mbozek

I dont understand your Q. I-9 is required to be completed within 3 days after employee starts work. Many employers require I-9 to be completed before employee reports for first day to make sure that employee will not be terminated for failure to provide documentation. Employee is required to provide original documentation such as birth cert., driver's licenses, passport, SS card, etc when turning in I-9. Health ins coverage is usually made available on the first day of employment and employees have 30 days to enroll. Since employee must provide original documentation to complete I-9 when employee starts work why does admin need to provide I -9 in enrollment materials? Secondly, how would admin verify the documents needed to approve I-9 application?

True -- but only if you know for certain that he will have more than $16,500 in earned income after all of the adjustments and deductions. Self employed persons can make year end election to contribute maximum amount permited by law/IRS regulations which cannot be calculated until self employment income is determined.

Need more info. Is the prior plan a 403b or another type of plan such as a 457 or a qualified plan? If so what happened to plan after the sale? Was it terminated? Disposition of assets in a retirement plan is governed by plan documents. Was there any mention of assets in old plan in the contract of sale? What does counsel for the c3 say about this Q?

The rule on distribution of annuity contracts is found in Rev. rul 2011-7.

No b/c that individual did not perform the services for the employer. To prevent the filing of a form 8955 under the name of the individual whose identity was stolen, the plan should withhold reporting vested deferred benefits to the IRS until the true identity/ tax ID of the imposter is determined. Otherwise the plan may wind up paying twice for the same benefits if the individual whose identity is stolen receives a notice of vested benefits from SS.

The name will be a fake b/c the employee buys a false ID which includes the name and SS# of another individual. If the name and social are different there would be inquiries.

This is what happens when accountants get involved in plan administration. Reg 1.403b-10(a) provides that a plan is terminated when the benefits are distributed. In a group annuity contract benefits are distributed when the employees receive certificates of insurability under the contract b/c there is no other way to distribute benefits under the contract. There are no tax consequences to the employee for delivery of the certificate. When all covered employees recieve a certificate of insurability the plan will be terminated.

Employee is only entitled to receive benefit if employer has correct ID and SSN. Employee who uses fake SS has created fake ID which must be corrected with correct ID and SSN no. before benefits can be paid. Employer cannot pay benefits using fake ID/ssn. Funds remain in plan until proper ID and SSN or Tax ID are provided.

What is the plan protecting itself against? Spouse was not a party to the loan. Plan did not know of fraudlent signature. Spouse's rights are derived from participant. If participant is paying off the loan I dont see any possible claim by spouse. Loan is still valid since participant signed note and must continue payments. According to the Senate Finance committee report on REA, if a plan administrator receives a notarized spousal consent valid on its face which the plan administrator has no reason to believe is invalid, the plan would certainly be allowed to rely on the consent, even if it is in fact, invalid. These comments are limited to spousal consent Q only.

There are services that will track down beneficiaries for a fee. If you know where the participant died you should be able to get a death certificate listing next of kin. What does the plan provide in the case of a missing participant who cannot be located? Is the benefit forfeited? Used to pay plan expenses? Some states will not accept funds from an ERISA plan as abandoned property because of preemption issues. From the number of recent inquiries on this topic it is amazing that solutions for this contingency are not provided for when the plan is terminated. Plan termination resolution should have provision allowing Plan admin to dispose of missing participants' benefits in manner permitted under applicable law if no beneficaries can be located after reasonable search or used to defray termination expenses.

Only pre tax amounts can be rolled over from an IRA to a Q plan. Under existing rules all pre tax amounts are deemed to be rolled over from the IRA if the amount left in the IRA is equal to the AT contributions (Pub 590 P. 23).

The ex's attorney has contacted your husband's attorney b/c he knows that the time for getting a QDRO approved has expired. The plan may decline to approve the DRO at this point because benefits have commenced. If the ex spouse did not have a QDRO approved by the plan admin before the participant began receiving benefits it will be very difficult for the ex to get spousal benefits b/c the federal courts determine eligibility for benefits based on the date of retirement. If you are married on that day and there is no QDRO approved by plan admin it is highly unlikely that the ex would prevail expecially where the ex spouse delayed accepting the QDRO before your husband retired. Also the plan would not accept the ex as spouse as spousal beneficiary b/c at the time benefits commenced it determined its payment to the participant based on your life expectancy. Substituting the ex could require that the plan pay a higher level of beneft is than it expected to pay because of the different life expectancy of the ex whic h is not permitted. The ex's claim for benefits could also be barred under the doctrince of latches - her unreseaonable delay in asserting the claim coupled with detriment to the participant due to change in benefits to be paid. Your husband needs to discuss his options with his attorney as there are many other issues that need to be addressed such as whether the ex would be entitled to 50% of his pension benefits even if she is not eligible for survivor benefits.

Do you want to find a mutual fund co that would offer a 403b custodial account for one person? Is this a single employee plan or is this a plan where 1 participant wants to have an advisor invest the funds. Is the plan subject to ERISA? how much will be invested? Have you tried discount brokers such as Schwab or TD America?

You could pay some service to locate a relative who could be a beneficiary. Or forfeit the benefit b/c of the failure to locate the beneficiary. Finally you could find a local offical such as a county administrator who would take custody of assets that are the property of residents who die intestate.

What value is being added by having the plan level advisor plug in information that can be completed by the participant and why should he be compensated? How is the advisor helping participants invest their plan accounts if the investment advice is computer generated? Is he going to tell them what funds have the lowest fees?

I dont understand your Q. For plan years from 2002-2008 only Q 1-5 and 8 were to be completed by a 403b plan. See instructions to 2008 5500 P 10. No other questions were answered or schedules submitted. The 2008 5500 is available in paper form and can be altered to indicate use for a prior year. As I recollect the DOL allowed delinquent form 5500 filers to submit all prior years forms at once and pay a max fine of $1500. I dont know if this is still true. I dont see how you can submit the 2010 5500 form for years prior to 2009 since the 403b plan was not required to complete the entire form and the plan is not going to have the information needed. It would be better to have the plan admin complete the 2002-08 forms on paper (since only Q1-5 and 8 are answered) and send them to the DOL along with a completed 2009 form and a check for the appropriate amount.

The language about plan having an annuity option is taken from the IRS regs. There is no futher explaination. However it is highly unlikely that an annuity can be purchased with only $2,000. It would be cheaper to offer the participant a bonus payment to take his distribution than to continue maintaining the plan for several years and pay the admin costs.

Purpose of E & O insurance is to pay employer if employee embezzles money or causes loss of plan assets due to negligence, not reimburse employer for failure to comply with tax rules. Otherwise plan sponsors would have no incentive to make sure that plan complies with all reporting and disclosure requirements and non discrimination rules b/c insurer would for pay the cost of non compliance. Why would an insurer guarantee an employer's compliance with tax laws?

This is no different that the decision of the plan admin not to commence a suit to recover excess payments b/c the plan participant is dead or the person who received the funds has declared bankruptcy or no longer has possession of the funds so a lawsuit would not recover the payments. Its a prudent business decision not to bring a suit if the plan does not have surplus assets needed to pay for the cost of recovering the amount caused by the breach of fiduciary duty. Also there is no guarantee of an adequate recovery even with the best of facts.

Why not an involuntary rollover to to an IRA if you can find an IRA provider that will take such a small amount. Or use reg. 1.411(d)-4 Q-2(b)(vi) to amend the plan to provide for involuntary distribution upon termination of a PS plan that does not have an annuity option. If he doesnt cash the check he will still be taxed b/c he has actual receipt of the fundswhich will encourge him to cash the distribution. Last option- offer him a bonus if he cashes the distribution check. Q why wasnt this contingency thought of before plan was terminated?

I dont think this is possible b/c of changes made in 2001 to require that distributions to employees be made under MRD rules. Under prior law distributions to participants had to be paid over no more than 15 years in a level amount. Also the 2003 changes to the 457 regs required amendments to most plans.

AK supreme ct held that employee was not liable to spouse for drop in value of spouse's interest in 401k plan after spouse's share valued at 319k was segregated in separate account in 401k plan in 2007 pursuant to a property settlement agreement. After divorce AP disputed value of her share of employee's account. When spouse collected funds in 2009 value had declined by 116K and she asked trial court to order ex to make up the loss. Judge ruled in her favor but appeals ct reversed b/c after account was segregated, ex husband had no control over its value. Drop in value was due to AP failure to collect payment. This case is a good reason why the AP's interest in a DC plan should be segregated as a separate interest as soon as DRO is recieved. http://arkansasnews.com/2011/09/15/court-m...-drop-in-value/

reg. 1.457-9(b) states that a tax exempt 457b plan ceases to be an eligible plan on the first day it fails to meet any of the requirements of regs 1.457-3 to 8 or 10. Reg. 1.457-11 states that an individual is taxed on the deferred amounts in an ineligible plan in the first year when the deferred amounts are not subject to a substantial risk of forfieture. Since the benefits in the 457b plan are 100% vested its seems they are taxed on the day the plan ceases to be an eligible plan. From the participant's point of view there is income tax exposure for the last 3 years.

Marital assets subect to divison in divorce exclude property acquired before the marriage and by gift or inheritance during the marriage. If the DB benefit was accrued before the marriage its not a marital asset. As for the inclusion of increase in value of DC benefits and IRA after date of marriage in marital estate you need to check state law to see whether earnings on assets acquired before the marriage are excluded from property subject to division in divorce. Parties can always agree to transfer assets that are not included in marital estate in property settlement.

General rule: the business is part of the deceased owner's estate and its operation/disposition is the responsibility of the executor. Plan is operated by the business. Plan should have provision for sucessor sponsor of the plan/adoption by sucessor to take control of plan including termination. In many cases the executor of the estate will terminate the plan/ sell or wind down the business. You need to work closely with the tax advisor to the estate b/c expenses of the business after death of owner become expense of the estate which is a separate taxpayer. Have you contacted the executor or counsel for the estate?