Pension Distribution Answer Book, 2013 Edition

Pension Distribution Answer Book delivers fast, easy-to-understand guidance for interpreting statutes and regulations and complying with burdensome distribution tax and reporting rules. Stay current with the hundreds of regulations pertaining to qualified plan distributions.

Pension Distribution Answer Book guides you through the maze of legal, administrative, and tax requirements for all types of distributions...and delivers the facts you need to solve a problem, answer a question, make a decision, or simply find out what the experts think.

This practical reference keeps you current on:

• Plan disqualification
• Highly compensated employees
• Rollover distributions
• Discrimination rules
• Transfers
• Lump sum distributions
• Loans
• And much more!

The 2013 Edition of Pension Distribution Answer Book has been updated to include:

• Discussion of Revenue Ruling 2012-4 and how the Section 415(b) defined benefit limits are affected by annuity benefits elected to be paid from rollover accounts
• Coverage of proposed Section 417(e) regulations that explain minimum lump sum rules applicable to bifurcated benefits (i.e., elections to have benefits paid as a combination of an annuity and a lump sum)
• Analysis of longevity annuities and qualifying longevity annuity contracts and their impact on required minimum distributions rules within proposed Section 401(a)(9) regulations
• Description of Revenue Ruling 2012-3 and the application of QJSA and QPSA rules to investments in deferred annuity contracts
• Analysis of Revenue Ruling 2012-4, 2012-8 I.R.B. 386, describing the circumstances under which a defined benefit pension plan may accept a direct rollover from a defined contribution plan maintained by the same employer and provide an annuity attributable to the amount directly rolled over
• Discussion of Watson v. Commissioner, in which the Tax Court ruled that the age 55 exception under Section 72(t)(2)(A)(v) to the 10 percent additional income tax on early distributions applies only if the participant is at least age 55 when he or she separates from service
• Analysis of Private Letter Ruling 201147038, which holds that sham retirements may not trigger distributions of early retirement benefits from defined benefit pension plans
• Description of the change in the District of Columbia's income tax withholding rules applicable to qualified retirement plan distributions
• Coverage throughout of new submission requirements for requests for IRS determination and new scope of favorable determination letters

• 1. In-Service Distributions
  • Profit Sharing Plans
  • Hardship Distributions
  • Pension Plans
  • Employee Stock Ownership Plans
• 2. Loans
  • General Rule: Loans from Qualified Employer Plans Treated as Taxable Distributions
  • Treatment of Distributions Attributable to Qualified Retirement Plan Loans
  • Special Loan Rules for Certain Hurricane Victims
  • Loans As Prohibited Transactions
  • Spousal Consent for Loans Made by Plans Subject to the Survivor Annuity Requirements
  • Federal Truth-in-Lending Act
• 3. QDROs and Other Exceptions to the Anti-Alienation Rules
  • General Rules and Definitions
  • Form or Amount of Benefits May Not Be Altered
  • How QDROs Affect Other Retirement Plan Benefits; Section 415 Requirements
  • Alternate Payee's Retirement Plan Benefits Must Be Clearly Specified
  • QDROs Must Specify the Benefit Period and the Retirement Plan
  • Retirement Plan Provisions and Written Procedures for Determining the Qualified Status of a DRO
  • Procedures to Follow After a Retirement Plan Receives a DRO
  • Taxation of Retirement Plan Distributions Made Under QDROs
  • Official Guidance on Drafting, Reviewing, and Administering QDROs
  • Permitted Offsets of Retirement Plan Benefits
• 4. Required Minimum Distributions
  • Waiver of 2009 Required Minimum Distributions
  • Minimum Distribution Requirement in General
  • Distributions Beginning During a Participant's Lifetime
  • Death Before Required Beginning Date
  • Determination of the Designated Beneficiary
  • Required Minimum Distributions from Defined Contribution Plans
  • Required Minimum Distributions from Defined Benefit Plans and Annuity Contracts
  • Rollovers and Transfers
  • Special Rules
• 5. Corrective Distributions
  • Excess Contributions
  • Excess Aggregate Contributions
  • Excess Elective Deferrals
  • Excess Annual Additions
• 6. Taxable Life Insurance Costs
  • Incidental Limits
  • Discrimination Rules
  • Calculation of Taxable Insurance Costs (PS-58 Costs)
• 7. Bankruptcy
• 8. Vesting
  • General Vesting Rules
  • Top-Heavy Rules
  • Determination of Top-Heavy Status
  • Death Benefits, Rollovers, and Transfers
  • Key Employees
  • Top-Heavy Vesting Schedules
  • PPA Changes
  • Determination of Vesting Years
  • Breaks in Service
  • Amendments in Vesting Schedules
  • Forfeitures and Cash-Out Rules
  • Required Vesting upon Plan Termination, Partial Termination, or Complete Discontinuance of Contributions
• 9. Administrative Determination of Benefits
  • Determining Account Balances in Defined Contribution Plans
  • Cash-Out Rules
  • Underfunded Defined Contribution Plans
  • Determining Accrued Benefits in Defined Benefit Plans
  • Determination of Accrual of Service
  • Benefit Minimums and Limitations
  • Lump-Sum Determination
  • Determining Benefits in Non-Traditional Plans
• 10.Optional Forms of Benefit and Protected Benefits
  • NondiscriminationRules Under Code Section 401(a)(4)
  • Permissive Aggregation of Certain Benefits, Rights, or Features
  • Code Section 411(d)(6) Protected Benefits
• 11. QJSA and QPSA Rules
  • Retirement Plans Subject to Survivor Annuity Requirements
  • Transferee, Offset, Frozen, and Terminated Plans
  • Applying Survivor Annuity Requirements to Participants
  • Annuity Starting Date
  • Benefits
  • Timing of QJSA Distributions
  • Rules Governing the QPSA
  • Applying Survivor Annuity Requirements to Plan Loans
  • Applying Survivor Annuity Requirements to Unmarried Participants, Surviving Spouses, and Participants
  • Who Have a Change in Marital Status
  • Spousal Consent Requirement
  • Participant's Waiver of a QPSA or QJSA
  • Notice Requirements
  • Subsidized Survivor Benefits
• 12. Retirement, Disability, and Death
  • Normal Retirement
  • Early Retirement
  • Late Retirement
  • Phased Retirement
  • Suspension of Benefits
  • Disability Benefits
  • Disability Benefits in Defined Contribution Plans
  • Disability Benefits in Defined Benefit Plans
  • Death Benefits in Defined Contribution Plans
  • Death Benefits in Defined Benefit Plans
  • Required Minimum Distribution Rules
• 13. Other Termination Issues
  • General Considerations
  • ESOPs
  • Suspension of Benefits
  • Claims for Benefits
• 14. Restrictions on Distributions
  • Historical Perspective
  • Application of TRA '86 Rules
  • Use of Collateral Agreements
  • PPA Rules on Restricted Distribution
• 15. Plan Termination Issues
  • General Requirements
  • Defined Contribution Plans
  • Defined Benefit Plans
  • Liquidating Plan Assets
  • Surplus Assets
  • Distribution of Election Forms
  • Final Disclosure Forms
  • Abandoned Defined Contribution (Orphan) Plans
• 16. The Termination Process for PBGC-Covered Plans
  • Coverage
  • PBGC Termination Steps
  • Notice of Intent to Terminate
  • Preliminary Information for PBGC
  • Measurement of Benefit Liabilities
  • Insufficiency of Plan Assets
  • Actions of Plan Sponsor
  • ERISA Section 204(h) Notice
  • Information Gathering
  • Notice of Plan Benefits
  • Final Stages
  • When the Plan Has Surplus Assets
  • Missing Participants
  • Post-Distribution Certification
  • Spinoff/Termination Transaction Rules
  • Final Returns/Reports
• 17. Underfunded Plans
  • Underfunded PBGC-Covered Defined Benefit Plans .
  • Involuntary Terminations
  • PPA Requirements for Distress and Involuntary Terminations
  • Defined Benefit Plans Not Covered by the PBGC
  • Making Contributions to Meet Plan Liabilities
  • Underfunded Defined Contribution Plans
• 18. Taxation of Periodic Payments
  • Understanding Basic Concepts
  • Simplified Method of Basis Recovery and Transition Rule
  • Fully Taxable Annuity Payments
• 19. Taxation of Nonperiodic Payments
  • Annuity Starting Date
  • Various Types of Taxable Distributions and Transfers
  • Lump-Sum Distributions
  • Five-Year Forward Income Averaging
  • Ten-Year Forward Income Averaging
  • Capital Gains Treatment
  • Special Lump-Sum Distribution Issues
• 20. Additional Taxes
  • Additional 10 Percent Income Tax on Early Distributions
  • 50 Percent Excise Tax on Failure to Make Required Minimum Distributions
• 21. Direct Rollovers
  • Direct Rollover Option Required
  • Eligible Rollover Distributions
  • Section 402(f) Rollover Notice
  • Rollover Contributions by Employees Not Yet Eligible to Participate in a Qualified Plan
  • Other Direct Rollover Issues
• 22. State Income Tax Withholding and FICA and FUTA Treatment
  • Survey of State Income Tax Withholding Rules
  • FICA and FUTA Treatment of Qualified Plan Distributions
  • State "Source" Taxation of Retirement Benefits
• 23. Plan Disqualification and Self-Correction Programs
  • Disqualification Events
  • Alternatives to Plan Disqualification - SCP, VCP, and Audit CAP
  • Program Eligibility
  • Consequences of Plan Disqualification
• 24. Federal Income Tax Withholding
  • Federal Income Tax Withholding on Eligible Rollover Distributions That Are Not Rolled Over
  • Federal Income Tax Withholding on Periodic and Nonperiodic Payments That Are Not Eligible Rollover Distributions
• 25. Distributions in Kind
  • In General
  • Optional Form of Benefit Rules
  • Operational Rules
  • Withholding Requirements
  • Rollover Rules
  • Treatment of Insurance Contracts
  • Distribution of Employer Securities
• 26. Trustee-to-Trustee Transfers
  • Retirement Plan Mergers, Consolidations, and Asset Transfers
  • Application of the Merger, Consolidation, and Transfer Requirements to Retirement Plan Spinoffs
  • Retirement Plan Mergers
• 27. Reporting Distributions: Form 1099-R
  • General Requirements
  • Line-by-Line Explanation
  • Electronic Filing
  • Correcting Form 1099-R
  • Combined Federal/State Filing Program
• 28. Rollovers
  • Review of the Basics
  • Conduit IRAs
  • Challenges in IRA Rollovers
  • Advantages and Disadvantages of IRA Rollovers
  • Roth IRAs
• 29. Lump-Sum Distributions
  • Review
  • Calculating Taxable Amounts
  • Economic Issues
  • Impact of Other Taxes
  • Advantages and Disadvantages of Lump-Sum Distributions
• 30. Maximizing Retirement Benefits
  • Basic Principle of Retirement Plan Accumulation
  • Avoiding or Minimizing the 10 Percent Additional Income Tax on Early Distributions
  • Stretch-Out Payments
  • Naming a Charity as Beneficiary
• APPENDIX A. 120 Percent of Federal Midterm Rate
• APPENDIX B. Pre-GATTSection 417(e) Interest Rates
• APPENDIX C. 30-Year Treasury Securities Rates
• APPENDIX D. Single Life Table
• APPENDIX E. Joint Life and Last Survivor Table
• APPENDIX F. Mortality Tables
• APPENDIX G. Determination of HCEs
• APPENDIX H. Minimum Percent Value Segment Rates
• Tables
• Cases
• Internal Revenue Code Sections
• Treasury Regulations