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Writer Urges IRS to Provide Elective Transfer Relief

AUG. 11, 1998

Writer Urges IRS to Provide Elective Transfer Relief

DATED AUG. 11, 1998
DOCUMENT ATTRIBUTES
  • Authors
    Goucher, Jacklyn D.
  • Institutional Authors
    Medicare Services
  • Cross-Reference
    Notice 98-29, 1998-22 IRB 8
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    pension plans, vesting standards, minimum
    pension plans, contributions, defined
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 98-25537 (3 pages)
  • Tax Analysts Electronic Citation
    98 TNT 161-21
====== SUMMARY ======

Jacklyn D. Goucher of Medicare Services has urged the Service to

 

provide relief for employees who are affected by the "same desk

 

rule." Goucher says that she contributed to her employer's retirement

 

plan until the employer transferred its business to another company.

 

When the new company hired her she was told that she couldn't roll

 

over her plan to the new company's plan because of an IRS ruling.

 

Along with her letter, Goucher forwards two similar letters

 

requesting relief.

====== FULL TEXT ======

Internal Revenue Service

 

PO Box 7604

 

Ben Franklin Station

 

Attn: cc:CORP:T:R (Notice 98-29), Rm #5226

 

Washington DC 20044

Dear Sirs,

[1] I am enclosing a copy of a correspondence from the law offices of Mitchell, Williams, Selig, Gates and Woodward of Little Rock, AR, regarding Notice 98-29. I would respectfully request relief from the current IRS ruling that prevents rolling over an ISP contribution from Aetna Retirement Services, either into a lump sum distribution or to my current pension retirement fund through Arkansas Blue Cross & Blue Shield. I was a former Aetna employee in Oklahoma. A transfer of business occurred on May 1, 1997, as the operation was taken over by Arkansas Blue Cross & Blue Shield. We were advised that we were unable to access the funds that had been placed into the retirement account at Aetna, on the basis of your former decisions and rulings. I would like to have that money transferred into my current retirement account with Arkansas Blue Cross & Blue Shield to consolidate the funds, since Aetna is no longer my employer. I am looking forward to your earliest response.

Sincerely,

Medicare Services

 

OK/NM Medicare Part B

cc: Ms. Sylvia Shaw,

 

Arkansas Blue Cross & Blue Shield

 

PO Box 2181

 

Little Rock AR 72203

cc: Rebecca White

 

Human Resources Manager

 

Arkansas Blue Cross & Blue Shield

 

Oklahoma City OK

* * * * *

August 4, 1998

Internal Revenue Service

 

P.O. Box 7604

 

Ben Franklin Station

 

Attn: CC:CORP:T:R (Notice 98-29), Room 5226

 

Washington, DC 20044

Re: Notice 98-29

Gentlemen:

[2] As an individual who has been impacted by the "Same Desk Rule," I am writing to request relief for participants in 401K plans who as employees are transferred to a new control group in connection with an acquisition. The result of this ruling penalizes employees by freezing their retirement benefits in a 401K plan, and giving them no opportunity to direct and control their retirement funds.

[3] As a former employee of Aetna, my 401K plan with Aetna has been frozen, and I am unable to roll it over into an individual IRA, borrow against it, or add to it since Arkansas BlueCross BlueShield took over Aetna and obtained a "Same Desk" ruling on the Aetna and BlueCross BlueShield 401K plans.

[4] Arkansas BlueCross BlueShield will not allow the Aetna 401K to be rolled over into their plan. Arkansas BlueCross BlueShield has also advised that: (1) former Aetna employees cannot roll over their Aetna 401K plan into an individual IRA, (2) former Aetna employees cannot borrow against their Aetna 401K plan, and (3) former Aetna employees cannot add to the Aetna 401K plan.

[5] If an acquiring company will not allow employees of the acquired companies to roll over their 401K plans into the new company's plan, then those employee should have the option of rolling the 401K plan into an individual IRA account in which they will have direct control of the investments.

Very truly yours,

Rebecca C. White

 

Human Resources Manager,

 

Arkansas Blue Cross & Blue Shield

 

Oklahoma City, Oklahoma

* * * * *

Internal Revenue Service

 

P.O. Box 7604

 

Ben Franklin Station

 

Washington, DC 20044

 

Attn: CC:CORP:T:R (Notice 98-29), Room 5226

Re: Notice 98-29

Gentlemen:

[6] As an individual who has been impacted by the "Same Desk Rule," I am writing to request relief for participants in 401K plans who as employees are transferred to a new control group in connection with an acquisition. The result of this ruling penalizes employees by freezing their retirement benefits in a 401K plan, and giving them no opportunity to direct and control their retirement funds.

[7] As a former employee of Aetna, my 401K plan with Aetna has been frozen, and I am unable to roll it over into an individual IRA, borrow against it, or add to it since Arkansas BlueCross BlueShield took over Aetna and obtained a "Same Desk" ruling on the Aetna and BlueCross BlueShield 401K plans.

[8] Arkansas BlueCross BlueShield will not allow the Aetna 401K to be rolled over into their plan. Arkansas BlueCross BlueShield has also advised that: (1) former Aetna employees cannot roll over their Aetna 401K plan into an individual IRA, (2) former Aetna employees cannot borrow against their Aetna 401K plan, and (3) former Aetna employees cannot add to the Aetna 401K plan.

[9] If an acquiring company will not allow employees of the acquired companies to roll over their 401K plans into the new company's plan, then those employees should have the option of rolling the 401K plan into an individual IRA account in which they will have direct control of the investments.

Very truly yours,

Emilie M. Hale

DOCUMENT ATTRIBUTES
  • Authors
    Goucher, Jacklyn D.
  • Institutional Authors
    Medicare Services
  • Cross-Reference
    Notice 98-29, 1998-22 IRB 8
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    pension plans, vesting standards, minimum
    pension plans, contributions, defined
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 98-25537 (3 pages)
  • Tax Analysts Electronic Citation
    98 TNT 161-21
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