mbozek

Dispite the Obama administration's announcement that it will not defend DOMA in court DOMA is still enforced under federal laws, including the tax law, social security and immigration laws to limit benefit eligibility only to spouses of the opposite sex regardless of whether the same sex partners are legally married under the laws of 6 states- NY,MA,VT,NH, CT, IA and DC. All that has transpired is that the federal government will not defend DOMA in courts where a federal employee who is legally married in a state that allows same sex couples to marry claims benefits rights for the same sex spouse. My understanding is that DOMA will still be enforced against a federal employee whose relationship is recognized under state law as a civil union or domestic partnership such as NJ. The interesting Q is what if a federal employee who lives in NJ is married to a partner in NY. Will NJ recognize the marriage? Also employers are free to ignore DOMA. Many large corps provide health benefits to same sex partners and some provide pension benefits although the benefits are taxed to the employee.

Yes See Pub 571 p8 under 15 year rule.

Doesn't the IRS have a minimum number of letters that need to be sent? Like 50? Or 75? Plus, you never know if the letter got to the intended person or not. You are not appraised to undeliverable pieces. Not are you appraised of what address they have for the people. I thought it was free if there were a minimum # of requests. As for not knowing if pieces are undeliverdable or got there, who cares. If participant is 69 and doesnt reply its because he/ she is dead or has changed identity and doesnt want to be found. Since 75% of SS retirees commence benefits at 62 and are notified of existance of benefits held at a Qualified plan at thattime its not likely that employee will contact employer at 69 to collect benefits so plan should forfeit benefits before MRD is required at 70 1/2.

I would say no because the only fees for individual services i have seen are those resulting from an additional service requested by the pareticipant such as a QDRO, or plan loan or the cost of wiring a distribution when a check is available. Q Why not use a free locator service such as the IRS or forfeit benefits if the participant does not reply to an IRS letter? One thing to remember- when a partaicipant applies for SS benefits SS notifies that person of any amounts held in a qualified plan. If the plan forfeits benefits at 70 1/2 if the participant cannot be found it is highly unlikely that the participant will be alive to collect it.

I cannot understand why employers insist on putting themselves in harms way by inserting crazy provisions that are not allowed. Universal availability does not allow exclusion of participation for not making a contribution of a specific % of pay- only if the amount is less than $200 a year. Excluding employees from the plan is impossible to comply with other than exclusion of students who are exempt from FICA tax so plans should allow participation by all other employees but only match contributions that exceed a specific % of pay. Any other exclusions from the plan will result in an expensive audit. The only way a plan with a minimum % contribution requirement would comply with the 403b regs is if the employer maintained anothe r403b plan that allowed contributions by all employees as long as they are at least $200 a year.

The terms of the bonus as defined by the employer dont matter. Only the plan terms matter. Employee contributions are 100% vested. Under the non alienaition rule forfeiture of employee contributions are not permitted. Its not a mistake of fact if employer made a correct contribution authorized by the employee's election.

Uber: Qdros were created two years earlier as part of the Retirement Equity Act of 1984.The Tax Reform Act of 1986 amended some of the tax provisions for QDROs. The legislative history of REA does not authorize a plan administrator to suspend benefits before a DRO is received by the plan administrator. Also the DOL publication on QDROs published in 1997 does not mention either of the two cites in your post even though other legislative history from the 1986 tax reform act is referenced. The prevailing precedent to allow suspension of benefit payment in advance of a QDRO is Shoonmaker v. Amoco 987 F2 410, where the court allowed a plan to place a hold on trading in a participant's 401k plan account when notified of the divorce decree approved by a court even though the plan's QDRO procedure only permitted the plan to place a hold on the account after a DRO was received by the plan. As far as ERISA is concerned, a plans Qdro procedure could limit holds on a participants benefit only after a DRO is received. There is no need to restrict distributions upon notice of a divorce decree because the participant is subject to a state court order to freeze the benefit after it is in the possession of the participant. In any event the amount subject to restriction in the Qdro procedure cannot exceed the amount payable to the Alternate payee.

Maybe they swapped other assets to equalize the 46k tax bill. Or he kept more capital assets.

I'm a little confused by who's who. In this sentence, "spouse" is the ex-spouse and not the IRA holder, right? And since the transfer is not a distribution to the IRA holder, the IRA holder still has an RMD/MRD due for 2011, based on the 12/31/2010 balance, yes? or am I more confused that I thought? The ex spouse who receives $1.1M transferred to an IRA as a result of the divorce will not have an MRD in 2011 because there was no value in the IRA as of 12/31/10. The spouse who had and IRA with a $2M value on 12/31/10 will have to take an MRD based on $2M in 2011.

Reg 1.408-4(g) provides that any amount transferred to the ex- spouse on account of divorce shall not be considered a distribution to the IRA owner or spouse and the interest transferred to the spouse shall be considered the spouse's IRA. Therefore the spouse will not have to take an MRD for 2011 but will have an MRD for 2012 based on the IRA value as of 12/31/11. The 2012 Rmd of the spouse /IRA owner after transfer of 1/2 of the IRA to the ex spouse will be based on the reduced value of the IRA on 12/31/11.

Under the contract RAs have no cash value. Only a one time option when annuity benefits commence annuity owner can elect a single sum payment of 10% of account balance which can be rolled to an IRA. 100% lump sum is only available as a death benefit if death occurs before benefits are annuitized. As yogi says you can look it up on the T/C website.

Even worse, there is no cash value in an RA contract. Only benefit is an annuity in various forms.

1.Was the check paid to the GF as attorney in fact for participant? Participant can also assign payment to another party if POA allows.Tell the spouse the benefit was paid in 2004 and there are no benefits payable at this time. Spouse has no right to know how benefits were authorized or to see distribution authorization because spouse has no rights under plan. 2. Did the POA authorize the agent to request a withdrawal of of pension benefits? If yes then no problem. If no see #3 and 4. 3. What is statute of limitations in state where spouse lives for filing claim for benefit? Under ERISA s/l for filing claim for benefits is the period under closest applicable state law. If s/l has expireds spouse shoud not be able to recover. 4.Given all of the time it will take to reasearch these issues why not offer spouse 2k in settlement outside of plan in return for waiver and release of all claims against plan, employer and fiduciary. It will be cheaper than researching the issues.

Sub para © only applies if the participant is convicted of a crime or breach of fiduciay duty involving the plan, not general theft from the employer. Fact that he gave himself a raise with stolen funds is not grounds to remove funds from plan. In one case pension benefits of union official who stole funds from the UNION could not be seized under ©.

I think ETK's point was that a distribution from the 401(k) qualifies for 10% exception... but if the AP rolled it over to an IRA then the 10% exception would no longer apply. Thus the incentive to keep it in the k plan. Under IRC 402(e)(1 )spouse AP has the same rights as participant to to rollover interest in plan to an IRA or own plan. Alternate payee under a QDRO is a beneficiary of his/her interest in plan assets separate from employee under the plan who can elect distribution when permitted under the plan. AP can roll that interest over to an IRA without paying 10% penalty tax as well as receive distribution without paying 10% tax.

You have two options for 2011. 1. Form a business entity with your spouse such as as a partnership or LLC so that at least one of you can contribute to a 401k plan. You can set up the plan by Dec 3, 2011 with a minimal contribution of $50 if state law requires a token amount to establish a trust and contribute the full amount when you file your tax return. You need to consult an attorney to determine the best form of business entity for you. In future tax years either or both of you can contribute to the plan up to the date for filing the tax return with extensions. 2. Wait until you are sure that either you or your spouse will have net income from self employment for 2011 and establish separate SEPs at any time up to Oct 15, 2012. When you finally establish a 401k you can rollover the SEP to the Roth 401k account and pay taxes on the conversion. As for 2010 you and your spouse can each contribute to a SEP by Oct 15 2011 if you filed for an extension to pay taxes by Apr 15, 2011. You can establish the SEP up to Oct 15, 2011and contribute on the same date.

Where is there authority under ERISA for a plan administrator to enforce state court orders that a participants assets to be frozen? Freezing a participant's benefits in the absence of a QDRO violates the participant's rights to vested benefits. ERISA only recognizes QDROs which divide a participant's benefits as an exception to the nonalienation rule. If plan procedures permit Plan admin can segregate plan benefits in anticipation of a DRO to be issued in a reasonable period of no more than 60 days. Plan admin cannot withhold payment of benefits which are not subject to AP claims because withholding payment would violate participant's right to plan benefits. Plan Admin must receive written notice from AP's attorney that DRO has been submitted to state court or copy of order filed with court. Plan administrator should not allow QDRO process to be manipulated by AP to delay benefits payable to participants as a means to gain leverage over participant. Participant is entitled to receive benefits not subject to QDRO claim by AP.

While this is good news for 09 and 10 what about the 8955 filing due date for a 2011 short plan year. Say a calendar year plan terminates and distributes all assets by Mar 31, 2011. Does the plan have until July 31, 2012 to file the 8955 or is it required to file by Oct 31,2011 which is 2 1/2 months before the 8955s for 09 and 10 are due. Also can a plan file a 2011 8955 before the 2011 form is published?

I dont know if you can establish a 401k plan to avoid the problem. There are a lot of pecular rules for public 403 plans in TX. You need to go to the Texas association of School Boards web site and look at the rules for 403b plans. The web site recommends retaining both an attorney and investment advisor who are familar with the law for texas 403b plans. Your client will have to spend some $ to figure out how to comply with TX law. TX can set its own rules for public 403b plans because they are exempt from ERISA. TX is not the only state that requires public schools to take all 403b vendors. CA, WA and OH have similar laws.

See instructions P2 - due date for filing 2009 and 2010 8955 form is later of due date for 2010 form or Aug 1, 2011. The 2009 form is the only form to be used for both years.

Excise tax applies to all terminations occurring after Dec 31, 1986. Corp income tax applies as well as 50% excies tax

See instuctions to 8955. 403b plans subject to ERISA will be required to file the 8955 form with the IRS. 8955 filing will be voluntary for non ERISA 403b plans. Also the 8955 filed for year of termination must include changes in information on participants with vested benefits on 8955's filed in prior years. Additional comment: The 8955 instructions are unclear as to whether the 8955 form filed for 2009 will be required to include information on vested benefits of terminated participants required for years prior to 2009 when DOL exempted ERISA 403b plans from the requirement to submit the 5500-SSA.

The instructions for the 5500EZ (P3) state that the final 5500 form is filed for the year in which all assets are distributed from the plan. It seems to me that if the final distribution of assets from the plan does not take place until 2010 than 2010 is the year for whch the final 5500 EZ is filed. I have a similar situation. Sole owner terminated a solo 401k plan in 2010 and rolled over all assets in the plan to an IRA before Dec 31, 2010. However, additional credits ($200) were deposited to the owner's 401k account on Jan 1, 2011 and were not rolled over to an IRA until March 2011. When is the final 5500 due? I say 2011. There is no 2011 5500-EZ form.

IRC 4971 only applies to plans subject to the minimum funding standards of IRC 412. PS plans are not subject to the minimum funding standards. Therefore no excise tax is imposed for late contributon to a PS plan. See Rev Rule 76-28 or review PUb 560 P15 for explaination of which tax year contributions can be deducted.

Because some official at the IRS could only sign off on the change after it was approved by the entire chain of the IRS bureaucracy. Has the IRS approved the 8955-SSA? The more complex the IRS makes the procedures for approving changes to the Regs or IRS forms the more time it takes to get the changes approved. I dont know how people can do this this stuff.