mbozek

I agree with you Dave. One problem of putting a disclaimer on material is that it creates an implication that it constitutes advice or opinion because the disclaimer language appears. The problem is that most practitioners are slapping disclaimer language on all their correspondence because they dont have time to think about whether the correspondence is rendering tax advice or opinions under Circular 230. I dont know if there has ever been a case of someone claiming that a reply to a question on a bulletion board was advice because in lawyer terms I dont see any privity of contract between the poster and responder or attorney-client relationship established by posting a response on a public forum to an anomyous source.

They are not. Faculty plans usually cover employees by categories, E.g. full time or depending on faculty class, e.g. Professors, Associate professors, etc., because faculty members dont punch clocks and are usually unionized. Adjuncts are part time faculty who teach specialized subjeucts and can be included or excluded depending on the Univ's employment / HR policy since they are rarely unionized. Some Univ allow adjuncts to make sal. reduction only; some exclude adjuncts from plans since most adjuncts have day jobs. You might google some info from the American Association of University Professors web site (AAUP).

Providing Circular 230 disclosure has become quite the fad.The disclaimers only need to be given if tax advice/opinion is being given by advisors to clients regarding the application of tax laws (but not ERISA or PBGC). However, Circular 230 disclaimers do not generally have to be provided for written advice that concerns the qualification of a qualified plan. Disclaimers do not have to provided in advising clients of benefits under the tax law that are legally permitted, e.g., the max contribution to DC plans is $42,000 and maximum deduction is 25% of covered compensation or the advangages of establishing a Roth 401k plan. I don't believe there is any tax penalty for failing to provide a disclaimer even if one is required, since Circular 230 applies only to practitioners who are admitted to practice before the IRS, e.g. attorneys, CPAs, enrolled agents and enrolled actuaries. The most amazing thing is that very few people know what purpose a Circular 230 disclaimer serves when it is added to correspondence . (It puts the client on notice that the tax opinion rendered by an advisor admitted to practice before the IRS cannot be relied upon to avoid the penalities for underpayment of taxes. In order avoid a Circular 230 disclaimer the opinion would need to meet certain strict requirements regarding the substance and the analysis of the tax law.) Lawyers and CPAs are adding disclaimers to all correspondence because they cant differentiate between tax advice (which includes emails) rendered to clients and routine information that is not subject to Circular 230. As a result advisors now include a 230 disclaimer if an IRC section or regulation is mentioned in correspondence.

There have been previous discussions on whether a spouse who partcipaties in the same plan must remove the deceased participants benefits from the plan before placing them in her account because the statute implies that the transfer of the funds to the spouse must be from outside the plan.

Why cant the surviving spouse roll over Y's account balance to her own IRA in 2005 and take mrds based upon her life expectancy beginning 2006? My understanding is that spousal rollovers after 70 1/2 are permitted by IRS in PLRs.

Its the same employer who adopted the plan since the only change is in the legal form of the sponsor and the comp should be aggregated.

I am a little lost on this theory since the IRS regs state the FVM is aggregated with other IRA accounts regardless of whether they are custodial accounts or annuities or under 408©. If If you want a confirmation of the statement attributed to her why not call Cathy Vohs directly?

I thought that only applied where the annuity benefit is annuitized. If the employee does not commence the annuity at 70 1/2 the fvm of the annuity is added to the accounts of other IRAs for MRD purposes. See reg. 1.401(a)(9)-6 Q-12. The MRD can be taked for any IRA account.

Before considering EPCRS what is the amount of additonal contributions required? It seems to me that if some ee were supposed to get a greater contribution under the formula requiring 1000 hrs of service then the er should contribute the difference between that amount and the amount that was actually contributed. The 1000 hr requirement can be revoked retroactively because it is not a cutback and the plan can use the intended formula going forward. If the amount of the additonal contributions required is less than the cost of the EPCRS filing why bother getting involved with the IRS?

Recission applies if there is a return of an amount that was included as a taxable distribution in the same yr. My posiition would be that at the time of the distribution in 2004 he received an amount he was entitled to under the plan. It was not until 2005 that it was determined that he had no claim of right to the excess and a return to the plan in 2005 is a recission in the same yr. Why would the plan report the return of the excess as a taxable distribution on a 1099?

Why cant repayment be made by a tax free rollover from the IRA to the plan? I dont see how there can be an excess distribution on an amount in the IRA that is in dispute and is returned as part of a settlement agreement after the plan discovers the mistake. If there is no tax reporting of an overpayment by the plan there is no distribution. This should be part of the settlement agreement.

Why not file a counterclaim/crossclaim (or whatever it is called in Fed ct) for an accounting of the benefits owed. Dont know if this is possible in an ERISA case. I dont see why you need to pay for experts before you get information from the plan as to how much was overpaid. The plan has to specificially identify the excess funds that are in your client's possession. The plan can't just demand refund of the excess. This will entail a cost by the plan admin to find the exact amount of the funds in question that are commingled. The plan cannot recover any excess benefits that have been spent by your client.

Why isnt the entire loan a lump sum because the loan was invalid at inception? I guess the CPA has malpractice ins. see Reg 1.72(p)-1 A -1 loan is valid at inception if it limits loan to amount under 72(p)(2)(A).

Why cant employer impose mandatory contributions as a condition of employment on existing employees any more than reduce their work hours or impose a dress code? St law only requires employees consent to withholding, it doesnt prevent termination if ee refuses to consent to withholding or a change in work hours, etc. This is called employment at will. As a separate issue ERISA requires that a plan have a funding policy of how contributions are to be made to the plan which can include mandatory employee contributions. SPD must state source of contributions to the plan, er or employee or both.

I am sure the judge does not want to try this case so your client needs to determine the amount of the excess payments. He could retain an actuary to determine how much he was overpaid and negotiate a settlement. I dont see any reason to be in court if the only question is how much he needs to return- since the money is in an IRA he can send it back to the plan by a rollover. I dont know what good faith has to do with a defense. ERISA is a law in equity and restitution for unjust enrichment is an equitable remedy. You havent mentoned what defense the employee has to the suit: statute of limitations, promissory estoppel, latches, etc. I dont understand what happened. Are u saying that ee terminated from employer A and went to work for B and then B was acquired by A and ee received a second distribution form A's plan? Did the overpayment result from the lump sum paid to the employee when he terminated a second time by including credit for service which he recieved in the prior distribution. If so then the overpayment can be determined by calculating the amt of the accrued benefits for both periods of service and subtracting it from the aggregate of the lump sums paid for the two periods of employment. The difference is the amount that is owed to the plan.

Its no different than other conditions of employment, e.g., employee must be eligible to work in US, hours of employment are 9-5, all truck drivers must have a valid Drivers license, mandatory overtime is required, etc. I dont see why this would be prohibited- Its no different than a reduction of the employee's pay which is permitted under state law. I wan't surpised that the NY State labor dept cannot answer the Q. NY is the last bastion of pure employment at will and st law only requires consent to payroll reduction. The law does not prevent termination of employment for failure to sign a salary reduction agreeement since the employee can be terminated for any reason other than age, sex, race, religion, etc. if there is no written contract.

have you looked at at your agreement with the bank that is currently making the payments to see if the information can be transferred? Second have you retained counsel to determine what are the legal issues of transferring such info under state and fed banking/privacy laws?

An employer can require that employees pay for health care costs (or pensions) as a condition of employment. Under the rules of contract the employee is free to terminate employment, no different then terminating if pay is cut. People forget that under the US system most employees are employees at will who can terminate employment for any reason. I dont see why state law would prevent an employer from imposing a health plan cost on the ees. An employee who did not want to pay for such cost could terminate. The employees can pay for the HC cost from their paycheck or have their salary reduced by the employer- its the same amount of $ to the employer. The only persons who are protected from imposition of this cost are employees covered under a written contract, e.g., union employees.

I dont understand what the cutback is if the plan is amended since the plan initially required that participants had to be employed at the end of the year. If there is a cut back for some participants then amend the plan to give the the greater of the two formulas for the yr ending 06/05 and the revised formula for all plan yrs after 06/05.

Amend plan retroactively to eliminate the provisions.

I always thought that secular trusts were limited to top hat plans. There is no prohibiton under ERISA in using a taxable trust to fund benefits which is what a secular trust is under IRC 402(b). The difference is that unlike a Q plan there is no tax deferral for contributions and earnings that are vested in the employee. I once drafted a taxable trust for for an ERISA plan that provided early retirement benefits for life for an employee who was 55. The terms of the plan provided that the employer make an anual contribution to the trust of $20,000 which was the amount of the annual vested benefit paid by the trust to the employee. Since the trust had 0 assets at the end of each year there was no tax to the trust. An actuary signed the sked B that the plan met minimum funding standard since the benefits would be fully funded over 30 yrs and each year's contribution met the minimum funding requirement.

Who is the trustee of the secular trust, the participant or the plan fiduciary? If the participant is the trustee then the participant has a self directed account for which the plan fiduciary is not liable for the participant's exercise of independent control over the investments. What I dont know is whether the employee can be both the sole trustee and sole beneificary of the trust since this may violate the merger of interest rule under the trust law of some states.

I dont see the need to request clarification from the attorney who drafted the DRO. The AP can inform the parties that the no rollover provision must be removed because it is conflicts with the plan which requires that the AP be given the right to rollover. I dont agree that the a DRO can eliminate rights that the AP has under the plan and there is no reason for the plan to risk adverse action from the IRS or the AP by accepting a DRO that refused to allow a rollover. I dont see any basis for contempt of ct because the plan is not a party to the divorce acton and the ct has no jurisdiction over the plan. The ct could force a withdrawal of the rollover by the AP in violaton of the divorce decree because the ct would retain jurisdiction over the AP.

Isnt this postering all part of the Kabuki theatre that is always playing inside the beltway. The administration officials are telling the employer groups what they want to hear about the importance of the 409A regs when they need Congress to approve Katrina legislation to improve the administraton's approval rating. And after Katrina there will be Rita legislation. The IRS officials know that its not the employer groups who will approve their appropriations for the Fiscal yr that begins Oct. 1.

Why is there a compulsive need to know when the regs will be issued? When they are issued everyone will able to review them and advise clients to amend their plans as of whatever date the IRS requires. You can check www.irs.gov to see if the regs have been issued. I didnt come up with any documents under "409A regulations"