Our 100% ESOP S Corp has a Stock Appreciation Rights program for senior leadership and board members that creates a huge amount of synthetic equity. In fact synthetic equity is now almost 30% of the outstanding shares of stock. At the end of this year the program will pay out almost $4 million to these select shareholders. This company, on average, makes only $5 million in net income annually. It appears they're staying just within 409(p) testing, but they just merged the 401k with the ESOP to help with this ratio testing. I'm afraid they're going to get even more bold in coming years in creating more synthetic equity. Employees now need to contribute to 401k to get matching ESOP shares. I'm concerned that management and board may be acting unethically and hurting the value of average employees retirement benefits. I also see some self-dealing going on with leases and sales of a building owned by a board member to the company. Same three board members and CEO appear to be the main beneficiary of all this. Any recommendations about what to do next would be appreciated.

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A non-US citizen lived and worked in the US and participated in her company's 401(k) plan. She has moved back to her home country, but she left a small 401(k) balance. I would think that she can avoid paying US tax (and an early withdrawal penalty) by rolling the funds into an IRA and keeping the money there, at least until she turns 59‑1/2. Agree? I'm finding nothing about non-citizens in IRS Publication 590.