Benefits And Distributions Of Qualified Plans Flashcards
Loans
How much can be taken out for a loan of qualified plans?
50% of vested balance; up to $50,000 (Outstanding at all times)
Vested below $10,000: entire amount is available
Vested balance $10,000 - $20,000: $10,000 is available
Vested balances of $20,000 - $50,000 50% is available
Qualified disaster loan up to 100% of vested account balance limited to $100,000
Loans
$50,000 loan limit is reduced by what?
The highest outstanding loan balance within the previous 12 months
Loans
What is the period of payback for loans from a qualified plan?
Limited to no more than five years
Exception , used to purchase a principal residence then it can be a reasonable amount of time
What are the forms of survivorship benefits for a spouse that are required for all pension plans?
Qualified pre-retirement survivor annuity
Qualified joint and survivor annuity
How must a spouse wave their rights from a pension plan survivorship benefits?
Spouse must consent in writing
Waivers irrevocable
Witnessed by notary or official of the plan
ESOPs, profit sharing, and stock bonus plans generally do not require such benefits of Survivor benefits unless what?
If nonforfeitable portion is payable to spouse as death benefit
All pension plans are required to automatically offer what type of annuity if you are single and if you are married?
Single: Life Annuity (Single Life Annuity)
Married: Joint and Survivor Annuity
Defined Benefit Plans
Option that eliminates the benefit to a spouse, the spouse must what?
Consent, in writing and must be if front of an notary
Defined benefit pension
Can make in-service distributions to employee participants after what age?
59 1/2 or older
Define contribution pension plans
Are they subject to ERISA and must they meet the pre retirement and joint and survivor annuity rules?
Yes
Defined contribution, pension plans may allow in service distributions to employee participants at what age
59 1/2 an older
Retirement plan rollovers
What is a rollover?
Associated with a transfer in which the participant takes possession of the distribution and deposits the distribution into another eligible plan within 60 days.
Distribution is subject to mandatory 20% income tax withholding
IRS limits this type of rollover from IRA to IRA to once per 12 month period, regardless of the number of accounts, a participant maintains
Retirement plan rollovers
What is a trustee to trustee direct transfer?
Funds are transferred directly from one to another without the participant, taking receipt of the distribution
Not subject to mandatory 20% income tax withholding
Not limited in number in a given year
