tja Posted June 28, 2016 Share Posted June 28, 2016 It is my understanding that an employee's contributions to a governmental defined benefit plan cannot be refunded to an employee who is no longer covered by the plan if he or she remains employed with the sponsoring employer unless he or she reached normal retirement age. This issue arises in the context of a collectively bargained employee who leaves the bargaining unit to become part of management. Does anyone know of any exceptions or is there any authority that supports the refund of employee contributions to someone who transferred to a position not covered by the plan but has not separated from service? Link to comment Share on other sites More sharing options...
My 2 cents Posted June 28, 2016 Share Posted June 28, 2016 Two considerations in deciding: 1. What does the plan say? 2. Is it a good idea? Always check with your actuary first! Link to comment Share on other sites More sharing options...
Griswold Posted June 28, 2016 Share Posted June 28, 2016 I've come across the issue before, but our analysis was based entirely on the terms found within the plan. If I recall correctly it had to do with whether or not the participant was still in "covered employment" as defined in the corbel plan. Link to comment Share on other sites More sharing options...
tja Posted June 28, 2016 Author Share Posted June 28, 2016 The plan currently requires separation of service but an amendment is being considered to allow in-service refunds to employees who leave covered employment by transferring to management. . Link to comment Share on other sites More sharing options...
JJRetirement Posted June 28, 2016 Share Posted June 28, 2016 Coincidentally, this is closely related to a question I just posted on termination of employment for a governmental plan. I think the definitely determinable regulation and the old rev. ruls. on which it was based does apply to governmental plans, so that in-service distributions wouldn't be permitted before the earlier or 62 or NRA even if the plan were amended to permit them. So I think the question of whether the employee is still employed needs to be answered (unless the participants in question are old enough to qualify for permitted in-service distributions). Link to comment Share on other sites More sharing options...
Carol V. Calhoun Posted June 29, 2016 Share Posted June 29, 2016 Are these picked up contributions, or after-tax employee contributions? Employee benefits legal resource site The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances. Link to comment Share on other sites More sharing options...
tja Posted June 29, 2016 Author Share Posted June 29, 2016 All or virtually all picked up. Link to comment Share on other sites More sharing options...
Carol V. Calhoun Posted June 30, 2016 Share Posted June 30, 2016 Picked up contributions are treated as employer contributions. So they could not be the subject of an in-service refund until the earlier of age 62 or normal retirement age. Merely transferring from a collectively bargained position to one that is not collectively bargained, or ceasing to be covered by the plan, wouldn't help. Employee benefits legal resource site The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now