"I have been told if I take my retirement, earned over 40 years, that I cannot work in my craft in areas under Local 12 jurisdiction or I could lose my pension. Is this true?"

"I am an employee of a small law firm. I am 'of counsel'. 4 years ago, my employer complained that he had to make a Safe Harbor payment into the Profit Sharing Plan for me in the amount of 3% of my compensation. Since it was not addressed in my employment agreement, he pressured me to reimburse the 3% payment. Each year since I have done so, with $500 deducted from my pre-tax compensation calculation ever two weeks. To my knowledge, no one else at the firm has been required to do so but nearly all others are salaried employees. I am starting to think this practice violates the Safe Harbor rule and is not legal. That is, it seems this does qualify as a Safe Harbor contribution if the employer is reimbursed for the entire payment. Am I right? If so, what is the proper way to address it?"

"ESOP has a rebalancing provision that requires year-end reallocation so that each participant's account is made up of the same ratio of company stock to other investments. For the first time, there is an ESOP participant who wishes to sell company stock he/she owns outside the ESOP. The ESOP Trustees believe it would be in the best interest of participants and beneficiaries for the ESOP to purchase the stock.

IRC Section 409(n) provides in part that: 'no portion of the assets of the plan . . . attributable to (or allocable in lieu of) employer securities acquired by the plan . . . in a sale to which section 1042 applies may accrue (or be allocated directly or indirectly . . .) . . . for the benefit of . . . any taxpayer who makes an election under section 1042(a) with respect to employer securities.'

Assume that the ESOP's acquisition of the stock is completed in May of 2020. When the 'regular' calendar year 2020 allocation is done (in the spring of 2021), certainly the selling shareholder cannot receive an allocation of any portion of the stock the ESOP acquired from him/her. So, such participant receives a smaller allocation than that received by a similarly situated participant who had not sold company stock to the ESOP in a sale to which section 1042 applied.

Immediately after completing the 'regular' allocation for 2020, the rebalancing provision is addressed. May the selling shareholder's account receive the allocation of additional company stock needed to bring his/her account into balance (ratio of company stock to other investments) assuming the reallocation calculations would so require? Inasmuch as the rebalancing would likely affect virtually all participants in one way or another, it would seem that the prorata portion of the stock initially acquired by the ESOP in the 1042 transaction that might find its way to the selling shareholder's account would be minimal.

Is the answer any different for the rebalancing that would be completed for 2021 (in the spring of 2022) -- assuming no additional 1042 transactions?"