mbozek

ADEA does not have any impact on age discrimination in retirement plans because age discrimination in retirement plans is subject to ERISA rules (e.g., age discrimination is not limited to ees 40 and over and formula cannot reduce benefit accrual on account of increase in age). Second, age discrimination in CB plans is based upon disparate treatment not disparate impact. Disparate treatment is direct discrimination based upon age, e.g., plan formula provides a lower level of benefit accrual at NRA for ee at age 22 than a participant age 21. Disparate impact is indirect discrimination of a facially neutral policy (e.g., greater salary increases for employees with less than 10 years of service discriminates against those employees 40 and older who are more likely to have 10 yrs of service).

The cutoff was June 1986.

Contributions to a roth are permitted only to the extent you have US comp in the year of the contribution. Under the curent tax law there is no US income tax on earnings on roth contributions that are held for a minimum of 5 years, although the tax law could be changed in future tax years.

JM: Who is "we" you referred to? Is it the TPA, plan administrator, HR? I dont know what the liability is for the plan if the AP's lawyer failed to notify the plan or delayed sending the QDRO. The APwould have recourse against the employee if the divorce decree restricted removal of the plan assets or awarded the assets to the AP pending issue of the QDRO.

Plans sponsored by governmental employers for their employees are exempt from ERISA but are subject to some requirements for qualified plans under the IRC. Government employers cannot establish a 401(k) plan.

for $27 i wouldnt worry about st laws - pay mom as guardian for the child and if you are worried about liability to the kid get an indemnification from her.

the proposed a9 regs applied the 5% rule to any owner with a greater then 5% interest at age 66 or later.

Dr is limited to the max deferral under the k plan minus the SIMPLE deferral. Pub 560, P10. He can still deduct 20% of net earnings from med practice (less 1/2 SECA tax) contributed to a PS plan up to 42k max.

Most states have enacted laws protecting IRAs and qualified plan assets of self employed persons from the claims of creditors. Very few (NH) have no state law protection for retirement plan accounts.

Easiest option is to reissue the check to spouse as bene. Payment should be reissued as AT amt since the distribution was included in deceased taxable income in 2000 even though not cashed.

Yes that is what the form requires but the instructions do not prohibit the filing of a second 2441 by a working spouse for another 5k depenent care exclusion. I think the convention is that the max exclusion is 5k even though the statute applies the 5k exclusion on a per employer basis.

Does this mean that the max exclusion for a married couple who file a joint return is 5k or that the max exclusion per employer for a married couple who file a joint return for a tax yr is 5k? Its not clear that the 5k limit relates to the taxpayers who receive the DC benefits (amt that may be excluded under paragraph 1), instead of the employer who sponsors the plan.

IRC 129 provides for a exclusion of up to 5k for amounts paid or incured by an employer to a DCP program that meets the requirements of IRC 129(d). The definition of employer includes unincorporated businesses but has no aggregation requirement. Part III of Form 2441 provides for a deduction of up to 5k to a DCP program. Q- Is 5k the maximum amount that can excluded by a married couple who file a joint return or can each spouse file a 2441 form and claim 5k? The instructions do provide any information on whether each spouse can file a separate 2441 since the IRC limit is a per employer basis.

Dont understand your Q. The roth is a way to eliminate taxation on income from retirement benefits under US tax law. If you are only here temporarily it will not affect your taxation at retirement if you live in a foregin country. You need to review the tax laws in your domicile to determine how the roth would be taxed at distribution.

There are numerious cases under the 1986 tax act on when payments are made by an employer to an employee for income/ deduction purposes. General rule is taxable to employee in year made, not the year received, because employer claims a deduction in that year. Also Constructive Receipt was only repealed for taxation upon the occurrance of a distribution event. IRS still applies CR where an employee does not cash the check.

Under IRC 2518 a disclaimer is not valid if the recipient accepts a benefit under the property. Someone who has received income is deemed to have accepted the property. Who is the survivor?

W- Why would the DOL audit a plan that was terminated 15 yrs ago? Why has the s/l not expired for any claims. Under case law plan participants are only entitled to their accrued benefits - they have no rights to any other funds since they do not take investment risk.

Instead of getting aggrevated why not exercise your rights and ask the agent to provide you with a statement in writing justifying the agent's position with references to the IRC and regs? The agent will not issue a letter without having it reviewed by an IRS attorney.

True but lost participants rarely ever reappear. Secondly the er gets the benefit of using forfeitures instead of E & P for contributions while waiting for the ee to reappear. The Q is how large are the accounts of the missing P? Also the plan need to have a provision to forfeit accounts of missing P.

The SEP cannot discriminate in favor of HCEs and must cover all ee with service in 3 of last 5 years. The SH provision permits another arrangement that meets the requirements for a SH to be treated as a SH for those ees eligible under such arrangement. IRC 401(k)(12)(F). SEPS are subject to the TH rules for those NHCEs who meet the eligibility requirements. I dont know if the final 401k regs answer your Q. Only aggregation I am aware of is 415 limits. Havent done the reasearch but er should be able to contribute to SEP for this yr for himself and maintain a SH plan for all eligible ees with contributions to both plans aggregated under the 415 limits and no TH requirement for the SEP if no other ees are eligible to participate in 05.

Instead of going though the hassle/cost of complying with the mandatory rollover rules why not charge a fee directly to the accounts of terminated participants to defray the cost of administration or forfeit the accounts if the participant cant be located? Much simpler than direct rollovers and the plan benefits from the forfeitures.

IRC 461 regulates when deductions accrue for tax purposes- it has nothing to do with NQDC plans.

These cases are never decided on the merits but on the need to settle the case for the least exposure. Onan settled the claims of its ees for 20M even though it prevailed in the dist ct. rather than risk an adverse judgment on appeal. Xerox settled its liability for 238M after losing on appeal instead of appealing a 300M judgment to the Sup ct. IBM will probably settle out for less than the 1.4B exposure rather than risk losing the case in the Sup ct. Settling a bad case is cheaper than paying good lawyers.

The problem with your argument is that, as the court noted in the IBM case, the accrued benefit under ERISA is determined as of the NRA, not at any relative age, which reduces a benefit accrual based on the time value of money for any employee who is one year older than any other employee who participates in the plan. Under ERISA age discrimination applies to all participants, not just those 40 and older.

The CB age discrimination litigation is under ERISA 204(b)(1)(G) which prohibits reduction in accrued benefits on account of age, not the ADEA. The Smith case was brought under the ADEA on the theory of discriminatory impact, i.e., a facially neutral policy adversely affects older employees in practice. The policy was to give larger raises to those police officers with the fewest years of service, which while neutral on its face gave the lowest raises to older officers who had the greatest years of service. The CB litigation is based on discriminatory treatment, which has an adverse impact directly on older employees, i.e., CB plans discriminate against older participants because the use of the time value of money to determine the benefit accrued at NRA results in a lower benefit at NRA for any employee who is older than any other employee who participates in the plan.