Luke Bailey

The plan says that S and D are the beneficiaries. You have questioned whether D really is a d. This is a question of fact, and the plan administrator has both the authority to determine and the authority to determine the basis on which it will make the determination. ERISA preempts all state laws that might otherwise apply and makes the plan document king/queen. Of course, the determination has to be done in a manner that satisfies the plan administrator's fiduciary duties of diligence and competence. Practically speaking, under the circumstances, assuming that the plan is not written in a weird way, if D is not a d, 100% will go to S. So if S sings a hold harmless (make sure it waives all rights to sue under ERISA), you're done.

Peter, what you're demonstrating is that the root of the problem is Congress's use of an undefined term, "retirement," which is something we all know when we see it, and yet has no precise definition in the law anywhere that I know of. Problem then compounded by IRS's failure to write regs addressing definition. We're not going to solve it on our own. Just have to do what's reasonable and be ready to back it up if questioned.

Clearly, there is nothing in the law that would treat the beneficiary designation waiver as a waiver of the J&S when distributions actually commence to the participant. Two completely separate requirements.

Clearly, the CEO is described below the signature block for the EA-S and REP-S forms, which are ancillary to the Form 500, as precise a person who could/should sign for a single employer plan. I think the same applies to the Form 500 itself. They probably just didn't have room to include the instruction there.

I can't really comment on specific facts, but I will point out that IRC sec. 401(d) means what it says. I am unaware of any guidance or case that allows circumvention of requirement. Again, don't really know your facts.

I think this comes within the Plan Administrator's authority to establish a binding, uniform, nondiscriminatory interpretation of the plan's provisions as they apply to individual facts. I would need to know exactly what this person does, why it is only once a year, how much paid, etc., but my inclination would be that this person has retired. For example, if they have a very strong relationship with a client and are brought back once a year for meeting with client, and receive, say, $1,000 for that one day's labor, and it's reported on W-2, etc., but they don't participate in any employee benefits, I would say, "retired." But again, without adopting a policy, you won't know for sure.

That's a very long PLR, Appleby. With respect to M Norton's original question, I'm still wondering how RMDs will be met, given that distributions are based on 5-year age attainments. But the question doesn't provide a detailed description. Regarding the separate lives issue, suppose the trust said the IRA was to go 1/3, 1/3, 1/3 to each beneficiary, and that an amount equal to the RMD would be distributed each year. Suppose also that the plan said that if the participant had multiple beneficiaries, separate accounts would be created for each. In such a situation, if the trust met the requirements to be looked through, would it not incorporate the plan's provision regarding separate shares, so the "look through" would be to each separate beneficiary?

If (and we have insufficient info to know) the trust meets requirements of 1.401(a)(9)-4, Q&A-5(b), then the trust beneficiaries, not trust, are treated as the designated beneficiaries. See 1.401(a)(9)-4, Q&A-5(a). So if the distributing plan met the separate share rules, you could, if again the trust meets requirements of 1.401(a)(9)-4, Q&A-5(b), which we don't know, look at each individual human beneficiary.

Agree with jpod. This is covered on page 29 of IRS Pub 15-B. With only a couple of exceptions (deemed premium for Section 79 life insurance in excess of $50k being the only one I can remember), taxable fringe benefits are subject to FITW as well as Box 1 W-2 reporting. The break they give you is that you can treat as paid at a more convenient time after the fringe is provided, e.g. end of year, and also in some cases use supplemental withholding rules. Again, covered in Pub 15-B. Still subject to withholding under 3401(a), however.

You have to determine whether the trust meets the requirements of 1.401(a)(9)-5, Q&A-7 so that you can treat each child as beneficiary for his/her share, so can use their lives, not just the oldest life. Unlikely that distributions at fixed ages 5 years apart are going to meet RMD rules, however.

Of course, the 402(g) limit is based in the individual taxpayer, not the employer, so in all cases an individual has only one of those. Also, bear in mind that the controlled group %-age drops from 80 to 50 for 415, but only in parent-sub controlled groups, not brother-sister. Beyond that, these situations are so complicated you really have to do an org chart, figure out the relationships, if any, of individuals, and other details. Your situation sounds pretty simple, but who knows when you actually dig in.

When I started practicing 30+ years ago, I learned that this was good practice. It can actually be pretty complicated to make sure you do it right (which is obviously pretty crucial), so I would say that someone who would be comfortable with making a complex amendment to the document (preferably, the same person who did the actual amendments) should do it. And yes, it takes time and we attorneys do charge by the hour, typically.

ERISAgeek111, my only additional thoughts are that it is many-faceted and fact-based. Good luck.

austin3515, I don't see why the "cut and paste" working copy doesn't fix the problem. I produce these for clients with multiple amendments all the time. They look just like a current restatement, except that each page says that it is a "working copy" incorporating last restatement and Amendments 1, 2, 3...n, and "Do not execute."

I'm confused. Did the restated document have a favorable DL? If so, and assuming, as I infer from your question, that the restatement was submitted in proposed (I.e., unexecuted, unadopted by board) form, the employer had 90 days from the date of the letter to adopt the restatement as approved, regardless of effective date of document. If within the 90 days, they could have adopted in 2018, or even this year, although I think almost all the letters were out by end of last year. I think you're generally better off sending IRS an executed document, given how long the review period can stretch, but you don't have to, and if you don't, you have 90 days from date of DL to adopt.

ERISAGeek111, ERISA and the Code may not be your biggest issues. Let me point out a couple of other issues. I don't know all your actual facts, so I will treat your question as a hypothetical. First, you would want to disclose the facts to the insurance company issuing the policy and make sure there is no mismatch between the facts and the policy language. Group disability insurance policies usually identify an "employer" as the owner of the policy and the workers as "employees," and then, e.g. in partnerships, identify the partners as "employees." So if the medical school really wants nothing to do with this and is not willing to be identified in the policy as the employer, it could get complicated from the point of view of policy language. Also, for determining the benefit, is it just "earnings" from the 501(c)(3) or from both the 501(c)(3) and the school? Second, the 1099-MISC would, I think, imply that there is a direct service relationship between the doctors and the 501(c)(3). Would want to run that by employment law, health law, etc. experts, and the folks that worked out the current arrangement in the first place, since what is being proposed seems somewhat inconsistent with it.

1) If you can get on a preapproved document, do it. Many large and/or complex employer's can't, though. 2) If you stay with an individually designed document, don't ever restate the last restatement you received your last determ letter on, even if you change law firms or TPA's. Just add amendments, so that any review by IRS, auditor, or a potential acquirer, investor, or lender is confined to the amendments. You can administer the plan from an unsigned, cut-and-paste "working copy" that presents the plan document in a unified way. 3) Keep any discretionary amendments separate from law change amendments. Adopt law change amendments only when required under Required Amendments List, and use IRS models wherever possible. 4) If your lawyer drafts a discretionary amendment and you adopt, there is an implicit statement from the lawyer that the amendment is not in lawyer's opinion disqualifying, unless the lawyer raises an issue, e.g. in cover letter sending amendment. 5) Opinion letters on qualification are generally going to be useful only in mergers and acquisitions and in take-over situations, in both cases often just being really compliance checks and a gateway to VCP, as michaelhughes suggests.

So Card, the question wasn't all that precise about the issue that they were asking about, but I was addressing the relevance of the distinction to the distribution and its reporting. I think what the regs are saying is that obviously, since when the Roth funds are originally credited you don't know whether the Roth holding period requirements will be met, you need to keep a record of "basis" and "earnings." And you don't stop after the holding period has been met, although the distinction may no longer be relevant.

I'm still struggling to find relevance, although it's possible I'm missing something obvious (or not obvious), and always welcome enlightenment. But granted, a rollover IRA can't make a qualified distribution until it separately satisfies the 5-year holding period, but the entire amount rolled over to it (Roth contributions and post-contributions earnings) is treated as basis in the rollover IRA, so the problem of differentiating basis from earnings in the IRA would only be for the post-rollover earnings.

No, none of the 1099-R's should be reversed. In fact, give him one for the balance every year until he...just joking. Sure, one of them is wrong so you need to do a 1099-C. Which one to correct depends on timing. If the first one was correct, then most likely you have to treat the repayment(s) after deemed date as repayments, but need to account for those as after-tax/basis.

At this point I am thoroughly confused by this thread (which is itself confused partly because the Code and IRS guidance are not all that clear), but I'm pretty sure that 416(g)(4)(H)(i)'s reference to a CODA that satisfies 401(k)(12) means a CODA that does not need to test ADP because it satisfies either the nonelective or match safe harbor. 416(g)(4)(H)(ii)'s reference to 401(m)(11) and (12) isn't meant, I don't think, to say that you can only get out of top-heavy with the match safe harbor, but rather that if you do use the match for 401(k)(12), then the match needs to also satisfy (m)(11) or (12). Rev. Rul. 2004-13 perpetuates, unfortunately, what was a confusing statutory phrasing in the first place by including only a match in its example. Maybe the author of the Rev. Rul. didn't want to take any chances himself, given that he was providing guidance in absence of regs. Anyway, my guess would be that you are not top-heavy based on your hypothetical facts.

I agree with Kevin C.

You have to check your plan document (or your plan document plus a policy adopted by the employer as plan administrator, if your plan document says this is to be determined by a policy) to determine if the participant in fact has the right to choose to take all of the $50,000 (which appears to be a non-hardship in-service distribution from a non-rollover account) from his/her designated Roth account. Of course, your plan document also has to permit ad hoc in-service distributions at age 59-1/2, which not all plans do. Some institutional trustees default to prorata unless both the plan document and the request from the participant dictate that it's all from the Roth, in which case they will report only a portion coming from the Roth and will report on two different 1099-R's. If, in fact, it all comes from the Roth account, then if he has met the Roth holding period for a qualified distribution, there is no federal income tax on distributions from that account.

Unless you can successfully resolve the issue of whether there was a plan, then I would make sure not to commingle old funds with new, i.e., start a new plan for new funds. Work out what to do with old based on facts and circumstances and the law.