WDs Eligible for Rollover
An employer can NOT distribute a former employee's vested benefits from a qualified plan without his or her consent for amounts over $5,000. This withdrawal is known as __________ or "involuntary cash outs".
MT
A participant needs to make a minimum distribution withdrawal of $3,000. What are the participant's federal tax withholding options?
The participant can either request John Hancock to withhold $300 (or more) from the distribution amount or to withhold $0 in federal income taxes.
T/F. Participants can choose to have the penalty tax withheld from the payout at John Hancock.
False
A 40-year old participant requests a termination withdrawal of his entire vested account balance of $10,000. He wants the withdrawal payable to him in cash. As an eligible for rollover distribution, how much of this $10,000 disbursement must be withheld by John Hancock for federal income taxes?
e) $2,000
A participant who takes an eligible for rollover distribution in cash has _________ days to change his/her mind and roll the amount over to another eligible retirement plan or IRA.
60
A participant must take this type of distribution no later than April 1 following the LATER of the calendar year in which s/he turns 70 1/2 years of age or retires.
MD
State tax is based on:
a) The participant's state of residence as of the end of the plan year.b) The participant's state of residence at the time of the distribution.c) The participant's state of employment.d) The state in which the employer has its headquarters.
The participant's state of residence at the time of the distribution.
Finn is a 60-year old participant who started contributing EEROT in 2012. He now wants to cash out his 401k. What are the taxes that he needs to pay?
None
Company XYZ can NOT do a Mandatory Distribution without the participant's permission if________.
AB is above $5,001.
What are the taxable consequences for a Hardship withdrawal of EEDEF taken by a 30-year old participant?
Optional Tax and Penalty Tax
Vesting refers to:
the participant's ownership of the employer contributions in his or her retirement plan account.
A 55-year old participant requests a termination withdrawal of his entire vested account balance of $25,000. He wants the withdrawal payable to him in cash. As an eligible for rollover distribution, how much of this $25,000 disbursement must be withheld by John Hancock for federal income taxes?
$5,000
What is the taxable consequence for a Retirement withdrawal taken in cash by a 67-year old participant?
20% Federal Tax
Participant receives a notice that he needs to withdraw $100 because he exceeded the IRS limit of $19,500. What are his options? Should he pay taxes?
Cash out via check/ ACH/ wire
Yes, optional federal tax applies
What are the taxes involved in a CRD?
Optional federal tax and state tax if applicable
Caleb is a 75-year-old participant whose minimum required amount is set at $32,000 based on the calculation of his employer. However, he only withdrew $15,000. How much penalty tax, if any, does the participant have to pay to the IRS?
$ 8500
What are the benefit distributions allowed by the IRS?
TE, RE, DI, DE
Give 5 examples of WDs Not Eligible for Rollover.
EC, ED, EA, HA, MD, DE non-spouse bene, QD non-spouse bene
A terminated participant who registers for the first time wants to make a withdrawal. The plan instructs to have all LI/WD requests done via web. What restrictions should you educate him about?
Cooling period - check is the only allowable payment method
Upon termination of employment, a participant has $10,000 in EEDEF, $6,000 in ERMAT, and $4,000 in ERPS in his account. If he is 50% vested in all employer money types, how much will he be able to roll over to his new company's 401(k) plan?
$15,000