Permalink Submitted by mk foss on Wed, 2008-10-22 23:28
This is the reverse of the old question; whether someone has “separated from service” and can take advantage of the tax benefits available to those with lump sum distributins.
The IRS (before 2001) was harsh on determining who had actually separated from service. There was the old “same desk” rule that adversely affected employees when the qualified plan ended because the employer was acquired.
In the old days, IRS looked at very minimal performance of services to say someone had not separated from service. This situation is different because the employees who benefit own less than 5% of the employer; previous activity was hitting the higher income and owner-employees.
Permalink Submitted by Alan Spross on Wed, 2008-10-22 21:27
I think that would vary from one plan document to another, but do not know what is typical.
Permalink Submitted by mk foss on Wed, 2008-10-22 23:28
This is the reverse of the old question; whether someone has “separated from service” and can take advantage of the tax benefits available to those with lump sum distributins.
The IRS (before 2001) was harsh on determining who had actually separated from service. There was the old “same desk” rule that adversely affected employees when the qualified plan ended because the employer was acquired.
In the old days, IRS looked at very minimal performance of services to say someone had not separated from service. This situation is different because the employees who benefit own less than 5% of the employer; previous activity was hitting the higher income and owner-employees.