Gary Posted October 13, 2011 Posted October 13, 2011 more poorly behaving 1 participant plan sponsors. say plan has 300k in assets. owner/participant is age 69 and has worked past NRA pvab = close to 300k in 2010 owner withdraws 130k (in about 4 payments during 2010) and prepared a 1099R. no benefit election forms, etc. prepared plan allows for QJSA to commence at NRA if working or lump sum option not married and normal form is life annuity. owner now terminating the plan and will distribute balance. as far as i see it the 130k withdrawal is a plan operation failure and could disqualify the plan resulting in potentially loss of corporate deductions and entire pension taxable, etc. is that a correct interpretation?
david rigby Posted October 13, 2011 Posted October 13, 2011 Any chance the plan doc has a loan provision? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Gary Posted October 13, 2011 Author Posted October 13, 2011 the loan provision would only be for as much as 50k. perhaps if distribution were no more than 50k then presumably it could have been a loan followed by a deemed distribution due to failure to meet requirements. thanks i am not looking for a solution as much as i am trying to determine if i have analyzed the violation and potential consequences correctly.
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