"I am trying to understand which event triggers taxation - vesting or when the SRF lapses. For instance, if the document states a participant is 0% vested until attainment of Normal Retirement Age (age 65 in the document) and also that the participant will forfeit 100% of the account if no longer employed on 1/1/2026, when is the participant taxed if the participant is age 52 as of 1/1/2026 and still employed as of 1/1/2026. On the one hand, I think he's taxed because the SRF lapsed on 1/1/2026; on the other, he isn't vested in the funds yet because he hasn't attained NRA (but he will no longer lose the right to the funds, since the SRF lapsed. He's merely got to wait until he reaches age 65)."

[Sponsored]

Unlock success in 2024 with our seasoned team's 20+ years of expertise in Financial, Retirement, and Government sectors. Partner with us to conquer challenges in Business, Technology, and Workforce. Experience firsthand why our clients stay engaged.

"Plan provides for nonelective employer contributions and permits an election with respect to the time and form of payment. For a newly eligible employee, it seems the 30-day rule would apply to permit an election regarding time and form of payment within 30 days of initial eligibility. The 30-day rule includes the requirement that the deferral election can only apply to compensation paid for services performed after the election. If the only contributions are nonelective employer contributions (thus the employee can't choose whether or not to defer it to the plan), does the requirement that the election apply to compensation paid for services performed after the election have any application? In other words, if the employee becomes eligible on March 1 and makes a time and form of payment election within 30 days of March 1, and the employer makes a $5,000 discretionary contribution on November 1 -- is the time and form of payment election applicable to all of the $5,000 discretionary contribution?"

"We have a participant that wants to take multiple in-service distributions within a calendar year. In early 2023, he took an in-service distribution against his 2022 principal credit. He recently received his 2023 principal credit and now wants to take another in-service distribution. He is in his mid-60s and I can't find anything in the plan document that prohibits this (the document is silent on this topic other than to say in-service distributions are permitted). But it just doesn't feel right to me. Does anyone know if this is legal?"

"Does anyone have a form for the beneficiary. He must select form of payment from a DB plan."

"If a nongovernmental and nonchurch charitable organization prefers to make available voluntary-only wage-reduction arrangements to buy a contract with Internal Revenue Code Section 403(b) Federal income tax treatment and do so without establishing or maintaining a plan that would be ERISA-governed, such an employer prefers to avoid discretionary decision-making. That includes avoiding discretion about whether a participant has a hardship withing the meaning of Section 403(b)(7)(A)(i)(V) or Section 403(b)(11)(B). Many public-school employers too prefer to avoid involvement in those decisions. Are 403(b) insurers and custodians allowing a participant to self-certify her hardship? Does allowing self-certification help remove not only an employer but also an insurer or custodian from discretionary decisions about hardships? What's happening in the real world?"

"Anyone else received one of these? Client submitted a fully completed and signed 5330 for late deposits of 401(k) deferrals. Client received an IRS letter, from Ogden. No form #. The letter states that the 5330 was unsigned,, doesn't say whether the PT was Discrete or other than Discrete, didn't give the amount of the PT, doesn't indicate whether you corrected all of the PT's. Of course, ALL of these items were completed, and completed properly. They give you the option of checking the boxes and completing a couple of items, and signing a declaration that the form is true, correct, and complete. BUT, they tell you NOT to include a copy of the original for 5330, unless you are correcting/amending it, which of course you aren't, because it was correct and complete in the first place. So, you are left with the choice of completing their form, or calling, which is likely to take hours and probably get wrong info anyway."