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Conference nyoss1::market_investing

Title:	Market Investing

Moderator:	2155::michaud

Created:	Thu Jan 23 1992
Last Modified:	Thu Jun 05 1997
Last Successful Update:	Fri Jun 06 1997
Number of topics:	1060
Total number of notes:	10477

858.0. "401a" by GRILLA::LALIBERTE (OMS Technical Services) Wed May 03 1995 19:54

    what are the rules for a 401a (this is the matching fund contributed
    to by non-profit employer...the employee has 401b funds withheld
    from paycheck.)  401a funds are under the employer name as
    a defined contribution plan. employee is leaving job.
    
    should employee expect check from the 401a at termination and does
    it need to be rolled over to avoid penalty...how soon ??
    
    also, termination date was april but employee being paid thru
    june. when should distribution be expected ??
    
    thanks.

T.R	Title	User	Personal Name	Date	Lines
858.1		RANGER::JUMPY::CLARK		`Thu May 04 1995 15:14`	16
	> should employee expect check from the 401a at termination and does > it need to be rolled over to avoid penalty...how soon ?? > > also, termination date was april but employee being paid thru > june. when should distribution be expected ?? Unless this is a purely hypothetical question for your own intellectual amusement, is there any reason not to direct these questions at the employer? I doubt that any rules in this area would be so rigid that the employer has absolutely no leeway around when things are done. With respect to a possible distribution: yes, it has to be rolled over to avoid both income tax and early-distribution penalty. Additionally, the roll-over should be handled via direct transfer of funds from employer to IRA custodian (or check made out to IRA custodian). Otherwise, the employer may (have to) withhold some amount for income tax purposes (28%?).
858.2	no...this is the real thing	GRILLA::LALIBERTE	OMS Technical Services	`Thu May 04 1995 16:56`	16
	> Unless this is a purely hypothetical question for your own intellectual > amusement, is there any reason not to direct these questions at the > employer? My husband is leaving his job. I was not pleased with the way the employer answered the questions we asked; the person giving me the answers seemed unsure. I asked for more info in writing. In the interim, I asked the question in this notesfile. Asking 401A questions is not my idea of intellectual amusement. Thanks for your reply.
858.3		NOTIME::SACKS	Gerald Sacks ZKO2-3/N30 DTN:381-2085	`Thu May 04 1995 18:37`	15
	From IRS publication 17: Deferred compensation plans of state and local governments and tax-exempt organizations. If you participate in one of these plans (known as section 457 plans), you will not be taxed currently on your pay that is deferred under the plan. You or your beneficiary will be taxed on this deferred pay only when distributed or otherwise made available to either of you... For information on these deferred compensation plans and their limits, see _Section 457 plans -- deferred compensation plans of state and local governments and tax-exempt organizations_ under _Excess Contributions, Deferrals, and Annual Additions_ in Publication 575. So it looks like you should get publication 575 (Pension and Annuity Income) from the IRS. Try calling 1-800-TAX-FORM to order it.