with the QMCSO to make payments to the alternate recilpient. While the insurer is correct in saying that it does not have to comply with the QMCSO such action makes the health plan fiduciary of the employer personally liable for the payments which have not be made. I suggest that you make the state agency which issued the QMSCO aware of this situation. Or retain your own lawyer to file a claim with the plan for the QMCSO payments under section 503 of ERISA. The plan fiduciary will have to either approve payment or provide a reason in writing within 90 days of why payment cannot be made. The denial will have to based on the terms of the plan and under ERISA 609(a)(6) the insurer's refusal to make payment to the alternate recipient because it does not provide such an option is not a valid reason for denial of payment.

Why 7/1/12 instead of 1/1/09 effective date of the IRS regs?

How has plan complied with RR 80-155 if LP has not been valued at least once a year? Are you stating that the ending capital account is the appraised value fo the LP?

Authority to require annual valuation of assets in DC plan: Rev. rul 80-155 IRM 4.72.8 Valuation of assets Where there is dispute is the question of how often non publically traded assets must be appraised by an independent appraiser (See Rev. rul 59-60) to determine FMV. Some valuation experts claim that an appraisal of odd assets by an independent appraiser is only required every 3 years. Reason that IRS request for recent appraisals is a surprise is that until recently IRS did not ask for current valuations of non traditional assets in audits. Recent activity by plan participants to convert plan assets to Roth accounts has highlighted undervaluing of assets in qual plans and IRAs so now IRS asks for current valuations in routine audits.

client has two choices: 1. ask the agent what is the IRS authority for valuing the LP 2. having the LP appraised. Maybe the LP can provide a recent valuation.

My understanding is that IRS requires retirement assets which are not publically traded to be appraised every three years. I always remind clients who want to invest in non traditional assets, e.g, RE, promissory notes, LPs, etc of this rule, because it is their duty to get an appraisal, not the duty of the custodian. Some IRA custodians will not accept odd assets which are not publically traded because of this requirement while others require the IRA owner to pay for an appraiser hired by the custodian.

Under IRC 7503 the date for filing all forms with the IRS is automatically extended until 4/17 b/c 4/16 is a legal holiday in DC.

If the entire balance of the IRA is distributed to the estate by 12/31 the MRD distribution will be satisfied. IRA funds will be taxable income to the estate. However, Estate will deduct the distribution of the IRA funds to the charities which will 0 out the income received by the estate. Estate needs to consult with tax advisor on how to avoid taxation on the IRA funds.

A partner receives a K-1 in which the firms contribution to a retirement plan for the partner is entered in box 13 code R and is deducted on line 32 of the partner's 1040. Net earnings from self employment is entered in Box 14 code A. Partner's deductible contributions to a retirement plan are subject to IRC 401© and IRC 404(a)(8) limits of no more than 25% of net earnings from self employment after reduction for retirement plan contribution in the case of a DC plan. A shareholder in an S corp receives a w-2 showing wages for services. Contributions to a pension plan for the shareholder are deducted by the S-Corp. from its inccome on the corporate tax return subject to the limits of IRC 404(a). Shareholder does not deduct pension contributions on the 1040. Are the pension contributions/deductions claimed on line 32 of the 1040?

General rule is that if the IRA owner dies before taking an MRD then the bene designated under the IRA must receive the MRD by 12/31 of year of death. Did the IRA owner designate his estate as the bene of his IRA and then the estate will distribute the IRA funds to charities named in his will?

10% penalty does not apply if made to an employee after separation from service after attaining age 55. As long as employee attains age 55 by end of the year separation occurs the penalty will not apply.

Recline46: Maybe I have been lucky but the last few years I have had more and more people tell me your same comment. But I have never had to do that either. I just write a letter to the person on behalf of our clients saying our records show they are not due a benefit. I have never had anyone come back and demand proof I am right. Even if they did why do you have to produce much? The document controls this and I have never read that I have to prove to someone they are not a part under the plan. Like I said I might have been lucky and no one has called my bluff so far so good. A participant who receives a letter stating that the plan has no record of a benefit due can demand that the plan administer provide proof that the benefits were paid since under ERISA the plan retains payment records such as a 1099-R. A demand for proof of payment results in one of two outcomes- the plan admin spends a lot of time combing through old records to find some proof of payment such as a 1099-R or cancelled check or the participant receives payment of benefits. Plan cannot deny a claim for benefits listed as accrued on an 8955-SSA if it has no record that benefits were paid since there is no statute of limitations on requesting payment of benefits and plan admin has fiduciary duty to maintain plan records. These disputes can be avoided by noting payment of benefits deferred in prior years on the 8955 filed for the year benefits are paid.

You need to determine who is the designated beneficiary under the LI policy who can file claim for benefits. In some plans the participant could designate the beneficiary. There are plans that allow the participant to name a trust as beneficiary in an attempt to avoid estate tax on the LI policy.

I, respectfully, disagree. The terms are still written within the contract; the same as it has always been prior to the new rules. A church plan enjoys many exceptions that other plans do not. They may cover "ONLY" the pastor if they choose. They "may" cover other employees while giving non-elective contributions to "ONLY" the pastor. That precendent has been long established. I wouldn't begin to suggest that it's better to have something that is not required. To do so is to inject an arbitrary standard that really isn't necessary for church plans. I respect your opinion, but just disagree with it. NOW, if it were a 403(b)(9), then the situation would be entirely different. Good Luck! Contracts do not define the terms that govern the relationship between the employer and employee that determine the how and when. The reason for having a written document of some kind is so that all parties know what the rules are for making contributions and other terms that affect the participant- such as when the contributions will be made, what will be the max amount, whether contributions be discretionary, what happens if less than a full years service is completed, whether loans will be permitted, salary reduction, etc, in order to remove ambiguities which usually arise if there is no written document. Assuming that all of the important terms that apply to the obligations of the parties is contained in an insurance contract is prescription for disaster. Document does not have to complicated and can be limited to a few paragraphs. Putting the material terms in writing will avoid misunderstandings later on.

prevent plan from being DQed on account of excessive employer contributions since salary reductions are voluntary employee contributions Revenue gains from taxing refund of excess is higher at individual tax rates because all excess contributions will be taxed whereas many plan sponsors do not pay taxes (S corp, P ship, non profit) on contributions or are taxed at lower rate than individuals.

So, essentially, we can do whatever we want? Not exactly. While a written plan document stating the plan terms is not required, the plan mus still conform to the IRS regs which is a reason to have a written document that incorporates basic terms of the agreement so that the employer and employee are aware of the rules that apply.

Just how many non owner employees ever receive a benefit from DB plans given that the average tenure of employees is less than 5 years which is the usual requrement for vesting. In any event, discounting the future value of the benefit reduces the present value available for a rollover to a few hundred dollars. Problem with DB plan is maintaining sufficent funding levels to pay benefits on a long term basis given the volatility of investment returns and market crashes ever 5 or so years.

I always thought that the benefits in a NQDC plan were at risk of being seized by creditors which is different from the IRS priority to collect taxes on wages paid. IRC 3121(v)(2) provides that payments are taxed when there is no substantial risk of forfeiture of the rights to the deferred amount. If there was no risk of forfeiture when P retired then the FICA tax is due. Under IRC 3202(b)(2) an employer required to deduct the FICA tax shall be liable for payment of such tax and shall not be liable to any person for payment of such tax.

No matter when the plan is terminated, plan assets must be liquid. Thank you for your responses. We plan on selling the real-estate. Nothing could happen until then. I guess it comes down to whether the tax benefits outweigh the expenses. Between the DOJ audit we just went through and the ongoing administrative fees, I'm inclined to want to get out of it at any cost. With a loan at least I'd know up-front what the costs will be. The way it is, with PBGC premiums escalating every year, annual filings, regulation changes requiring plan restatements, etc. etc. I may as well have given our plan administrators a blank check. Our CPA at the time talked us into a DB, and it was to biggest mistake we ever made. Zippy: Someone should post your last sentence on all of the blogs and web sites that are posting articles by air head accademics and investment managers on how governments should encourage creation of DB plans for employers including wacko proposals for states to operate DB plans for private employers (CA anyone?)

See IRS pub 590 P 11 -15 for eligibility for deductible IRA contributions based on participation in a qualified plan during tax year.

Unlike 401k plan elective deferrals, there is no requirement that employee 403b contributions be voluntary. At many colleges the 403b plan provides for mandatory employee contributions as a condition of employment or as part of the CB agreement with the union which are matched by the employer. Compare reg 1.401(k)-1(a)(2)- CODA is an arrangement under which an eligible employee may make a CODA election with reg. 1.403(b)-3(a) which lists 9 requirements for elective deferrals but omits any requirement that employee must have discretion to make election.

I was not clear on the $5K; that's what the divorce atty. wants as a deposit/retainer. Bringing in a CPA would be EXTRA. Reflecting on the "reason" for the atty's. need for a CPA: My question(s) were about the "tax free rollover" you mention above and the need for the dreaded MRD that will be necessary this year. OR, the double MRD before April 2013. Thanks, I now understand the process. Assuming the wife will agree to an equitable settlement, I (we) should be able to avoid considerable legal expense. The atty. said a "smooth" divorce would cost me about $2.5K of the $5K retainer. If it gets nasty, he said it can go as high as $20K. That bites! Thank you for your comments! This puts so many things into perspective for me in so many ways. no reason to bring in CPA to determine how MRD rules work. Any MRD you need to take for 2012 will be based on the value of the retirement benefits in your accounts as of 12/31/11. You can take a distribution by 12/31/12 to avoid double payment in 13. Your wife's IRA assets will be excluded from your MRD until the year after amounts are transferred to your IRA. Of course, each of you could keep your own retirement assets. See IRS Publication 590, P31, available online at irs.gov. for MRD rules.

There is no reason to spend 5k on a CPA because funds rolled over to an IRA will be included as part of the marital estate to be divided in divorce. I dont know why a lawyer would recommend retaining a CPA when the IRA assets will be listed as your wife's marital property submitted to the court. IRA assets can be rolled over tax free to former spouse without incurring the cost of a QDRO if divorce decree orders transfer.

It seems to me that JPOD has the correct approach. The answer depends on whether the student's wages are excluded from FICA during the summer. If the wages are FICA exempt then the student is not eligible to participate in the plan.