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DAILY VALUATION
* Effect on allocation of earnings to defined contribution plan account balances, (Ch3A/SecII/PtM.5.)
DAVIS-BACON ACT
* Annualization requirement, (Ch1A/Def-DavisBaconAct/PtF.1.)
* Definition of Davis-Bacon Act, (Ch1A/Def-DavisBaconAct)
* Plans designed to satisfy prevailing wage laws under Davis-Bacon Act, see DAVIS-BACON PLANS
* Preemption issues for state prevailing wage laws, see ENFORCEMENT OF ERISA
* Prevailing wage, (Ch1A/Def-DavisBaconAct/PtC.2.)
* State prevailing wage laws, (Ch1A/Def-DavisBaconAct/PtF.1.)
DAVIS-BACON PLANS
* Definition of Davis-Bacon plan, (Ch1A/Def-DavisBaconAct)
* QNECs under Davis-Bacon plans have special rule for determining disproportionateness for ADP/ACP testing purposes, (Ch11/SecIX/PtA.9.a.10))
* Using qualified plan to satisfy prevailing fringe benefit obligation, (Ch1A/Def-DavisBaconAct/PtE)
DB-K PLAN, see ELIGIBLE COMBINED PLAN
DEADLINES, EXTENSION OF UNDER WEEKEND/HOLIDAY RULE, see FILING DATES/PERFORMANCE OF ACTS
DEATH BENEFITS
* Beneficiary
- Alternate payee under a QDRO: beneficiary designation rights under certain forms of payment, (Ch1B/Def-QDRO/PtG)
- Definition of beneficiary, (Ch1A/Def-Beneficiary)
- Designation of beneficiary, (Ch6/SecV/PtA.1.)
◆ "Designated beneficiary" as defined term under minimum distribution rules, (Ch6/SecVII/PtC)
◆ Plan procedures for designating a beneficiary, (Ch6/SecV/PtA.1.f.)
◆ Power of attorney holder: ability to change beneficiary designation, (Ch6/SecV/PtA.1.d.)
- Electronic media: use in beneficiary designations, (Ch6/SecV/PtB.8.)
- Former spouse named as beneficiary, (Ch6/SecV/PtB.3.d.)
- Incapacitated beneficiary, (Ch6/SecV/PtA.1.b.3))
- Interpleader action to determine proper beneficiaries, (Ch6/SecV/PtB.3.e.)
- Minor named as beneficiary, (Ch6/SecV/PtA.1.b.2))
- Spouse as beneficiary, (Ch6/SecV/PtB.1.) (QPSA), (Ch6/SecV/PtB.1.) (spousal benefit under plan exempt from QJSA rules)
* Community property interest
- Nonparticipant spouse who predeceases participant cannot make testamentary transfer of interest, (Ch6/SecV/PtB.6.)
* Death benefit income exclusion, see TAXATION OF BENEFITS below
* Disclaimer of benefits, (Ch6/SecV/PtB.1.c.3)b)), (Ch6/SecV/PtB.1.c.3)b))
- Disclaimer by beneficiary's executor, (Ch6/SecV/PtB.3.c.1))
* Forfeiture upon death, see VESTING RULES
* Former spouse named as beneficiary, (Ch6/SecV/PtB.3.d.)
- Enforcement by heirs of former spouse's waiver of benefits after benefits have been distributed to the former spouse, (Ch6/SecV/PtB.3.d.1)c))
- Existence of a current spouse, (Ch6/SecV/PtB.3.d.5))
- Kennedy case from Supreme Court generally defers to beneficiary designation
◆ Impact of Kennedy case, (Ch6/SecV/PtB.3.d.2))
- Rights cannot be relinquished by State law, (Ch6/SecV/PtB.3.d.2)b))
* Immediate distribution may be made to death beneficiary without beneficiary's consent, (Ch6/SecV/PtB.5.)
- Consent required for distribution of QPSA to surviving spouse before participant would have reached NRA, (Ch6/SecV/PtB.1.d.1))
* Income in respect of decedent, see TAXATION OF BENEFITS below
* Interpleader action to determine proper beneficiaries, (Ch6/SecV/PtB.3.e.)
* Life insurance benefits, see INSURANCE
* Lump sum distribution, income averaging election for, see LUMP SUM DISTRIBUTIONS
* Military service
- Death occurring during military service (HEART Act rule), (Ch3B/SecVII/PtI.1.)
* Minimum distributions required after participant's death, see MINIMUM DISTRIBUTION RULES
* Minors as beneficiaries, (Ch6/SecV/PtA.1.b.2))
* Notice and consent requirements relating to the payment of death benefits
- Not applicable to death beneficiary except for QPSA payable to spouse, (Ch6/SecV/PtB.5.)
* Postretirement death benefits, (Ch6/SecV/PtC)
* Premature distribution penalty: exception for death benefits, (Ch7/SecXIV/PtH)
* Preretirement death benefits, (Ch6/SecV/PtB)
- Non-QPSA portion of death benefit, (Ch6/SecV/PtB.3.a.1))
- Non-spouse death benefits, (Ch6/SecV/PtB.3.)
- Qualified preretirement survivor annuity (QPSA), see J&S RULES
- Spousal benefit for plans exempt from QJSA rules, see J&S RULES
* QDRO: order may affect payment of death benefits, (Ch6/SecV/PtB.3.d.4))
* Rollover of, see ROLLOVER RULES
* Roth conversions by beneficiaries, see ROTH CONVERSIONS
* Security interest against death benefit for participant loan, (Ch6/SecV/PtD)
* Surviving spouses, death benefits required for, see J&S RULES
* Surviving spouse, rollover option for, see ROLLOVER RULES
* Taxation of death benefits
- Basis recovery continues with beneficiary, (Ch7/SecXIV/PtA.1.)
- Beneficiary liable for income tax, (Ch7/SecXIV/PtA)
- Death benefit exclusion repealed for decedents dying after August 20, 1996, (Ch7/SecXIV/PtC)
- Income in respect of decedent for federal tax purposes, (Ch7/SecXIV/PtB)
* Withholding on death benefits, (Ch7/SecXIV/PtE)
* Wrongful denial of distribution before participant's death resulted in payment being asset of estate and not treated as death benefits, (Ch7/SecXIV/PtA.5.a.)
DEBT-FINANCED PROPERTY, see UBTI
DECLARATORY JUDGMENT BY TAX COURT, see APPROVAL PROCESS
DEDUCTIBLE EMPLOYEE CONTRIBUTIONS, see EMPLOYEE CONTRIBUTIONS
DEDUCTION LIMITS
* Affiliated service groups, see Related employers below
* Carryforward of nondeductible contributions, see Pension plans and (Ch3A/SecII/PtE) below
* Compensation
- Definition of compensation used to determine deduction limits, (Ch1A/Compensation/PtE)
- Earned income used for self-employed individuals, (Ch7/SecXVI/PtB.1.e.)
* Compensation dollar limit applies to determine deduction limits, (Ch7/SecXVI/PtF.1.)
* Controlled groups, see Related employers below
* Credit carryovers, see (Ch3A/SecII/PtE) below
* Credit, in lieu of business deduction, for certain start up costs relating to small plans (IRC §45E), see TAX CREDITS
* Defined benefit plans: deductibility of employer contributions
- Carryforward of nondeductible contributions, (Ch7/SecXVI/PtC.6.)
◆ Deductions following plan termination, (Ch7/SecXVI/PtC.8.c.)
- Forfeitures: effect on money purchase plan deduction limit (pre-2002 years), (Ch7/SecXVI/PtC.2.f.2))
- Full funding limit, see Pre-2008 deduction rules below
- MAP-21 rates are not applicable to maximum deduction calculation, (Ch7/SecXVI/PtC.1.a.2)
◆ Option to use MAP-21 to determine asset values for deduction limit purposes, (Ch6/SecIII/PtC.3.a.1)b)ii)
- Minimum funding amount is deductible, (Ch7/SecXVI/PtC.7.) (post-2007), (Ch7/SecXVI/PtC.1.) (pre-2008)
- Overstatement of pension contributions subject to penalty, (Ch7/SecXVI/PtL.6.)
- Plan termination: deduction of carryovers in later years, (Ch7/SecXVI/PtC.8.c.)
- Pre-2008 deduction rules, (Ch7/SecXVI/PtC.2.)
- Post-2007 deduction rules
◆ Cushion amount, (Ch7/SecXVI/PtC.1.b.)
. . . Limitation on small plans, (Ch7/SecXVI/PtC.1.b.1))
◆ Plans that are not subject to the at-risk funding requirements, (Ch7/SecXVI/PtC.1.a.1))
◆ Unfunded 404(o) amount, (Ch7/SecXVI/PtC.1.a.)
- Retroactive amendments may affect deduction limit under certain circumstances, (Ch7/SecXVI/PtC.3.)
◆ 2½-month rule, (Ch7/SecXVI/PtC.3.a.)
- Self-employed individual, special calculations for, see SELF-EMPLOYED INDIVIDUALS below
- Tax year different from plan year, (Ch7/SecXVI/PtC.7.)
* Defined contribution plans: deductibility of employer contributions
- Aggregation of all defined contribution plans to compute limit, (Ch1A/Compensation/PtE)
- Carryforward of nondeductible amount, (Ch7/SecXVI/PtB.8.)
◆ Deduction of carryovers after plan terminates, (Ch7/SecXVI/PtB.8.c.)
- Compensation used to compute deduction limit, (Ch1A/Compensation/PtE)
◆ Aggregation of all participants' compensation, (Ch7/SecXVI/PtB.2.)
◆ Eligibility to defer under 401(k), (Ch7/SecXVI/PtB.5.a.1)), (Ch7/SecXVI/PtB.5.a.1))
◆ "Grossed up" for elective deferrals, (Ch7/SecXVI/PtB.1.a.)
◆ Imputed compensation for certain disabled participants, (Ch7/SecXVI/PtB.1.b.)
- Credit not given for failure to utilize maximum deduction ("use it or lose it"), (Ch7/SecXVI/PtB.7.)
- Discretionary contribution amount does not have to be determined by end of employer's tax year, (Ch7/SecXVI/PtE.6.)
- ESOP: Special deduction rules, (Ch7/SecXVI/PtI)
- Forfeitures do not reduce deduction limit, (Ch7/SecXVI/PtB.9.)
◆ Forfeitures might reduce amount employer is allowed to contribute under a fixed contribution formula, (Ch7/SecXVI/PtB.9.a.)
- Limit based on percentage of combined compensation of all participants, (Ch7/SecXVI/PtB.2.)
- Money purchase plans: how 25% limit applies, (Ch7/SecXVI/PtB.2.c.)
◆ Treasury may create exceptions to 25% limit, (Ch7/SecXVI/PtB.2.c.3))
- Nondeductible contributions: administrative treatment, (Ch7/SecXVI/PtB.8.b.)
- Participants included in deduction limit calculation, (Ch7/SecXVI/PtB.5.)
◆ Eligible to make elective deferrals under section 401(k) arrangement, (Ch7/SecXVI/PtB.5.a.1))
◆ Top heavy minimum allocation to participant, (Ch7/SecXVI/PtB.5.c.4))
- Plan termination: deduction of contribution carryovers in years following the termination, (Ch7/SecXVI/PtB.8.c.)
- Self-employed individual, special calculations for, see SELF-EMPLOYED INDIVIDUALS below
- SEP: coordination with §404(a)(3) deduction limit, (Ch7/SecXVI/PtB.10.)
- SIMPLE-401(k) plans exempt from §404(a)(3) limit, (Ch7/SecXVI/PtB.10.b.)
- SIMPLE-IRA plans not taken into account under §404(a)(3) limit, (Ch7/SecXVI/PtB.10.b.)
- Stock bonus plans subject to same limits, (Ch7/SecXVI/PtB)
- Tax year different from plan year, (Ch7/SecXVI/PtC.7.)
◆ Choice of plan year for allocation, (Ch7/SecXVI/PtB.4.b.)
* ESOP: Special deduction rules, (Ch7/SecXVI/PtI)
* Limited liability companies usually taxed as partnerships and must apply deduction rules accordingly, (Ch7/SecXVI/PtH.12.)
* Make-up contributions to restore losses to plan, (Ch13B/SecVI/PtB.1.)
* MAP-21 segment rates not applicable to deduction limit calculations, (Ch7/SecXVI/PtC.1.a.2)
* Matching contributions must relate to elective deferrals that are attributable to compensation earned by end of tax year for which deduction is taken, (Ch7/SecXVI/PtB.3.d.)
* Military service: deductibility of make-up contributions, (Ch7/SecXVI/PtM.2.)
- Compensation for computing deduction limit for profit sharing plan, (Ch7/SecXVI/PtM.2.a.1))
- Limits in effect for year make-up contribution relates to are applied, (Ch7/SecXVI/PtM.2.)
- Make-up contribution does not affect deductibility of contributions made for current year, (Ch7/SecXVI/PtM.2.)
- Section 404(a)(6) period not extended, (Ch7/SecXVI/PtM.2.c.)
* Money purchase plans, contributions to, see Pension plans below
* Multiple employer plan, calculation of deduction limit for employers maintaining, see MULTIPLE EMPLOYER PLAN
* Noncash contributions, (Ch7/SecXVI/PtN)
- Loss not recognized, (Ch7/SecXVI/PtN.4.)
- Prohibited transaction issues, (Ch7/SecXVI/PtN.5.)
- Taxable gain for appreciated property, (Ch7/SecXVI/PtN.3.)
* Nondeductible contributions
- Carryforward subject to excise tax if not deductible in subsequent year, (Ch7/SecXVI/PtL.3.)
- Deduction of nondeductible amount in later years, (Ch7/SecXVI/PtB.8.), (Ch7/SecXVI/PtC.6.), (Ch7/SecXVI/PtB.8.)
- Domestic workers may be covered by SIMPLE-IRA plan: relief from excise tax on nondeductible employer contributions, (Ch7/SecXVI/PtL.5.g.)
- Exceptions to excise tax
◆ Contributions to DC plan that are not deductible because of IRC §404(a)(7), (Ch7/SecXVI/PtL.5.d.)
◆ Disregarding certain defined benefit plan contributions, (Ch7/SecXVI/PtL.5.e.)
◆ Pre-1987 contributions, (Ch7/SecXVI/PtL.5.c.)
◆ Self-employed individuals
. . . Defined benefit plan contributions that do not exceed pre-deduction earned income, (Ch7/SecXVI/PtL.5.b.1))
. . . Insurance purchased with contributions made on behalf of self-employed individual, (Ch7/SecXVI/PtL.5.b.2))
◆ Tax-exempt and governmental employers, (Ch7/SecXVI/PtL.5.a.)
- Excise tax explained, (Ch7/SecXVI/PtL)
- Form 5330 used to pay excise tax, (Ch7/SecXVI/PtL.4.)
- Returning contributions to employer to avoid excise tax, (Ch7/SecXVI/PtL.2.)
- Tax-exempt employer can contribute to profit sharing plan in excess of §404(a)(3) limit without incurring excise tax, (Ch7/SecXVI/PtL.5.a.)
* Non-pension plans, see Defined contribution plans above
* Options on employer securities: deduction for contributions of options, (Ch7/SecXVI/PtN.2.)
* Overlapping participation in two or more plans, special deduction limit for (IRC §404(a)(7)), (Ch7/SecXVI/PtD)
- 6% cushion for DC plan contributions in post-2005 years, (Ch7/SecXVI/PtD.1.c.)
- 25% limit, (Ch7/SecXVI/PtD.1.)
- Carryover of nondeductible contributions, (Ch7/SecXVI/PtB.8.)
- Defined benefit minimum funding is fully deductible, even if it exceeds 25% limit, (Ch7/SecXVI/PtD.1.)
- Elective deferrals under 401(k) do not count against the limit, (Ch7/SecXVI/PtD.1.b.)
- IRC §414(k) plans: application of IRC §404(a)(7), (Ch7/SecXVI/PtD.9.)
- Multiemployer plans disregarded in post-2005 years, (Ch7/SecXVI/PtD.1.e.)
- Nonidentical participation in plans being aggregated, (Ch7/SecXVI/PtD.2.b.1))
- Overlapping situations that are subject to IRC §404(a)(7), (Ch7/SecXVI/PtD.2.)
- PBGC-covered plans disregarded when determining limit in post-2007 years, (Ch7/SecXVI/PtD.1.d.)
- Separate limits applicable to particular plan cannot be exceeded, (Ch7/SecXVI/PtD.3.)
- Timing of contributions to minimize effect of §404(a)(7), (Ch7/SecXVI/PtD.1.)
* Overstatement of pension contributions, see Pension plans below
* Pension plans: contributions to, see Defined benefit plans above
* Plan design: relationship to deduction limits, (Ch7/SecXVI/PtP)
- More than one participant in plan, (Ch7/SecXVI/PtP.3.)
- One person plans, (Ch7/SecXVI/PtP.2.)
- Section 401(k) may be appropriate for one person plan, (Ch7/SecXVI/PtB.3.f.)
* Plan expenses paid by employer: deductibility, (Ch7/SecXVI/PtO)
- Brokers' commissions, (Ch7/SecXVI/PtO.2.)
- Qualification issues, (Ch7/SecXVI/PtO.3.)
- Reimbursement of trust, (Ch7/SecXVI/PtO.1.)
* Plan must generally be in existence by end of tax year in order for contributions to be deductible for that year, (Ch7/SecXVI/PtE.5.)
- SECURE Act allows adoption by due date of tax return for years after 2019, (Ch7/SecXVI/PtE.5.)
- Time when related group member must adopt plan, (Ch7/SecXVI/PtK.1.f.)
* Plan termination: deduction issues, (Ch7/SecXVI/PtB.8.c.), (Ch7/SecXVI/PtB.8.c.)
* Profit sharing plans: deductibility of employer contributions, see Defined contribution plans above
* Promissory note from employer not deductible, (Ch7/SecXVI/PtN.6.)
* Reimbursement by employer of expenses paid by trust, see Plan expenses paid by employer above
* Related employers, (Ch7/SecXVI/PtK.1.a.)
- Affiliated service groups, (Ch7/SecXVI/PtK.2.)
- Controlled group maintaining same plan, (Ch7/SecXVI/PtK.1.b.)
◆ How to allocate deduction limit, (Ch7/SecXVI/PtK.1.c.)
◆ Pension plans, (Ch7/SecXVI/PtK.1.d.)
◆ Prevented contribution under profit sharing plan, (Ch7/SecXVI/PtK.1.e.3))
◆ Profit sharing plans, (Ch7/SecXVI/PtK.1.e.)
◆ When must controlled group member adopt the plan, (Ch7/SecXVI/PtK.1.f.)
* Restorative contribution to settle potential fiduciary claims: deductibility, (Ch13B/SecVI/PtB.1.)
* Retroactive amendments: effect on deduction calculation for pension plan, (Ch7/SecXVI/PtC.3.)
* S corporation
- Dividends deduction not available, (Ch7/SecXVI/PtI.2.f.)
- Exempt loan deduction limit not available for ESOP maintained by S corporation, (Ch7/SecXVI/PtI.1.b.)
* Section 401(k) plans
- Elective deferrals: special rules relating to their deductibility, (Ch7/SecXVI/PtB.3.d.)
- Full deduction of elective deferrals without regard to §404(a)(3) limit, (Ch7/SecXVI/PtB.3.)
- "Gross" compensation used to compute §404(a)(3) limit, (Ch7/SecXVI/PtB.1.a.)
- Matching contributions: special rules relating to their deductibility, (Ch7/SecXVI/PtB.3.d.)
* Section 164(f) deduction, see SELF-EMPLOYED INDIVIDUALS below
* Section 415 limits: deduction disallowed if limits are exceeded, (Ch7/SecXVI/PtF.2.a.)
* Self-employed individuals: calculating qualified plan deductions for contributions on their behalf, (Ch7/SecXVI/PtB.1.e.)
- Algebraic formula, (Ch7/SecXVI/PtH.1.)
- Change in form of entity (e.g., unincorporated business incorporates), (Ch7/SecXVI/PtH.14.)
- Compensation dollar limit: effect on deduction limit, (Ch7/SecXVI/PtH.7.)
- Defined benefit plans, (Ch3A/SecIII/PtB.5.)
◆ 100% earned income limit, (Ch7/SecXVI/PtH.4.a.)
. . . IRS says nondeductible amount due to 100% limit not eligible for carryover, (Ch7/SecXVI/PtH.4.a.1))
- Earned income used to compute deduction limits that are based on compensation, (Ch7/SecXVI/PtB.1.e.)
- Forfeitures: effect on deduction limit, (Ch7/SecXVI/PtH.2.e.)
- Insurance: contributions to purchase insurance for self-employed individual are not deductible, (Ch7/SecXVI/PtD) ( Ch7/SecXVI/PtH.9.)
- Limited liability company members usually treated as self-employed individuals, (Ch7/SecXVI/PtH.12.)
- Money purchase plans, (Ch7/SecXVI/PtH.2.)
- More than one plan maintained for self-employed individual, (Ch7/SecXVI/PtH.5.)
- Multiple trades or businesses, (Ch7/SecXVI/PtD) ( Ch7/SecXVI/PtH.9.)
- Parity with shareholders, (Ch7/SecXVI/PtH.10.)
- Partners: allocation of deduction among partners, (Ch7/SecXVI/PtH.11.)
◆ Defined benefit plan, (Ch7/SecXVI/PtH.11.b.)
◆ Defined contribution plan, (Ch7/SecXVI/PtH.11.a.)
- Profit sharing plan contributions, (Ch7/SecXVI/PtH.1.)
- Section 401(k) plans, (Ch7/SecXVI/PtH.6.)
- Section 415 limit: effect on self-employed individual deduction limit, (Ch7/SecXVI/PtH.1.d.)
- Self-employment taxes: adjustment of earned income for §164(f) deduction, (Ch7/SecXVI/PtH.1.c.)
◆ Special calculations for 2011 and 2012 FICA tax holiday and Medicare surcharge (post-2012), (Ch7/SecXVI/PtH.1.c.3))
- Target benefit plans, (Ch7/SecXVI/PtH.3.)
* SEPs, deduction for employer contributions to, see SEPs
* Short plan year or tax year, (Ch7/SecXVI/PtJ)
- Defined benefit plan, (Ch8/SecIII/PtD.2.)
- Defined contribution plan, (Ch8/SecIII/PtD.1.)
* SIMPLE-IRA plans, deduction for contributions to, see SIMPLE PLANS
* Stock bonus plans, see (Ch3A/SecII/PtE) above
* Substantial overstatement of pension contributions, see Pension plans above
* Successor employers under IRC §381: special deduction rules, (Ch7/SecXVI/PtK.5.)
* Tax credit available to small employers for start up costs relating to plans established after 2001, see TAX CREDITS
* Tax year different from plan year, (Ch7/SecXVI/PtC.7.), (Ch7/SecXVI/PtC.7.)
* Target benefit plans, contributions to, see Pension plans above
* Termination of plan, see Plan termination above
* Timing of contribution (IRC §404(a)(6)), (Ch7/SecXVI/PtE)
- Contribution made during §404(a)(6) period treated as if made on last day of prior tax year, (Ch7/SecXVI/PtE.1.)
- Corporate partner with extended tax return deadline, (Ch7/SecXVI/PtE.2.b.1))
- Disasters resulting in extensions, (Ch7/SecXVI/PtE.4.b.)
- Elective deferrals and matching contributions: special timing rule, (Ch7/SecXVI/PtE.1.d.)
- Extension on return, (Ch7/SecXVI/PtE.2.)
- Minimum funding deadline not extended by tax return extension, (Ch7/SecXVI/PtE.3.)
- Modifications to tax return deadlines, (Ch7/SecXVI/PtE)
- Pension plan contributions made during §404(a)(6) period which exceed the minimum funding requirement for the prior year, (Ch7/SecXVI/PtE.1.e.1))
- Weekend/holiday rule extends deadline for making deductible contributions, (Ch7/SecXVI/PtE.4.)
DEEMED CODA, see SECTION 401(k) PLANS
DEEMED DISTRIBUTIONS
* Collectibles, taxation of certain investments in, see COLLECTIBLES
* Expatriation (relinquishment of U.S. citizenship or permanent residence) can trigger deemed distribution, see EXPATRIATION
* Participant loans that violate §72(p), see PARTICIPANT LOANS
* P.S. 58 costs, see INSURANCE
DEEMED IRA ACCOUNTS, see IRAs, SECTION 403(b) PLANS, SECTION 457 PLANS
DEEMED SECTION 125 COMPENSATION
* Inclusion in IRC §415(c) compensation, (Ch1A/Def-Compensation/PtA.6.e.)
DEFERRAL PERCENTAGE, see ADP AND ACP TESTING
DEFERRED VESTED BENEFITS, see REPORTING REQUIREMENTS (SSA Reporting)
DEFINED BENEFIT PLAN
* Accrual of benefits under a defined benefit plan, see ACCRUAL OF BENEFITS
* Actuarial equivalence, see ACTUARIAL TERMS, DISTRIBUTIONS
* Cash balance plans, (Ch11/SecVI/PtC.1.g.)
* Deduction limits for employer contributions to, see DEDUCTION LIMITS
* Definitely determinable benefit requirement, (Ch3A/SecIII)
- IRS memorandum on definitely determinable benefits under cash balance plans, (Ch3A/SecIII/PtA.6.b.)
- Window benefit amendments do not violate this requirement, (Ch3A/SecIII/PtA.5.a.1))
* Definition of a defined benefit plan, (Ch1A/Def-DefinedBenefitPlan)
* Minimum funding requirements, (Ch1A/Def-EBSA)
* Present value, see DISTRIBUTIONS
* Protected benefit feature, see ANTI-CUTBACK RULE
* Restrictions on distributions, see DISTRIBUTIONS
* Statutory hybrid plans, (Ch11/SecVI/PtC.1.g.)
* Subsidized benefits, see DISTRIBUTIONS
* Surplus assets, see EXCLUSIVE BENEFIT RULE, REVERSION OF PLAN ASSETS TO EMPLOYER, SURPLUS ASSETS
* Suspension of benefits rule, see VESTING RULES (Forfeiture)
* Year of participation, see ACCRUAL OF BENEFITS
DEFINED CONTRIBUTION PLAN
* Accrual of benefits under a defined contribution plan, see ACCRUAL OF BENEFITS
* Definition of a defined contribution plan, (Ch1A/Def-DefinedContributionPlan)
* Earnings on account balances, see ACCRUAL OF BENEFITS
* Protected benefit feature includes defined contribution nature of accrued benefit, see ANTI-CUTBACK RULE
DEFINITELY DETERMINABLE BENEFITS REQUIREMENTS, see ACCRUAL OF BENEFITS, DEFINED BENEFIT PLAN, MONEY PURCHASE PLAN, PENSION PLAN
DEPARTMENT OF LABOR
* Enforcement of Title I of ERISA, see ENFORCEMENT OF ERISA RULES
* Interpretive Bulletins issued by DOL explained, (Ch13A/SecI/B)
DEPENDENT
* Definition of dependent, (Ch1A/Def-Dependent)
- Modified by Working Families Tax Relief Act of 2004, (Ch1A/Def-Dependent)
◆ Modified definition is disregarded for purposes of hardship withdrawals from 401(k) plans, (Ch6/SecIV/PtC.4.b.1)a))
DEPOSIT OF PARTICIPANT CONTRIBUTIONS (INCLUDING 401(k) DEFERRALS), TIMING OF, see PLAN ASSETS
DESIGNATED ROTH CONTRIBUTIONS
* Administrative issues, (Ch11/SecXV/PtA.1.f.1)a))
* ADP testing treats elective deferrals the same, regardless of whether pre-tax or designated Roth, (Ch11/SecXV/PtA.1.)
* Automatic enrollment 401(k) plans that allow for designated Roth contributions, (Ch11/SecXV/PtA.3.b.3))
* Automatic rollover rule under IRC §401(a)(31)(B): application to designated Roth accounts, (Ch7/SecIII/PtI.1.a.1))
* Catch-up contributions, (Ch7/SecIII/PtI.a.1)a))
* Conversion of existing pre-tax deferrals to Roth, (Ch11/SecXV/PtA.1.b.1))
- Internal Roth Conversion (also known as "in-plan Roth conversion") permitted for distributable pre-tax elective deferrals, see ROTH CONVERSIONS
* Designation procedures, (Ch11/SecXV/PtA.1.a.)
* Employer contributions may be designated as Roth contributions (SECURE 2.0), (Ch11/SecXV/PtC.)
* Excise taxes under IRC §4979 apply, (Ch11/SecXV/PtA.2.)
* Five-year rule for determining qualified Roth distributions, (Ch15/SecVI/PtC.4.b.(3)(ii))
- Internal Roth Conversion can start the clock, (Ch11/SecXV/PtA.5.)
* Interim amendment requirements, (Ch11/SecXV/PtA.12.)
* Irrevocability of designation, (Ch11/SecXV/PtA.1.b.1)a))
* Limits apply uniformly to all elective deferrals, whether pre-tax or designated Roth contributions, (Ch7/SecIII/PtI.a.1)a))
* Lost opportunity to make Roth contributions: EPCRS correction method, (Ch15/SecVI/PtC.¶4.b.(3)(a))
* Matching Roth contributions, (Ch7/SecIII/PtI.7.)
* Minimum distribution rules apply to Roth contributions, (Ch11/SecXV/PtA.4.)
* Model amendment issued by the IRS, (Ch11/SecXV/PtC), (Ch11/SecXV/PtC)
* No adjust gross income (AGI) requirements have to be satisfied in order to make designated Roth contributions, (Ch11/SecXV/PtA)
* Reporting and recordkeeping requirements, (Ch11/SecXV/PtA.3.)
* Rollover rules for designated Roth accounts, see ROLLOVERS, ROTH IRAs
* Sample amendment issued by the IRS, see Model amendment issued by the IRS above
* Tax rules applicable to distributions from designated Roth accounts, see TAXATION OF BENEFITS
DIRECTOR OF CORPORATION
* Director's fees treated as self-employment income, see SELF-EMPLOYED INDIVIDUALS
* Fiduciary: status of director as fiduciary, see FIDUCIARY
DISABILITY
* Definition of disability, (Ch7/SecV/PtC.15.e.)
* Disability insurance to continue retirement plan contributions, (Ch6/SecIV/PtC.4.i.)
* Exclusion from gross income for certain disability benefits (IRC §105(c)), see TAXATION OF BENEFITS
DISASTER RELIEF
* 2016 disasters, (Ch7/SecV/PtC.20)
* 2019 to Jan 20, 2020 disaters (Ch7/SecV/PtC.22)
* 2020 disaters (Ch7/SecV/PtC.25)
* California Wildfires (2017), (Ch6/SecIV/PtC.4.k.), (Ch7/SecV/PtC.21), (Ch7/SecIX/PtB.1.e.), (Ch13A/SecV/PtI.5.)
* COVID-19, 6.305 (Ch7/SecV/PtC.24.)(CRDs), 6.306 (Ch7/SecIX/PtB.1.g.)(loans)
* Hardship distribution for federally-declared disasters, (Ch7/SecIV/PtC.4.b.1)d))
* Hurricanes Florence and Michael, (Ch6/SecIV/PtC.4.l.)
* Hurricanes Harvey, Irma and Maria (2017) (Ch6/SecIV/PtC.4.k.), (Ch7/SecV/PtC.21), (Ch13A/SecV/PtI.5.)
* Hurricanes Katrina, Rita, and Wilma
- IRS extensions of certain deadlines, (Ch13A/SecIII/PtF.3.)
- Qualified hurricane distributions, (Ch1A/Def-FilingDates/PtC)
- Participant loan limits increased and 1-year loan suspension permitted for taxpayers affected by hurricanes, (Ch7/SecV/PtC.15.)
- PBGC relief, (Ch1A/Def-FilingDates/PtC.3.c.1)), (Ch1A/Def-FilingDates/PtD.2.), (Ch13A/SecV/PtI.2.)
- Reporting guidance for qualified hurricane distributions, (Ch1A/Def-FilingDates/PtD.2.)
- Tax relief granted by Congress, (Ch13A/SecV/PtI.2.)
◆ Premature distribution penalty relief, (Ch7/SecV/PtC.15.e.1)c))
◆ Rollover period of 3 years, (Ch7/SecV/PtC.15.)
* Hurricane Matthew, (Ch6/SecIV/PtC.4.j.)
* Hurricane Sandy, (Ch7/SecV/PtC.15.)
* Louisiana Storms, (Ch6/SecIV/PtC.4.j.)
* Midwest Storms in 2008, (Ch7/SecV/PtC.15.e.)
* PBGC simplifies process for determining when disaster relief is available under Title IV of ERISA, (Ch13A/SecV/PtI)
* Permanent disaster relief (SECURE 2.0), (Ch7/SecV/PtC.26.)
◆ Premature distribution penalty relief (Ch7/SecV/PtC.26.)
◆ Rollover period of 3 years (Ch7/SecV/PtC.26.)
◆ Loan relief, (Ch7/SecV/PtB.1.i.)
DISCLOSURE TO PARTICIPANTS AND BENEFICIARIES
* Annual funding notice from defined benefit plans (post-2007), (Ch13A/SecVI/PtF.2.b.)
- Content of notice, (Ch3B/SecX/PtD.3.)
- Exceptions to notice requirement, (Ch13A/SecVI/PtF.2.b.6))
- MAP-21/HATFA rates: effect on funding notice, (Ch3B/SecVIII/PtB.3.b.2)f))
- Multiemployer plan plans: pre-2008 notice requirements, (Ch13A/SecVI/PtF.2.b.9))
- Timing of notice, (Ch3B/SecX/PtD.1.)
- Who gets the notice, (Ch13A/SecVI/PtF.2.b.2))
* Automatic contribution arrangements: notice requirement, (Ch13A/SecVI/PtF.7.)
* Benefit restrictions under IRC §436: notice requirement under ERISA §101(j), (Ch3B/SecVIII/PtK.12.) Also see MINIMUM FUNDING REQUIREMENTS
* Blackout periods: advance notice requirements
- Content of notice, (Ch3B/SecX/PtD.3.)
- Definition of blackout period, (Ch1A/Def-BlackoutPeriod)
◆ Exceptions for securities laws, QDROs, (Ch13A/SecVI/PtF.1.f.1))
- Explanation of notice requirements, (Ch3B/SecX/PtD.3.)
- One-participant plans not subject to notice requirement, (Ch13A/SecVI/PtF.1.b.4))
- Sarbanes-Oxley Act: summary, (Ch15/SecIX/PtJ)
* Civil penalties, see Penalty for failure to comply with request for information below
* Communicating the adoption of the plan, (Ch3B/SecX/PtD.3.)
* Defined benefit plans: annual funding notice, see Annual funding notice from defined benefit plans above
* Distributions from plan: notice requirements, see DISTRIBUTIONS
* Diversification rights for DC plan participants invested in publicly-traded employer securities, (Ch13A/SecVI/PtF.8.)
* Electronic media may be used to comply with disclosure requirements, (Ch6/SecIV/PtD.5.), (Ch3B/SecX/PtD.3.)
- Comparison of IRS and DOL rules, (Ch13A/AppD)
- Electronic Signatures in Global and National Commerce Act, (Ch6/SecIV/PtD.5.c.)
- Regulatory guidelines, (Ch3B/SecX/PtD.3.) (IRS), (Ch13A/SecVI/PtG.3.) (DOL)
- Transition guidance for electronic delivery of participant fee disclosures, (Ch13B/SecII/PtJ.1.k.)
* Employee benefit statements, (Ch13A/SecVI/PtD)
- Content requirements, (Ch13A/SecVI/PtD.2.)
◆ Alternative notice regarding vesting, (Ch13A/SecVI/PtF.2.b.)
- Defined benefit plans: alternative method of compliance, (Ch1A/Def-BlackoutPeriod)
- Disclosures made upon request by participant or beneficiary, (Ch13A/SecVI/PtD.4.)
- Good faith compliance standard pending further DOL guidance, (Ch13A/SecVI/PtD.1.g.)
- Lifetime income illustrations required by SECURE Act, (Ch13A/SecVI/PtD.2.e.)
- Manner of furnishing statements, (Ch13A/SecVI/PtD.1.c.)
◆ Continuously available information, (Ch13A/SecVI/PtD.1.c.1))
- One-participant plan exception, (Ch13A/SecVI/PtD.1.f.)
- Penalty for noncompliance, (Ch13A/SecVI/Pt.D.6.)
- Quarterly statements for participant-directed DC plans, (Ch3B/SecX/PtD.3.)
◆ Definition of a participant-directed plan, (Ch13A/SecVI/PtD.1.b.)
◆ Participant loans do not, alone, make plan participant-directed, (Ch13A/SecVI/PtD.1.b.1))
- Form 8955-SSA/Schedule SSA information must be reported to participant included on schedule, (Ch13A/SecVI/PtD.5.)
- Timing rules for issuing benefit statements, (Ch13A/SecVI/PtD.1.d.)
◆ Non-directed DC plans may link timing of delivery to filing of Form 5500, (Ch13A/SecVI/PtD.1.d.1))
- Who must be provided a benefit statement? (Ch13A/SecVI/PtD.1.a.)
* Enforcement of disclosure requirements
- Automatic enrollment notice: penalty for failure to comply, (Ch13A/SecVI/PtF.7.c.)
- Blackout notice: civil penalty for failure to provide, (Ch13A/SecVI/PtD.1.g.)
- Diversification notice: civil penalty for failure to comply, (Ch13A/SecVI/PtF.8.a.)
- Funding notice: civil penalty for failure to provide, (Ch13A/SecVI/PtF.2.b.8))
- Notice of missed funding payments: court may award penalty for noncompliance, (Ch13A/SecVI/PtF.2.a.3))
- Penalty for failure to provide certain employee benefit statements, (Ch13A/SecVI/Pt.D.6.)
- Request for information: civil penalty for failure to provide on timely basis, (Ch3B/SecX/PtD.3.)
- Summary annual report, (Ch13A/SecVI/PtC)
- Summary of material modifications, (Ch13A/SecVI/PtB)
- Summary plan description, (Ch13A/SecVI/PtA)
* ERISA §502(c)(1), see Penalty for failure to comply with request for information below
* Exemptions from Title I disclosure requirements, (Ch13A/SecVI/PtD)
* Fee disclosure requirements for participant-directed DC plans, (Ch13B/SecII/PtJ.1.)
- Annual disclosures must be provided at least once in a 14-month period, (Ch13B/SecII/PtJ.1.b.5)a)i))
- Electronic delivery of fee disclosures, (Ch13B/SecII/PtJ.1.k.)
- ERISA §404(c) plans: additional disclosure requirements, (Ch13B/SecII/PtJ.1.j.)
- General fiduciary obligation to meet disclosure requirements, (Ch13B/SecII/PtJ.1.a.1))
- Investment-related fee disclosures, (Ch13B/SecII/PtJ.1.c.)
- Plan-related fee information that must be disclosed, (Ch13B/SecII/PtJ.1.b.)
- Transition rule for initial fee disclosures, (Ch13B/SecII/PtJ.1.b.5)a)i))
* Fiduciary duties relating to disclosure
- Corporate decisions affecting plan benefits: no duty to make affirmative disclosures unless employer agreed to follow-up, (Ch13B/SecII/PtF.6.d.)
- Discrepancies in benefit statements may result in liability, (Ch13B/SecII/PtF.6.f.)
- Distribution options need to be properly explained, (Ch13B/SecII/PtF.6.g.)
- Duty to disclose future benefit enhancements, (Ch13B/SecII/PtF.6.b.)
- Duty to disclose information, (Ch13B/SecII/PtF.6.)
- Fee disclosure requirements, see Fee disclosure requirements for participant-directed DC plans above
- Follow-up with inquiring participant if fiduciary agreed, (Ch13B/SecII/PtF.6.d.)
- Informing participants about circumstances that might jeopardize benefits, (Ch13B/SecII/PtF.6.e.)
- Misrepresentation or misleading information is a breach of duty, (Ch13B/SecII/PtF.6.c.)
- "Serious consideration" rule, (Ch13B/SecII/PtF.6.c.)
* Form 8955-SSA information (formerly Schedule SSA): disclosure to reported participants, (Ch13A/SecVI/PtD.5.)
* Internal Revenue Code disclosure rules, (Ch13A/SecVI/PtD)
- Adoption of plan must be communicated, see PLAN
- Interested party notice, see APPROVAL PROCESS
- Plan distributions, notices relating to, see DISTRIBUTIONS
* Investment-related fees, see Fee disclosures requirements for participant-directed DC plans above
* Lifetime income illustrations proposal for inclusion on employee benefit statements, (Ch13A/SecVI/PtD.2.e.)
* Manner of complying with disclosure requirements, (Ch13A/SecVI/PtD)
* Minimum funding requirements
- Annual funding notice, see Annual funding notice from defined benefit plans above
- Notice of missed payments, (Ch1A/Def-EBSA)
* Misrepresentations or misleading information provided by fiduciary is breach of duty, (Ch13B/SecII/PtF.6.c.)
* Notice of significant reduction in rate of benefit accrual (ERISA §204(h)), see AMENDMENT OF PLAN
* Notice requirements relating to plan distributions, see DISTRIBUTIONS
* Participant-directed investments, disclosures relating to, see PARTICIPANT-DIRECTED INVESTMENTS
* PBGC disclosure requirements, see Title IV below
* Periodic benefit statements, see Employee benefit statements above
* Plan termination, see Title IV below
* Posting on bulletin board generally not acceptable means of providing disclosure, (Ch13A/SecV/PtI.2.)
* Proof of disclosure, (Ch13A/SecVI/PtD.4.)
* QDRO: notice of receipt by plan administrator, see (Ch1B/Def-QDRO)
* Request by participant or beneficiary for information, (Ch13A/SecVI/PtD)
- Civil penalty for failure to comply within reasonable time, (Ch3B/SecX/PtD.3.)
- No charge for required disclosure items, (Ch13A/SecVI/PtE.2.)
- Reasonable charge permitted for items that are not required to be automatically provided, (Ch13A/SecVI/PtE.1.)
- What information may be requested, (Ch13A/SecVI/PtD.4.)
* SAR, see summary annual report below
* Schedule SSA information, see Form 8955-SSA above
* SEPs: exemption from disclosure requirements, (Ch3B/SecX/PtD.3.)
* Service provider fee disclosures, see (Ch14/SecIII/PtA.2.)
* Significant reduction in future benefit accrual under pension plan: ERISA §204(h) notice requirement, see AMENDMENT OF PLAN
* SIMPLE-IRA plans: exemption from disclosure requirements, (Ch3B/SecX/PtD.3.)
* SMM, see summary of material modifications below
* SPD, see summary plan description below
* Summary annual report, (Ch13A/SecVI/PtC)
- Enforcement of SAR requirement, (Ch13A/SecVI/PtD.4.)
- Foreign language assistance, (Ch13A/SecVI/PtC.1.)
- Repealed after 2007 for Title IV-covered defined benefit plans, (Ch13A/SecVI/PtC.2.)
- When to provide, (Ch3B/SecX/PtD.3.)
* Summary of material modifications, (Ch13A/SecVI/PtB)
- Enforcement of SMM requirement, (Ch13A/SecVI/PtB.7.)
- Interim amendments adopted under IRS procedures, (Ch13A/SecVI/PtB.6.a.)
- Operational compliance with law changes (e.g., PPA 2006), (Ch13A/SecVI/PtB.6.)
- When to provide, (Ch13A/SecVI/PtC.3.)
* Summary plan description, (Ch13A/SecVI/PtA)
- Conflicts between plan and SPD, (Ch13A/SecVI/PtD.5.)
◆ Must detrimental reliance on SPD be proved? (Ch13A/SecVI/PtA.5.c.)
- Content and style of SPD, (Ch13A/SecVI/PtA.1.c.)
- Different SPDs for different classes of participants, (Ch13A/SecVI/PtA.1.d.)
- DOL may request copy of SPD, (Ch13A/SecIV/PtA)
◆ Civil penalties apply if copy not provided upon DOL's request, (Ch13A/SecIV/PtA.2.)
- Enforcement of SPD requirement, (Ch13A/SecVI/PtA.4.)
- Foreign language requirement, (Ch13A/SecVI/PtA.1.b.)
- Initial SPD when plan first established: special deadline rule, (Ch13A/SecVI/PtA.2.c.)
◆ Plan conditioned upon initial IRS qualification may wait until determination letter issued before distributing SPDs, (Ch13A/SecVI/PtA.2.c.1))
- Mergers of plans: special SPD rule, (Ch1A/Def-BlackoutPeriod)
- Operational compliance with law changes: must SPD be updated to reflect elections before plan is amended? (Ch13A/SecVI/PtA.3.b.)
- Updating the SPD, (Ch13A/SecVI/PtA.3.)
- Terminated plan: exception if termination occurs before applicable deadline to furnish SPD, (Ch13A/SecVI/PtA.2.d.)
- When to provide, (Ch13A/SecVI/PtC.3.)
* Title I disclosure requirements, (Ch13A/SecVI)
* Title IV disclosure requirements, (Ch13A/SecVI/PtD)
- PBGC records are disclosed under certain circumstances, (Ch3B/SecX/PtD.3.)
- Penalties for failure to comply, (Ch13A/SecVI/PtD.5.)
- Plan termination disclosures
◆ Additional disclosures for distress and involuntary terminations, (Ch13A/SecVI/PtJ.2.c.)
◆ Foreign language issues relating to termination notices, (Ch13A/SecVI/PtF.2.b.2))
◆ Method of providing notices, (Ch13A/SecVI/PtF.2.b.)
◆ Notice of intent to terminate (NOIT), (Ch13A/SecV/PtI.2.)
◆ Notice of plan benefits, (Ch13A/SecVI/PtJ.2.a.)
- Variable rate premium notice under ERISA §4011 (pre-2007 years), (Ch3B/SecX/PtD.3.)
* Top hat plans: exemption from disclosure requirements, (Ch13A/SecVI/PtH.2.)
* Welfare plans: exemption from disclosure requirements for certain unfunded or insured plans, (Ch13A/SecIII/PtF.3.)
DISCONTINUANCE OF PROFIT SHARING CONTRIBUTIONS, see VESTING RULES
DISCRETION OVER OPTIONAL FORMS OF BENEFIT PROHIBITED, see ANTI-CUTBACK RULE
DISTRIBUTIONS
* 30 to 180 days notice and election periods (90 days before 2007), see Notice and consent requirements below
* 30-year Treasury rates: table of factors, (Ch17/SecIII/PtC.1.b.)
* $7,000 (was $5,000) threshold to determine which notice and consent requirements apply, see Notice and consent requirements below
* Actuarial equivalence, (Ch6/SecIII/PtC)
- Amendment of assumptions used to determine, see ANTI-CUTBACK RULES
- Assumptions used to value optional forms of benefit under DB plan, (Ch6/SecIII/PtC.2.)
- Gender-based assumptions violate sex discrimination laws, (Ch6/SecIII/PtC.2.f.1))
- Payments made before or after normal retirement age, (Ch6/SecIII/PtC.2.c.2))
* Age 59½: distribution before age 59½, see PREMATURE DISTRIBUTION PENALTY
* Age 70½ (or 72, 73 or 75): required distribution after reaching Applicable RMD Age, see MINIMUM DISTRIBUTION RULES
* Agency arrangement: may employer act as agent for plan in issuing distribution checks? (Ch7/SecII/PtB.10.)
* Annuity contract to pay benefits
- Fiduciary duties regarding selection, see FIDUCIARY DUTY
- Form of payment option, see Forms of payment below
- Satisfying joint and survivor annuity requirement, see J&S RULES
* Annuity distributions, see Forms of payment below
* Annuity starting date
- Measurement of notice and consent periods by the annuity starting date, see Notice and consent requirements below
- Retroactive annuity starting date, (Ch6/SecIV/PtD.3.f.)
* Automatic rollover rule for involuntary cashouts of $1,000 to $7,000, see Notice and consent requirements below
* Availability of benefits must be nondiscriminatory, see (Ch3A/SecIII/PtA.1.c.)
* Benefit limits triggered by underfunding (IRC §436), (Ch3B/SecVIII/PtK)
- Distribution restrictions, (Ch3B/SecVIII/PtK.2.c.)
◆ Bifurcated distribution elections, (Ch3B/SecVIII/PtK.2.c.4)c))
◆ Partial restrictions when funding level is between 60% and 80%, (Ch3B/SecVIII/PtK.2.c.4))
- Notice to participants under ERISA §101(j), (Ch3B/SecVIII/PtK.12.)
- Potential conflict with prior benefit structure test under IRC §401(a)(26), (Ch8/SecX/PtH.3.a.)
- Right to delay commencement of benefit, (Ch3B/SecVIII/PtK.2.c.5))
- Social Security leveling feature, (Ch3B/SecVIII/PtK.2.c.4)b)ii))
- Suspension of unpredictable contingent benefits, (Ch3B/SecVIII/PtK.2.a.)
* Cash balance plans and other statutory hybrid plans: safe harbor present value rule; elimination of whipsaw, see Present value below
* Cash-out distribution, forfeiture triggered by, see VESTING RULES
* Consent required for certain distributions, see Notice and consent requirements below
* Corrective distributions under ADP test or ACP test, see ADP AND ACP TESTING
* Death benefits, see DEATH BENEFITS
* Deemed distributions, see DEEMED DISTRIBUTIONS
* Defined benefit plan, distributions from
- Actuarial equivalence determination, see Actuarial equivalence above
* Delay of distribution at election of participant, see Notice and consent requirements below
* Delay of payments: recovery of interest, see ENFORCEMENT OF ERISA
* Discretion by employer to choose optional forms of benefit, see ANTI-CUTBACK RULE
* Early retirement
- Actuarial equivalent adjustment for early commencement of benefits, (Ch6/SecIII/PtC.2.c.2))
- Plan provisions relating to early retirement for distribution commencement purposes, (Ch6/SecIV/PtC.7.)
- Protection from elimination, see ANTI-CUTBACK RULE
- "Subsidized" early retirement under defined benefit plan, (Ch6/SecIV/PtC.7.b.)
* Election period, see Notice and consent requirements below
* Electronic media may be used for certain notices and consents, (Ch6/SecIV/PtD.5.)
- Beneficiary designations, (Ch6/SecV/PtB.8.)
- Spousal consent may be transmitted to plan electronically if spouse's consent is witnessed in physical presence of notary, (Ch6/SecIV/PtD.5.g.)
* Employee after-tax contributions can be available for distribution at any time specified by the plan, (Ch6/SecIV/PtC.10.)
* Employer securities, distribution in the form of, (Ch1A/Def-Government[amp]#8221;PickUp[amp]#8221;Plan/PtC)
* ESOP, special distribution rules for, (Ch6/SecIII/PtD.2.k.)
* Federal tax levy: distribution of benefits pursuant to levy, (Ch6/SecIV/PtC.9.)
* Fiduciary issues relating to distributions
- Information about distribution options, (Ch13B/SecII/PtF.6.g.)
* Form 1099-R, see REPORTING REQUIREMENTS
* Forms of payment
- Annuity distributions, (Ch6/SecIII/PtA.2.)
◆ Defined contribution plan must purchase contract, (Ch6/SecIII/PtA.2.a.)
◆ Joint and survivor annuities, see J&S RULES
◆ Term certain annuity, (Ch6/SecIII/PtA.2.d.))
- Defined benefit plan options must be at least actuarially equivalent to normal form, (Ch6/SecIII/PtC.2.)
◆ Interest rate and mortality rate requirements under IRC §417(e), (Ch6/SecIII/PtC.2.a.)
- Explanation of, see Notice and consent requirements below
- Installment distributions, (Ch6/SecIII/PtA.3.)
- Joint and survivor annuity, see J&S RULES
- Life annuity: definition of, (Ch1A/Def-LifeAnnuity)
- Lump sum, (Ch6/SecIII/PtA.1.)
◆ Special tax election, see LUMP SUM DISTRIBUTIONS
- Normal form of payment under defined benefit plan, (Ch6/SecIII/PtC.1.)
- Normal form specified under defined benefit plan not necessarily the form of payment actually distributed, (Ch3A/SecIII/PtA.2.)
- Protection from elimination, see ANTI-CUTBACK RULE
* Funding-based distribution restrictions, see Benefit limits triggered by underfunding above
* Hardship
- Definition of a hardship, (Ch1A/Def-LifeAnnuity)
- EPCRS correction for making hardship distributions without authorizing plan provision, (Ch9/SecXI/PtD.2.a.)
- Section 401(k) plans: hardship withdrawal rules, see SECTION 401(k) PLANS
* Highest 25 HCEs: restricted payouts under defined benefit plans, (Ch6/SecIII/PtA.1.b.)
* Installment distributions, see Forms of payment above
* Interest on delayed payments, see ENFORCEMENT OF ERISA
* Involuntary distributions, see Notice and consent requirements below
* IRC §409(o) distribution rules, see Stock bonus plans below
* IRC §417(e) interest and mortality rates, (Ch6/SecIII/PtC.2.a.), (Ch6/SecIII/PtC.3.), (Ch6/SecIII/PtA.3.b.1).)
- Court challenge of validity of regulations, (Ch6/SecIII/PtC.2.a.3))
- Plan may state other assumptions and use §417(e) as a floor, (Ch6/SecIV/PtE.1.)
* IRC §436, see Benefit limits triggered by underfunding above
* Joint and survivor annuity, see J&S RULES
* Life annuity, see Forms of payment above
* Lump sum distribution, special tax election for, see LUMP SUM DISTRIBUTIONS
* Mandatory distributions
- Commencement of benefits after NRA (IRC §401(a)(14), (Ch6/SecIV/PtE.3.)
◆ No distribution required before NRA, (Ch6/SecIV/PtC.13.)
- Minimum distributions after Applicable RMD Age, see MINIMUM DISTRIBUTION RULES
* Military service
- Is distribution available when employee leaves for USERRA-covered service? (Ch6/SecIV/PtC.13.b.)
◆ Deemed severance treatment for individuals on active military duty for more than 30 days, (Ch6/SecVII/PtK)
* Minimum distributions after Applicable RMD Age
- Coordination of consent requirements with minimum distribution rules, (Ch6/SecIII/PtC.2.c.1))
- Explanation of rules, see MINIMUM DISTRIBUTION RULES
* Nontransferable annuity contract distributed from plan, see TAXATION OF BENEFITS
* Normal retirement age (NRA)
- Actuarial reduction for defined benefit plan payments made before NRA, (Ch6/SecIV/PtE.1.a.)
- Commencement of benefit for former employee required after attaining NRA, unless he elects otherwise, (Ch6/SecIV/PtE.3.)
- Distribution not required to be available before normal retirement age, (Ch6/SecIV/PtD.2.b.)
- Postponement of payment to NRA by refusing immediate distribution, (Ch6/SecIV/PtD.7.a.1))
* Notice and consent requirements
- 30 to 180 day notice period, (Ch6/SecIV/PtD.7.)
- Absence of election to receive distribution: when should distribution be made? (Ch6/SecIV/PtD.7.c)
◆ Delay in participant's making election, (Ch6/SecIV/PtD.2.d.1)a))
- Annuity starting date: definition, (Ch6/SecIV/PtD.3.f.)
◆ Retroactive annuity starting dates, (Ch6/SecIV/PtD.8.)
- Automatic rollover rule for involuntary cashouts exceeding $1,000 (IRC §401(a)(31)(B)), (Ch7/SecIV/PtE.5.d.)
◆ Roth contributions, (Ch6/SecIV/PtD.8.b.)
◆ Fiduciary relief for automatic rollovers made in accordance with DOL regulations, (Ch14/SecII/PtE.12.)
◆ Prohibited transaction relief with respect to IRAs offered by plan sponsor (or its affiliate), (Ch6/AppA)
- Chart summarizing notice and consent rules, (Ch6/SecIV/PtD.2.b.3))
- Consent must be voluntary, (Ch6/SecIV/PtD.3.c.), (Ch6/SecIV/PtD.2.b.)
- Consent requirements
◆ Spousal consent, see J&S RULES
◆ Waiver of QJSA, see J&S RULES
- Consequences of failing to delay payment must be explained, (Ch6/SecIV/PtD.2.b.4)c))
◆ Safe harbor for interim compliance, (Ch6/SecIV/PtD.2.b.)
- Death benefits: notice and consent requirements, see DEATH BENEFITS
- Delay of distribution may be elected by participant if he/she hasn't reached NRA, (Ch6/SecIV/PtD.1.b.1))
- Determining value of vested benefit for notice and consent rights, (Ch6/SecIV/PtD.1.b.4))
◆ Disregarding rollovers to determine if benefit exceeds $7,000, (Ch6/SecIV/PtD.3.e.)
- Direct rollover election, see ROLLOVERS
- Election period must be at least 30 days and no more than 180 days (90 days in pre-2007 years), (Ch6/SecIV/PtD.3.e.1))
◆ Waiver of minimum 30-day period, (Ch6/SecIV/PtD.5.)
- Electronic media may be used to furnish notices and obtain consents, (Ch6/SecIV/PtD.5.)
- EPCRS correction methods for failing to obtain consent, (Ch6/SecIV/PtD.2.a.)
- Explanation of benefit options must be provided to participant, (Ch15/SecVI/PtC.6.)
- Failure to obtain consent: correction methods, (Ch7/SecIV/PtC.1.a.2)f)ii))
- Internal Roth Conversions: application of notice and consent requirements, (Ch6/SecIV/PtD.2.e.)
- Involuntary distributions permitted if vested interest does not exceed $7,000 (was $5,000), (Ch6/SecIV/PtD.8.)
◆ Automatic IRA rollover in absence of election for certain mandatory distributions, (Ch6/SecIV/PtD.1.b.5))
◆ Prior withdrawals no longer affect determination of consent rights, (Ch6/SecIV/PtD.1.b.5)b))
◆ QJSA provisions in plan: after annuity starting date, no distributions without participant's (and spouse's) consent, (Ch6/SecVII/PtK)
- Minimum distributions required under §401(a)(9): coordination of consent rules with, (Ch6/SecIV/PtD.7.a.1))
- Notice and election periods, (Ch6/SecIV/PtD.3.e.), (Ch6/SecIV/PtD.7.a.1))
◆ 180-day rule, (Ch6/SecIV/PtD.1.a.)
◆ $7,000 (was $5,000) threshold for needing participant's consent to make distribution, (Ch6/SecIV/PtD.1.b.2))
◆ Threshold may be less than $7,000 if plan provides, (Ch6/SecIV/PtD.7.a.1))
◆ Notice to participant regarding distribution rights: timing of notice, (Ch6/SecIV/PtD.6.)
- Partial withdrawals: application of consent requirements, (Ch6/SecIV/PtD.1.i.)
- Participant loans: do notice and consent requirements apply to offsets due to loan default? (Ch6/SecIV/PtD.2.b.)
- Postponement of payment to later of NRA or age 62 must be available to participant whose vested interest exceeds $7,000, (Ch6/SecIV/PtD.1.b.4))
- QDROs, application of notice and consent requirements to, (Ch1B/Def-QDRO)
- QJSA requirements, see J&S RULES
- Rollover notice, see ROLLOVERS
- Rollovers may be disregarded in determining whether vested benefit exceeds $7,000, (Ch6/SecIV/PtD.3.c.)
- Significant detriment for delaying payment cannot be imposed by plan, (Ch6/SecIV/PtD.3.c.)
◆ Consent invalid because not voluntary, (Ch6/SecIV/PtD.3.c.2))
◆ Deferral to NRA cannot be required by plan merely because immediate payment was not elected, (Ch6/SecIV/PtD.3.c.1))
◆ Legitimate business reason required for different treatment not to be considered a significant detriment, (Ch6/SecIV/PtD.3.c.1)a))
◆ Less profitable investment for account that is subject to delayed payment, (Ch6/SecIV/PtD.3.c.4))
◆ Payment by employer of administrative expenses relating only to current employees is not a significant detriment, (Ch6/SecIV/PtD.2.f.)
- Spousal consent requirements, see J&S RULES
- Summary notices permitted under certain conditions, (Ch6/SecIV/PtG.2.)
- Termination of plan
◆ Deferred annuity may be purchased if participant refuses distribution, (Ch6/SecIV/PtG.1.)
◆ Exception from consent requirements under certain terminated profit sharing or stock bonus plans, (Ch6/SecIV/PtD.1.)
- Vested benefit exceeds $7,000: applicable notice and consent requirements, (Ch6/SecIV/PtD.3.e.)
◆ Election period, (Ch6/SecIV/PtD.2.a.)
◆ Explanation of optional forms of benefit, (Ch6/SecIV/PtD.6.)
◆ Partial withdrawals, (Ch6/SecIV/PtD.2.b.)
◆ QJSA waiver, see J&S RULES
◆ Right to postpone payment to later of NRA or age 62, (Ch6/SecIV/PtD.1.b.1))
◆ Vested benefit: determination, (Ch6/SecIV/PtD.2.e.)
- Vested benefit not exceeding $7,000: applicable notice and consent requirements, (Ch6/SecIV/PtD.3.e.1))
- Waiver of minimum 30-day election period, (Ch6/SecIV/PtB.3.) Also see ROLLOVERS (Notice requirements)
* Objective conditions on availability of benefit payment options are permissible, (Ch6/SecIII/PtC.1.)
* Optional forms of benefit
- Actuarial assumptions used to calculate optional forms of benefit under defined benefit plan, (Ch6/SecIII/PtC.2.)
◆ Anti-cutback issues arising from amendment to change, see ANTI-CUTBACK RULE
◆ Assumptions used for determining actuarial equivalent do not have to be used for minimum funding purposes, (Ch6/SecIV/PtG.1.)
- Description of, see Forms of payment above
- Elimination by plan amendment, see ANTI-CUTBACK RULE
- Protection from elimination, see ANTI-CUTBACK RULE
* Orphan plans: DOL procedures for terminating orphan DC plans, (Ch6/SecIV/PtG.6.b.4))
- Proposed regulations would extend abandoned plan program to plans sponsored by employers in Chapter 7 bankruptcy, (Ch6/SecIV/PtG.6.b.4))
- Sample forms for orphan DC plan terminations, (Ch6/AppD)
* Overpayment of benefits, duty to recover, see FIDUCIARY DUTY
* Paperless compliance with certain notice and consent requirements, (Ch6/SecIV/PtD.6.)
* Partial withdrawals
- Consent issues relating to, (Ch6/SecIII/PtA.4.)
- Usually paid in single sum, (Ch6/SecIV/PtA)
* Participant loans, distribution and tax issues relating to, see PARTICIPANT LOANS
* Pension plans: permissible distribution events, see Restrictions on distributions below
* Phased retirement programs, see Restrictions on distributions below
* Plan document will state when distribution is available, (Ch6/SecIV/PtE.3.)
- Distribution before normal retirement age is not required to be available under document, (Ch6/SecIV/PtG)
* Plan termination
- Application of notice and consent requirements to plan terminations, (Ch6/SecIV/PtG.5.)
- Fiduciary safe harbor for rolling over distributions of unresponsive or missing participants, (Ch6/SecIV/PtG.5.)
◆ Sample form, (Ch6/AppE)
- Orphan DC plans, (Ch6/SecIII/PtA.1.a.)
* Postponement of payment at employee's election, see Notice and consent requirements above
* Present value, (Ch6/SecIII/PtC.3.), (Ch6/SecIII/PtC.3.)
- Cash balance plans or other statutory hybrid plan may treat hypothetical account as present value (safe-harbor present value rule), (Ch6/SecIII/PtC.4.c.)
◆ 2014 regulations add conditions for using safe-harbor present value rule, (Ch6/SecIII/PtC.3.b.)
- Changing time for interest rate determination under §417(e)(3), (Ch6/SecIII/PtC.3.c.)
- Definition of present value, (Ch6/SecIII/PtC.3.d.)
- GATT rates, (Ch6/SecIII/PtC.3.d.1))
- Interest rate used for §417(e)(3) determination, (Ch3B/SecVIII/PtB.3.b.2)e)v))
◆ MAP-21 rates not used, (Ch17/SecIII/PtC.1.d.), (Ch6/SecIII/PtC.3.a.1)b)i))
◆ Minimum present value segment rates (post-2007 plan years), (Ch6/SecIII/PtC.3.a.)
◆ PPA 2006 amendments affect interest rate in post-2007 plan years, (Ch6/SecIII/PtC.3.a.1)c)i))
◆ Terminated plans: not subject to PPA 2006 changes if termination date is before first day of 2008 plan year, (Ch6/SecIII/PtC.3.a.2))
- Mortality table used for §417(e)(3) determination, (Ch6/SecIII/PtC.3.a.2)a)iv))
◆ Incorporation by reference in plan document, (Ch6/SecIII/PtC.3.a.2)b))
◆ Rev. Rul. 2001-62 (mortality table for pre-2008 plan years), (Ch6/SecIII/PtC.3.a.2)b)iii))
. . . Model plan amendment issued by IRS, (Ch6/SecIII/PtC.3.a.2)a)ii)A))
◆ Tables issued for 2008-2017, (Ch6/SecIII/PtC.2.b.)
◆ Tables issued for 2018 and later, (Ch6/SecIII/PtC.3.a.2)a)ii)B))
- Partially-annuitized benefits, (Ch6/SecIII/PtC.2.b.)
◆ Regulations allow use of non-417(e)(3) rates for annuity portion of payment, (Ch6/SecIII/PtC.3.e.)
- PBGC interest rates used before GATT amendments were effective, (Ch17/SecIII/PtC.5.)
◆ PBGC interest rates to compute lump sums from private-sector plans: table of rates, (Ch6/SecIII/PtC.3.)
- Pension Protection Act of 2006 (PPA 2006) sets new interest rate standards starting in 2008, (Ch6/SecIII/PtC.4.b.)
- Safe-harbor present value rule for statutory hybrid plans, (Ch6/SecIII/PtC.3.)
- Section 417(e)(3): minimum present value, (Ch6/SecIII/PtC.3.b.)
- Stability period for determining interest rate, (Ch6/SecIII/PtC.3.b.)
◆ Continues in post-2007 plan years, (Ch17/SecIII/PtC.1.b.)
- Table of 30-year Treasury rates, (Ch6/SecIII/PtC.4.a.)
- Whipsaw issue for cash balance plans (eliminated by PPA 2006), (Ch6/SecIII/PtC.3.a.)
- Yield curve segment rates used to determine IRC §417(e) interest rate for post-2007 plan years, (Ch6/SecIII/PtC.3.a.1)b)i)), (Ch17/SecIII/PtC.1.d.)
◆ MAP-21 rates do not apply to IRC §417(e) determinations, (Ch17/SecIII/PtC.3.a.1)b)ii))
◆ Monthly spot segment rates, (Ch6/SecIII/PtC.3.a.1)c))
◆ Phase-in rules for 2008-2012, (Ch6/SecIV/PtC)
* Profit sharing plans: permissible distribution events, see Restrictions on distributions below
* Qualified domestic relations orders, distributions under, see (Ch1B/Def-QDRO)
* Reporting of distributions, see REPORTING REQUIREMENTS
* Restrictions on distributions, (Ch6/SecIV/PtC.10.)
- Default on a participant loan, see PARTICIPANT LOANS
- Defined benefit plans, restrictions on distributions for nondiscrimination purposes, see (Ch3A/SecIII/PtA.1.c.)
- Employee after-tax contributions can be available for distribution at any time specified by the plan, (Ch6/SecIV/PtC.11.)
- ESOP dividends not subject to distribution restrictions, (Ch6/SecIV/PtC.1.)
- Non-pension plans, see Profit sharing plans and stock bonus plans below
- Pension plans (defined benefit, money purchase, target benefit): permissible distribution events, (Ch6/SecIV/PtC.1.a.2))
◆ Age 62 in-service withdrawals in post-2006 plan years, (Ch6/SecIV/PtC.1.b.)
◆ Age 59 1/2 in-service withdrawals in post-2019 plan years, (Ch6/SecIV/PtC.1.a.2))
◆ In-service withdrawals permitted after NRA, (Ch6/SecIV/PtC.1.b.1))
. . . Age 62 or older presumed to be reasonable NRA, (Ch6/SecIV/PtC.1.b.2))
. . . Ages 55 to 62: IRS gives deference to employer's determination of reasonableness, (Ch6/SecIV/PtC.1.b.6))
. . . Anti-cutback relief for certain amendments raising NRA, (Ch6/SecIV/PtC.1.b.3))
. . . Below 55 presumed unreasonable, but employer may rebut presumption, (Ch6/SecIV/PtC.1.b.)
. . . Governmental plans: additional safe harbors proposed, (Ch6/SecIV/PtC.1.b.4)a))
. . . Multiemployer plans: stated NRA deemed to be reasonable, (Ch6/SecIV/PtC.1.b.3)e))
. . . NRA must be reasonable, (Ch6/SecIV/PtC.1.b.2)b))
. . . Pre-approved plans do not have reliance on advisory or opinion letter if NRA is earlier than age 62, (Ch6/SecIV/PtC.1.b.3)a))
. . . Private letter ruling may be requested to determine reasonableness of NRA, (Ch6/SecIV/PtC.1.c.)
◆ Plan termination may result in in-service distributions, (Ch6/SecIV/PtC.1.d.)
◆ Phased retirement rules proposed that would allow in-service distributions before NRA, (Ch6/SecIV/PtC.1.a.1))
◆ Retirement: definition for distribution purposes, (Ch6/SecIV/PtC.1.e.1))
◆ Rollover or elective transfer to non-pension plan eliminates restrictions, (Ch6/SecIV/PtC.1.e.)
◆ Transfer of assets to non-pension plan: restrictions continue, (Ch6/SecIV/PtC.1.)
- Profit sharing plans and stock bonus plans (non-pension plans) (permissible distribution options), (Ch6/SecIV/PtC.2.a.1))
◆ Childbirth/adoption, (Ch6/SecIV/PtC.15)
◆ Five years of participation: distribution after, (Ch6/SecIV/PtC.1.)
◆ Lifetime income investments (portability), (Ch6/SecIV/PtC.16)
◆ Non-401(k) assets not restricted by 401(k) distribution rules, (Ch6/SecIV/PtC.1.)
◆ Stated events in plan dictate when distribution is available, (Ch6/SecIV/PtC.2.a.)
◆ Two-year accumulation rule, (Ch6/SecIV/PtC.12.)
- QDRO may permit distribution to alternate payee before benefits are distributable to participant, (Ch6/SecIV/PtC.10.)
- Rollover contributions can be available for distribution at any time specified by the plan, (Ch6/SecIV/PtC.10.)
- Section 401(k) plans: special distribution restrictions for elective deferrals and certain other contributions, see SECTION 401(k) PLANS
* Rollover contributions can be available for distribution at any time specified by the plan, (Ch1B/Def-SeparationFromService)
* Safe-harbor present value rule for statutory hybrid plans, see Present value above
* Section 401(k) plans: permissible distribution events, see SECTION 401(k) PLANS
* Section 403(b) plans: distribution rules for, see (Ch16/SecII/PtH.6.b.)
* Separation from service as a distribution event
- Definition of a separation from service, (Ch1B/Def-SeparationFromService/PtA)
- "Same desk" rule (pre-2002), (Ch6/SecIV/PtC.3.c.)
* Severance from employment as distribution event, (Ch6/SecIV/PtC.3.b.)
- Section 401(k) plans: severance from employment replaces separation from service as distribution event, (Ch6/SecIV/PtF.1.)
* Significant detriment for delaying distribution, see Notice and consent requirements above
* SIMPLE-IRA plans, rules for distributions from, see SIMPLE PLANS
* Spousal consent requirements, see Notice and consent requirements above
* Statutory hybrid plans: safe harbor present value rule; elimination of whipsaw, see Present value below
* Stock bonus plans have special distribution rules under IRC §419(o), (Ch6/SecIV/PtC.7.b.)
* Subsidiary, distribution following sale of, see Restrictions on distributions above
* Subsidized benefits, (Ch6/SecIV/PtD.2.f.)
* Summary notices permitted under certain conditions, (Ch6/SecIV/PtC.1.e.)
* Transfer of pension assets to non-pension plan: distribution restrictions for pension plans continue, (Ch6/SecIV/PtC.1.e.2))
- Model amendment issued to eliminate impermissible options on transferred benefits, (Ch15/SecIX/PtO)
* Vested benefit exceeding $7,000 (inreased from $5,000), see Notice and consent requirements above
* Vested benefit not exceeding $7,000 (increased from $5,000), see Notice and consent requirements above
* Waivers
- Minimum 30-day election period, waiver or, see Notice and consent requirements above
- QJSA form of payment: waiver, see J&S RULES
DIVERSIFICATION RIGHTS REGARDING EMPLOYER SECURITIES
* Defined contribution plans investing in publicly-traded securities (IRC §401(a)(35), (Ch1A/Def-Government[amp]#8221;PickUp[amp]#8221;Plan/PtC)
* ESOP diversification rights for qualified participants who have reached age 55, (Ch6/SecIII/PtD.2.k.)
DIVORCE, see QDRO
DOCUMENT, (Ch3A/SecIII/PtA.1.c.)
DODD-FRANK FINANCIAL REFORM LEGISLATION
* Summary of legislation, (Ch1A/Def-EBSA)
DOL, see DEPARTMENT OF LABOR
DOLLAR LIMIT ON COMPENSATION, see COMPENSATION DOLLAR LIMIT
DOLLAR LIMIT ON ELECTIVE DEFERRALS, see SECTION 402(g) LIMIT
DUAL ELIGIBILITY, see COVERAGE TESTING, ELIGIBILITY RULES