The distribution of 401(k) benefits in a corporate transaction: a call for reconciliation of the 401(k) regulations, the same desk rule and GCM 39824

Article Abstract:

The IRS should abandon the same desk rule under the general prohibition of 401(k) plan distributions to employees during a corporate reorganization and should opt for the rules suggested in GCM 39824. The same desk rule was originally intended to apply to qualification issues but has been extended to employee taxation issues. GCM 39824 re-established the distinction and found that distribution from the 401(k) should be permitted when employment with the employer that established the plan has terminated.

Salary reduction savings plans, 401K plans, Corporate reorganizations

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IRS issues guidance regarding spousal rights

Article Abstract:

IRS Notices 97-10 and 97-11 provide benefit plan administrators with guidance on how to address issues raised by the use of qualified domestic relations orders and spousal consent waiving participation in certain annuity benefits. Notice 97-10 offer sample language for waivers related to qualified joint and survivor annuities, qualified preretirement survivor annuities and designation of beneficiaries other than the spouse. Notice 97-11 provides sample language for qualified domestic relations orders.

Pension Fund Administration, Taxation, Pension funds, Husband and wife, Husband-wife relations, Financial management, Divorce settlements, Annuities

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IRS issues guidance on ERISA s. 204(h) notice requirements

Article Abstract:

IRS regulations released under IRC section 411(d) provide guidance regarding the notice to qualified plan participants required when plan modifications significantly reduce the future benefit accrual rate of the plan. The regulations identify which types of plan are subject to the requirement, what changes trigger the requirement, when notice will be effective and what results if the administrator fails to give proper notice. The regulations are effective after Dec 1995.

Defined benefit plans, Notice (Law)

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