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Found 6 results

  1. has anyone had a situation where the named beneficiary is not a US citizen or resident? I'm not sure what to use for a taxpayer ID number or whether I should be advising this person that they will have to file a US income tax return, as the funds being paid out are coming from a qualified retirement plan (not individual) where the participant lived/worked in the US and had an SSN. unfortunately he passed away unexpectedly following retirement and we didn't have a chance to pay him out directly. now dealing with a family member outside the US who is non-english-speaking and I have no direct contact information other than thru the prior employer.
  2. Good afternoon to all, We have a profit sharing plan that accumulated quite a few terminated participants who had not been paid out. The plan did not have automatic cash-out provisions until we amended them into it last year. The plan is also very odd in that it has a provision that accounts of terminated participants do not experience gains or losses. The accounts are frozen at the value as of the end of the plan year preceding the date that the person terminated employment. So over the last couple of years, I have been working diligently to find as many of these people as I can and get them paid. One of them has me stumped. The gentleman only worked for the employer for about a year and a half back in the early 90s. However, it was just long enough to get a little contribution that has been sitting in the plan ever since. The amount is just under $400. The employee quit and moved to CA, whereupon he had a fatal automobile accident which also killed his named beneficiary, his wife. We can't find anyone related to him, so far. They were in their 20s when they died and do not seem to have had children. The plan document indicates that the money would go first to the spouse (dead), then the kids (nonexistent) and finally the "estate". It's all very well and good to talk about an estate when a death is recent and the deceased actually had assets. After 25 years, for a couple that likely had nothing, what kind of an "estate" is there to pay the sum to? None. What have the rest of you done with assets under such circumstances? As always, your thoughts are much appreciated.
  3. We had an associate pass away with no designated beneficiary on file for the 401k. Per the order of succession in the plan document, the beneficiary is the associate's estate. The beneficiary of the estate is now wanting to transfer the money into an inherited IRA. Can the transfer to an inherited IRA occur because the beneficiary is an estate? If so, would it have to be setup in the name of the estate or can it be setup in the name of the beneficiary of the estate?
  4. DB plan's pre-retirement death benefit for unmarried participant who dies with vested benefit prior to age 60 is life annuity payable to beneficiary starting when participant would have attained age 60. How does this work with 401(a)(9) regs that require the life annuity to the beneficiary to begin within year of death (no lump sum available)? If the participant dies at age 50, by when does the non-spouse beneficiary have to take the benefit?
  5. I have a plan that has a very rich death benefit. If an active participant dies then the spouse gets a 100% J&S payable immediately. There is no reduction for early retirement. The normal form for the plan is 10cc. The benefit is converted to 100% J&S using the plans factors. A participant aged 45 died. The spouse is 41. My question is how to calculate the 415 limit on the benefit. I assume that I would reduce the dollar and pay limits to age 45 by using plan and applicable assumptions and take the lesser of these. What if the spouse decides not to immediately commence benefits? The plan provides for actuarial increase from the date the benefit could have commenced. (Month following death) The benefit will increase each month. Does the 415 limit increase each month also? Do I use the participant's age or the surviving spouse's when calculating the limit?
  6. Participant A passed away leaving a 401(k) account balance. The beneficiary form indicates 3 beneficiaries - Beneficiaries 1, 2 and 3. The balance to each beneficiary is greater than $5000, the involuntary cashout threshold. Beneficiary 1 works at the company sponsoring the 401k plan while Beneficiaries 2 and 3 do not work at the company sponsoring the 401k. What options are required to be shown on the form? Would I show Lump Sum and Rollover to IRA or do I need to give the beneficiaries a 3rd option to leave the balance in the 401k plan and take annual RMDs or installment payments? If I showed only Lump Sum and Rollover to IRA and received no forms back from Beneficiary 2 or 3, would the balance just stay in the plan, moved to a separate account in the beneficiary's name and be subject to RMDs on the beneficiary's life expectancy? Just want to be sure I show the correct options required on forms. Thanks!
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