doombuggy

I have a 83 yo owner who needs to take a RMD, and her son, born in 1944 is the beneficiary (spouse has waived his rights). The Relius program is caculating her RMD based on the Uniform table, and not the Joint table (Table VI). I know she will questions this - is this correct? I thought we could use the Joint Life table in a case like this. Any thoughts on this? Thanks for your help!

I would take steps to make sure that the spousal signature was correct (if I was the trustee of the plan). At my old job, I used to process a lot of QDROs, and quite a few death distributions. I saw a few crazy ones, so I would be wary. Good luck!

Thanks for everyones replys. I did read the publication this guy mentioned, and saw that it applied to 403(b)s, which this is not. I don't know why they decided to switch (or for all i know, they still have the other plan). I'm just the little guy aka the tpa.

I have the financial advisor of a plan owner/trustee/participant calling asking me about this person being able to possibly contribute an additional $15k over the next 5 years as a "life time catch-up" contribution (this is in addition to the 402(g) and $2k catch-up that she may make this year). He also mentioned a "special election A," also called "year of seperation of service limit," that allows additional contributions. The company is non-profit and has a 2 year old 401(k) plan. They formally had a 403(b), I believe, that was not administered by us. I have never heard of either of these two items that the finacial advisor has mentioned. Am I out of the loop? Can anyone shead some light on the subject for me? He also mentioned publication 571, which I am going to look for now. Thanks for your help, guys!

I had many problems with the catch-up program with Relius, as we had 7 last year, then got 8.0 in late December. We downloaded their fixes in mid-January, and it completely messed up the catch-ups. Relius told us to add a seperate source, then with 8, the deferral & catch-up sources needed to be combined. Not something we had teh time to do in January! While I got all my calender year plans straightened out, the off-calender plan I have with catch-ups is all messed up. I had to resort to manually doing the ADP test for teh 6/30/03 pye. Believe me, I spoke to Relius several times & they were no help.

To be honest, I hate doing Sch. Hs b/c they are "a real pain." I was always just an average math student, and I think you need to be a whiz to do these things. JMHO I never fill this section out. I leave it for teh auditor, and tell the client that when the auditor is done, I can reprint that page for them to send to the IRS. I had put one of these aside in late June (we moved our offices, then had stmt period, so we've been busy), and just picked it up again yesterday (yes, it was extended). The client finally sent the 2001 singed copy to us about 3 weeks ago, and yesterday I noticed that the auditor used white out on the Sch. H and made some changes! It makes me wonder if he did the same thing to the copy sent to the IRS! So, there are plenty of bumble heads out there!

I am looking in the ERISA Outline book for some answers on payments to benes other than spouse, and I think you might was to check out Ch. 6 Section 5 Plan Distributions, pages 6.168 & 6.169 (this is the 2002 edition).

I have seen a similar situation at my last job. Participant died in suspious cr accident. Wife, who was not listed as the bene (benes were sons, under age, but wife did not waive rights), was under suspicion of accident, and was claiming the 4019k0 account. Father of dead participant was fighting for the account for the named benes (his grandsons). We advised the company to not release the account to either party until the case was heard in court. I don't know or remember the out come - this was several years ago. I would give you the same advice ~ let the courts decide. it doesn't help when the family has bills to pay, though. Good luck!

Items 1- 4 that you listed are the "safe harbor" reasons. Perhaps the other one (#5) falls under the "facts & circumstance." I would check the actual regulation that you are quoting, so see if he can get some $$.

I have to say this ~ you are now honored with the designation, and can funnel more money into ASPA to keep it.

i have seen a lot of QDROs, but never a case like this! If it was me (meaning I was alt payee), I would liquidate my segregated account and roll it into an IRA, possibly in both names. It's a thought. It is weird that they went to the trouble of obtaining the divorce, and the QDRO, only to get remarried.

I have a plan that we have been the TPA for several years. Company A aquired another dealership (call it B), and B's plan was closed, and the monies moved over into A's plan. I am trying to do the Schedule I, and I want to make sure I am logging this "merger" correctly. I need to put the amount that was transferred into A's plan from B's plan on line 2k. The monies from both plans show in the ending balance. There is no other place that I am supposed to log this merger in, correct? I have never been faced with this situation before, and don't want toget a letter from IRS/PWBA/DOL or whoever! Thanks for your help! PS: we were not the TPA for B's old plan, and the former r/k is doing their final 5500.

We have run top heavy testing on this plan in the past, as it has been a safe harbor plan since 1999. They match throughtout the year, along with the safe harbor. At year end, they usually do a profit sharing contribution. They had a subsidiary corporation, which the person that I menion above met the salary requirements mentioned in my post (he got paid by both companies). Now the subsidiary company is gone, so he was not making the $$$. My question is: When I run the top heavy test at the end of 2003, will he still be considered a former key (given that he does not pass the officer or owner test menioned in my first post), or does this designation only last for one year? The client is ansking me and i cannot find an answer anywhere. Thanks for your help! (Miss) doombuggy

I have a plan that contributes a match, profit sharing and a 3% safe harbor. We do not run the ADP/ACP tests because of the S/H, and ran the Top Heavy test this year (which they fail, but b/c of the safe harbor, it's ok). The company is questionning the excluded balance of an employee. This plan is a calender year plan, and the employee was key in 2001. While he is still an officer in 2002, and owns more than 1% (but less than 5), he does not meet the salary requirements for the 1% and officers tests, so he is now a former key. His balance was excluded from the t/h. My question is: When I run the top heavy test at the end of the 2003 plan year, will he still be considered a former key, and thus his balance is excluded, or will he become a non-key employee, and his balance included in the test? We have looked at the 2002 ERISA book and the 2000 Pension Answer book and cannot get a definitive answer. Does anyone know how this will be handled? Thanks for your help!

Does anyone know the regulation that covers this topic? I sent the client the calculations for the RMD from the 401(k) plan that we administer for them, and want to give her concrete "evidence" to give to this participant, showing that he must take the RMD from the 401(k), and not just the IRA he has with someone else. Thanks for your help!

One of my clients has a retired participant who is required to take a RMD from the plan. He says he has an IRA account as well, and can take a RMD from that and it will cover both the IRA and the RMD. I cannot find anything to support this theory. In the new regs from April 2002, it says that RMDs must be calculated for each IRA seperately. While the answer to this question dealt only with IRAs, could we perform the manual calculation for teh 401(k) RMD and give the amount to him, so he could take the actual distribuiton from his IRA (along with the RMD for that account)? Or is this this guy pulling my leg?

I agree with Katherine. As for the 70 1/2 RMD, unless the rules have changed, a terminated employee needs to be taking the RMD. It's the active/non-5% owners who have a choice.

I am drafting up worksheets for a plan I have with the following seniaro: Plan's $$$ are still with the same investment carrier, but during the 2001 plan year they changed contract types (from unallocated to allocated). Their contract number changed, and I am thinking that I need to submit two Sch. A - one for the old contract and one for the new one. When drafting the Sch. A for the old contract, the only problem I am having is where to place the liquidation amount. I would not pick 6e(1) Benefits Paid, as the $ was not paid out to the participants. I was considering line 6e(3), as this $ was transferred, but now I am not so sure. The participants were given new enrollment forms to fill out when this contract change was done, and their investment choices went from like 5 to 55 funds, so I am sure some of the money that left this GIC fund in the old contract went ot other funds in the new one. Where would you sugest I place this transfer? Thanks for the help!

Does the safe harbor definition of a hardship "expenses for medical care" include dental? I am not finding anything in the EOB or the 401(k) answer book. Thanks for your help!

Thanks everyone for your help. I still have not gotten the QDRO, but I will tell this client that if she has to set up an account for the alt. payee, she will do so. I imagine that she can require this non-employee to pay her share of the recordkeeping fee for the upkeep of the account. Again, thanks for your assistance!

I have processed quite a few QDROs over the years too and have never encountered a situation like this! I did pull the document (old one, as has not been updated for GUST/EGTRRA yet - we are getting there) and found that hardships are permitted; other triggering events are seperation from service, death and disability. Also, a participant who has not seperated from service may not obtain a distribution of his/her vested employer contributions. Distribution can only be made if the participant is 100% vested. A participant who has obtained the plan's NRA and who has not seperated from service may not receive a distribuiton of his/her vested account balance. I found a definition of early retirement age in relation to QDROs: Payments under a QDRO may be paid at any time on or after the participant attains earliest retirement age. Further, a plan may allow for payments to be made even before the participant attains earliest retirement age. However, a domestic relations order is not a QDRO if it requires payment before the participant's ERA and the plan does not allow for early payments to alternate payees. The statute [i am not sure which statute they mean here, as I am missing some pages]defines ERA as the earlier of the date on which the participant is entitled to a distribution under the plan; or the later of the date the participant attains age 50 or the earliest date on which the participant could begin receiving benefits under the plan if the participant seperated from service. The article goes on to say that generally, if the participant is actevely employed, ERA is the earliest age at which the participant could receive benefits under the plan if the participant seperated from service, but not earlier that age 50. This article is from 1992, so it may be out dated.

I have a client who is in the process of doing a QDRO for one of her employees and the alternate payee is requesting that an account be set up for her and maintained by the plan (she apparently likes the fund selection & performance). The trustee does not want to do this - she wants the alternate payee to take a distribuiton now. Is the company required to set up an account for a non-employee? Thanks!