If non-key participants were given a top heavy minimum in a plan that had deferrals and the 4% safe harbor match only, would it okay to leave the top heavy contributions in the plan for participants.

I scheduled an appointment with the Social Security Administration on behalf of my sister (who had recently suffered a stroke) to determine what benefits she might me eligible for. When we entered the Federal facility, an uncle of mine who likes sticking his nose where it doesn't belong, decided to go to the appointment early and began explaining to one of the security guards assigned to the office, and others who worked in the office, that I wouldn't be a good person to help my sister because I was "on methadone," information that he'd gotten from my not completely mentally well sister on an earlier visit to her nursing facility. The truth is, I am prescribed methadone for chronic pain, and have been for a number of years. Has my uncle violated HIPAA regulations by arbitrarily devulging my prescripted medications in an attempt to marginalize my reputation with a Federal office? If so, is this actionable by myself? What woould be my next step? Thanks for any help.

I was wondering if a Roth IRA has anything to do with US citizenship and residency.

I am not a US citizen, but I work here (with a temporary permit). My status is "non immigrant resident".

I intend to open a Roth IRA but in a few years I might have to go back to Europe.

Would I be able to contribute from abroad and also collect the tax-free distribution if by then I am residing overseas?

I know it's a tricky situation, but before committing in what seems to me like a very convenient instrument in the long term, I have to work out any potential problem.

Thanks again,

Ric

I have both an IRA and an SEP IRA with one custodian. I am now 71 years old and will not be using either IRA for contributions, so I want to combine them into one IRA. Should I move the SEP IRA into the IRA? Or does it matter?

What you don't know can hurt you

Subtitle: I can't believe this happened to me!

Recently received letter from Bear Stearns concerning my Roth IRA opened in 1998: "Our records indicate that you opened the above IRA with Bear Stearns as custodian. We have not been able to locate a complete application with your signature on our records......"

Are you kidding me? After all, I got this on April 1. They have just discovered there is not application on file.... after seven years? I have a copy here of the key pages but who knows if that would be considered an official document.

I can't believe their record keeping is that shabby. If I had died in the past seven years, they would not know the beneficiaries for my Roth.

Unbelievable!

Just another reason not to trust your custodians to get it right. Check, double check - contributions, purchase/sells, beneficiaries, etc. I know many custodians include the beneficiary designation on either all monthly statements or once a year. Not Bear Stearns.

Remember that old TV ad, "do you know where your children are?". Who knew that it might apply to your Roth paperwork.

Hello,

i'm new to the forum and I have really appreciated the info given in the recent threads.

I just want to ask 2 questions because I am considering opening a Roth IRA.

1. I was under the impression that contribution to Roth IRAs are tax-deductible, but reading the instruction on my tax form it explicitely says that regular-IRA contributions are tax deductible and that ROTH IRA contributions are not! Can anyone clarify?

2. if I open it before april 15th, can i still deduct my contribution for 2004 taxes? if so, will the fund have enough time to send me the appropriate documentation to file with my taxes, or is it better not to rush it and open the IRA in 2005, or still open it but not deduct for 2004 taxes?

Thanks,

Ric

I have a plan with KEY employee who sold his ownership and is still working for the company. Now he turns 70 1/2. Doesn't want to take Minimum Distributions.

Is there a rule that he has to take minimums if he was key within last 5 years?

I can't find it but I seem to remember it or something like it...

Thanks for any clarification.

When a US citizen moves to a foreign country and earns wages there, can he contribute to a Roth IRA?

I have a takeover DB plan that provides 55% of average pay for shareholders and NHCEs and $1 per year of participation for non shareholder HCEs. Therefore I surmise that the $1 benefit was for the purpose of providing a meaningful benefit to meet the minimum participation rules, when needed. And, in fact, I have for participants for 2004 only 1 HCE shareholder and 1 HCE non shareholder and no NHCEs. Both participants must have meaningful benefits, in order for the plan to meet the minimum participation rules. Per the plan, I would give 55% of pay to the shareholder and $1 per year of participation to the non shareholder HCE.

A prior IRS Alert Guideline said that 0.5% X average pay X year of participation would be a minimum meaningful benefit. This guideline refers to "nonshareholders" needing this minimum. However, I am wondering if, since the person not getting a "meaningful benefit" is an HCE, I am okay with the plan as is. Obviously whoever set up the plan thought it was okay, so I thought I would ask around a bit, before I make waves.

I would like to get some opinions on a survivor's ability to disclaim monthly survivor benefits after he has already accepted a couple of months of benefits.

Our state statute says, "a disclaimer of an interest in property is barred if the disclaimant accepts the interest sought to be disclaimed." This would seem to say that a survivor who accepts a monthly benefit may not change his mind and disclaim future monthly benefits. However, I am wondering if the future monthly benefits should be treated as separate interests in property. Such a reading would seem to further the intent of the statute, which is to not force property on someone if he doesn't want to accept it.

Thanks in advance.

I would like to get some opinions on a survivor's ability to disclaim monthly survivor benefits after he has already accepted a couple of months of benefits.

Our state statute says, "a disclaimer of an interest in property is barred if the disclaimant accepts the interest sought to be disclaimed." This would seem to say that a survivor who accepts a monthly benefit may not change his mind and disclaim future monthly benefits. However, I am wondering if the future monthly benefits should be treated as separate interests in property. Such a reading would seem to further the intent of the statute, which is to not force property on someone if he doesn't want to accept it.

Thanks in advance.

I would like to get some opinions on a survivor's ability to disclaim monthly survivor benefits after he has already accepted a couple of months of benefits.

Our state statute says, "a disclaimer of an interest in property is barred if the disclaimant accepts the interest sought to be disclaimed." This would seem to say that a survivor who accepts a monthly benefit may not change his mind and disclaim future monthly benefits. However, I am wondering if the future monthly benefits should be treated as separate interests in property. Such a reading would seem to further the intent of the statute, which is to not force property on someone if he doesn't want to accept it.

Thanks in advance.

Does anyone know if the Department of Labor has audited or taken enforcement action in connection with the treatment of demutualization proceeds issued with respect to a terminated contributory defined benefit plan?

A client previously sponsored a contributory defined benefit plan. The defined benefit plan was properly terminated and benefit liabilities fully funded in 1985. At the time of the defined benefit plan's termination, it was converted into a 401(k) plan.

More than fifteen years later the client received demutualization proceeds in connection with the group annuity contract that funded the plan. I am familiar with the Groom opinion letter (2001-02A) and the Bianchi opinion letter (2003-05A), as well as any other guidance that is even remotely close to the issue.

Although my client's defined benefit plan was contributory, I think the key to the Bianchi letter was that the plan was properly terminated and all obligations and claims satisfied. Subsequent demutualization proceeds are not plan assets even if the terminated plan was a contributory plan.

Conversations with the DOL have been unproductive. No one seems to know what the answer is.

I'm just wondering if anyone has been audited out there and what position the DOL has taken on audit with respect to this issue?

Thanks.

Off to the EA Meeting. Tally ho!

An employer wants to merge their MP into their existing 401(k). In reviewing the document provisions I have the following questions regarding whether certain benefits of the MP plan need to be made available in the 401(k):

1) The MP was effective pre-SBJA and allows active employees over 70.5 to elect to begin receiving their RMD's prior to retiring. The 401(K) is effective post-SBJA and doesn't allow active participants to begin receiving their RMD's until they retire. After the two plans are merged must the participants who were receiving their RMD payments under the MP plan still have this benefit available to them?

2) The MP plan offers lump sum, installment payments & QJSA. The 401(k) offers lump sum and installments and for the post-merged plan the client wants to eliminate installment payments. In reading through 1.411(d)-4 it appears that in-service distributions are protected but installments are not so long as a lump sum option is available. After amending the plan, do the participants who are already receiving installment payments continue to do so or because installments will be eliminated should new distribution paperwork be sent to them?

Thank you

I am reviewing a company manual for a construction company. They have an employee classification called "temporary worker", which is defined as "an employee hired with a short-term expectancy of employment (such as an employee hired for the summer)". I'm not finding an official definition for a "temporary worker."

In the company in question "temporary workers" are not eligible for company benefits, even though some stay 7-8 months, then become "regular" employees in the same or a different capacity. Regular employees become eligible for benefits after 90 days.

Is this ok?

Say a plan sponsor cannot meet their funding requirement for a plan year that just ended.

My understanding is that 412©(8) allows for a retroactive amendment to the beginning of a plan year made within 2 1/2 months after the close of such plan year.

It also seems that 412©(8)(B) allows for an amendment that can in effect freeze the accrued benefit as of the beginning of such plan year, thus meeting the criteria of "does not reduce the accrued benefit of any participant determined as of the beginning of the plan year to which the amendment applies"

However, 412©(8)© seems to contradict (B) where it says "does not reduce the accrued benefit of any participant determined as of the time of adoption", since the adoption occurs AFTER the close of the plan year as compared to (B) above which refers to the BEGINNING of the plan year.

If, for example the plan is frozen as of the beginning of the plan year, it seems that a notice need not be filed with the Secretary. It seems that a notice s/b filed if the accrued benefit is reduced even lower than what the accrued benefit was as of the beginning of the plan year.

So for eg. if the AB were 1,000 as of the beginning of the plan year, it would be ok to freeze it at that time and amount, but it would require filing with the Secretary if the accrued benefit were reduced below $1,000.

I intentially make an aggressive interpretation.

Are there other interpretations? Any that have been supported with practical experience?

Thanks.

can anyone envision a plan design that incorporates a standard vesting schedule with normal retirment age as 65/5 and an additional provision that says all participants are vested at age 60 upon termination?

Looking for direction - Law firm with 115 employees. Would like to implement a cafeteria style program where employees are given x-amount of $ to spend on their various plans. Group currently offers stand-alone POS for medical, PPO dental, VSP vision, AFLAC.

Questions:

1. For a group this size wouldn't we need to include an HMO for the med and DHMO for dent and any other buy-up programs to maximumize cost savings and benefits offering?

2. Wouldn't plan need to require employees to pick core ploans (i.e., med, dent, Vis) with left over $ to spend on voluntary lines or for FSA?

Any other thoughts???

The EGTRRA tax credit of up to $500 for the first 3 years of plan operation......Does anyone know exactly where (eg what line) this is reported at on the company's tax return? In this specific case, its a sole prop.

Thanks