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EMB

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  1. A nonprofit wants to use a PEO, a for profit company, for a division of its employees. The PEO will be the employer of record for tax purposes and will be the employer who issues payroll and W-2s. The nonprofit will direct the work of the employees, so they could be considered common law employees of the nonprofit in a co-employment arrangement. The PEO has indicated that it can withhold 403(b) contributions from the employees' wages and forward them to the nonprofit's 403(b) plan provider. Although the employees may be eligible to participate as common law employees, I don't see how the employees will have "compensation" which is defined as W-2 compensation as reported by the nonprofit. The PEO also can't be a participating employer because it is a for profit company. Has anyone run into this before?
  2. Unfortunately, the plan does not have the one-year language. It also does not have any language revoking the beneficiary designation upon marriage. Luckily, the options are to pay it to the son under the beneficiary designation or pay it to the estate under the plan with the son being the only beneficiary of the estate. The plan specifically indicates that it is excluded from the QJSA/QPSA rules. It pays out in a lump sum. The plan requires that the benefit be paid to a spouse if there is one, unless the spouse consents. If there isn't a spouse or a beneficiary designation, it pays to the estate. One other option we were thinking about is simply having the spouse consent to the beneficiary designation as it does not appear that the language in the statute requiring the consent to be signed within the "applicable period" applies to the non-QJSA/QPSA plan.
  3. A participant executes a beneficiary designation naming her son as beneficiary. She was not married at the time of the designation. Within a year, she gets married. She does not change the beneficiary designation and does not have her new spouse sign the consent. She passes away. Under the plan, the new spouse is the beneficiary because he did not consent to the beneficiary designation. The new spouse wants to disclaim. Does his disclaimer, where he is treated as predeceasing the participant, revive the previous beneficiary designation such that the son becomes the beneficiary?
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