Hi all,

If a hospital maintains a 457 plan, does that hospital have access to participant funds in the event the hospital becomes insolvent? I thought that was the whole risk with a 457 plan. However, someone told me that once the assets are in a trust, they are basically untouchable.

Please help. Thanks.

I have a probably extremely naive question, but cannot find the answer. Say this year I contribute the max $$ to a ROth IRA becuase I am at AGI $95,000...right at cut off as single filer. In a year or 2 when my income goes up and exceeds the AGI the IRS allows for the year. Say for example, in 2006 I am making $130,000 and by law not allow mre than $115,000 AGI for single filers. I have some money in the ROTH IRA from previous years, I now have to make the money i already have in the ROth work becuase I am dead in the water for contributing any more. Is this correct? So I can screw around with the money I aleady have in there when my salary was not as high...allowing me to contribute and open a Roth IRa, but cannot contribute more to it at that point since i am making so much?

2nd question, I know there are tax consequences on this but I can roll a 401k into a traditional IRA then a ROth. My question is the contribution limits. FOr example say I have $10k in my 401k, roll to traditional, then roll into a Roth. SInce the ma yearly allowed is $4000, do I take distribution on the other $6k? Or am I allowed to roth all 10k into it and pay taxes on it?

Thanks for the help

Are there limits imposed by the IRS to the amount an employee can contribute after-tax to a 401k?

Has anyone heard of this product, or anything similar? The marketing material describes a Cash Balance with self-direction of investments. "It is a defined benefit plan that acts like a super 410(k) profit sharing plan...". Self-direction of investments in a db plan used to be an oxymoron. When did that change?

We have a plan participant in our Profit Sharing Plan that has a personal financial planner/broker for her personal assets. This participant's Profit Sharing and Safe Harbor account balances are held in commingled brokerage accounts with many type of investments (bonds, mutual funds, securities, etc.).

The participant's personal broker has contacted the Plan Administrator requesting the actual investments for the commingled accounts. The participant has already been provided with the 2003 Summary Annual Report.

The broker is under the impression that each participant has assets earmarked for each participant, which is not the case.

What is the Plan Administrator required to provide the broker under the law? What if he had a POA on behalf of the participant?

In order for a death benefit under a DB plan to be "incidental", the maximum benefit is limited to 100 x "anticipated monthly retirement benefit". What exactly is the "anticipated monthly retirement benefit"?

I suppose it means the accrued benefit projected to the normal retirment date based on anticipated service at normal retirement and projected compensation at normal retirement. In the projection of compensation, can the current compensation be projected based on the valuation salary increase assumption or should the current average compensation be used?

Sorry for the long post, but we do not want to approach legal unless absolutely necessary. I am recently married to a divorcee. Her previous husband of more than 20 years agreed to QDROs for his Bell Atlantic Savings Plan, ESOP and Pension Plan. The basis is a 50% award as of the date of filing for divorce (9/92).

My wife's attorney was a real jack-ass. From the final Judgment of Divorce in 1995, he chose to compose the QDROs instead of using the sample documents made available to him from Bell Atlantic ($$$$$ FEES). He was able to qualify the ESOP in 1996, but continually failed on the Savings Plan and the Pension Plan. At some point, he effectively stopped trying to prepare documents that would be the plan requirements. Further, he died about a year ago.

My wife is not an assertive person, nor has she any kind of understanding or knowledge in this complex area. About two months ago, she brought this to my attention and I have been working on this project with some degree of success and also have run into some problems. Hopefully, your comments and advice will prove to be helpful.

1. Her ex-husband has been and continues to take an adverserial approach to anything she does. In fact, he has all but disowned his three sons by their marriage. He has remarried with one daughter who was born before the divorce was filed.

2. I am not certain of the date, but Bell Atlantic merged and is now part of Verizon.

3. My wife did not elect to take her distribution from the ESOP after it was filed and qualified, although she does have written communication from the Bell Atlantic QDRO Unit.

4. Apparently, when Bell Atlantic merged, their own QDRO Unit was disbanded and Hewitt Associates is now the TPA.

5. Verizon Employee Benefits has no record of the Qualified Order on the ESOP! My wife does have written communication from Bell Atlantic describing the valuation, which was made available to her after the Order was qualifed. My understanding is that once the Order is qualifed, a seperate account is created for the benefit of the alternate payee.

6. I recently received written approval from Hewitt regarding the QDRO for the Pension Plan and will be getting the Order signed and sealed by the court within a few days.

7. The Order submitted for the Savings Plan was denied after review. The only reason for the denial was that they cannot permit under the existing plan a valuation date prior to January 1999. I am "assuming" that there was a change from the "Savings Plan" with Bell Atlantic upon the merger to Verizon and the plan is no longer is effect. Hewitt will approve the Order with a change to the new valuation date, but the participant will not approve and with a reasonable basis.

8. I spoke to DOL (EBSA). They directed me to communicate with the Plan Sponsor (Verizon) to determine what happened to the ESOP qualified order and how to deal with the valuation and distribution of the Savings Plan.

9. Hewitt denies having anything to do with the adminstration of the ESOP, but is making some kind of attempt to help via their contacts at Verizon.

10. You should know that the participant has retained counsel after copies of the proposed QDROs were presented to the court for seal and signature. However, in his attorney's letter to the court, he did specifically say that we would have no objection to any order that was approved by Hewitt.

11. I have found it virtually impossible to find a telephone number that a non-Verizon employee can use to reach Employee Benefits.

12. An finally, please... no lectures on my wife's not keeping track on this issue. She had to deal with three boys on her own that presented plenty of problems and issues.

So........

A. Even though there has been a merger/acquisition of Bell Atlantic to Verizon, I would presume that they should still be liable and accountable for failing to have the ESOP of the participant split into seperate accounts. Further, the fact that they seem unable to find ANYTHING regarding this order might suggest that they have failed their fiduciary responsibility in securing the rights of the alternate payee. My understanding under ERISA is that once the Order has been Qualified and accepted, the alternate payee has the same rights and protection as the plan participant.

B. I am pretty much confused as to my approach with the "Savings Plan". If that specific Plan was discontinued, I would hope that all records would be archived and a valuation for 9/1992 would be available. If that is the case and the 50% share is defined, can and how would that value be updated with the length of time involved. If the Plan was "changed" to it's current 401-k status, how should the alternate payee approach this situation.

C. Clearly, recordkeeping is very much an issue. If I should be stonewalled in trying to clear this matter, what remedies are available? Again, trying to speak directly to a Verizon manager in their Employee Benefits department has not yet been possible. Any ideas?

Once again, please excuse the length of this post. My intent was to cover every possible issue with clarity. Thank you in advance for any assistance you can provide.

Tom

I've been reading almost all of the threads in this message board for those starting the roth ira, and it has been plenty of help and very informative, but I'm still unclear on how everything works... I understand some of the things to consider.. such as expense ratio, NO LOAD fund, something that will be a "reasonable" performance.. However, I'm still a bit unclear about the entire process. I have lots of basic questions, so, I hope that it won't be too repetitive to answer.

So, just a little background on myself. I'm 20, junior at the university and is planning to open a roth ira, and i'm thinking my initial investment is probably going to be $2,000. I'm thinking that I'm going to go with Fidelity rather than vanguard, still unsure, but more than likely fidelity.

First, i know that i should be investing in more aggressive stocks? since i'm starting young. I'm not too sure if this really does matter, since it's only going to be starting off and trying to learn how this entire things works.. When i was looking at vanguard's website, I would probably consider myself a "balance" stock risk taker.. I'm not too sure which one those are, so I was hoping that people could give me some examples.. like, I'm thinking (FDEGX) which is fidelity aggressive growth fund?? i have no clue if that's a wise idea, or simply idiotic. or if I should go with something like the spartan 500 index fund (FSMKX), i know it's been suggested to go with index fund... and are these all mutual funds as oppose to stock?? no idea.

So, the next part of my question where I'm a bit confused is,.. let's say i choose the index fund, is all of the $2000 going to just (FSMKX)? and if so, then the next year, if i put in another $2000 or i choose to put it in monthly, do i put into FSMKX again or should i choose another one??? don't understand what happens afterwards (the first year i suppose).. but i'm sure that shouldn't be a main concern at this point, just curious.

Anwyays, I also understand that no one could possible tell me which is the right one to choose from.. but i have no direction.. which leads me to my other main concern. When peopel open up roth ira, is it mostly done online? I tend to like face to face interaction. I was thinking of going to see a fidelity representative to actually start this whole roth ira for me; but from my understanding.. this would cost more? Is it worth it? or if i should try to figure everything out and do the entire process online? If i do end up seeing the fidelity, do they charge much for it?

thanks in advance to those who do respond back for any help and insight!

I am new to insurance industry. I wanted to know, what OmniPlus is and how it can be implemented in Insurance Industry. It would be great if anyone can get me an idea where I can get the tutorials for OmniPlus or just give me an idea how it works.

Thanks

An employer has just adopted a profit sharing plan and plans to make a contribution by the due date of its tax return. Does the employer need to fund the plan with at least $1.00 before the end of the year in order for it to be established in 2004 or has that rule gone by the wayside?

Thanks.

Company A maintains a 401k profit sharing plan. The PS is discretionary. There is a group of 8 employees (managers) that the company would like to give an additional 3% ps contribution on top of the 2% it will give to all employees. All 8 of the "special" group are NHCE's although it is possbile that one or more may become HCE in the future. There is no way to know at the moment as compensation includes commissions.

Someone confirm for me that this is ok to do. I guess we need to name those specific people in the resolution stating this year's ps contribution.

Any comments?

Client has discovered that over the years it has been mis-counting the number of participants in its self-insured health plan. (Essentially it has not been counting a small group of part-time individuals who participate by taking limited hospital discount benefits under the plan because they are not eligible for the major medical portion.)

The actual number of participants is not material to the filing in the sense that the plan has always been well over 100 and has been keeping up with annual filing.

My inclination is to correct the error going forward but not worry about trying to come up with correction figures and amending the returns.

As anyone had any experience with discovering filing information errors that are insignificant or de minimus?

Existing MP plan with 1-year eligibility with rich formula with mostly doctors but a few employees. There is enough room under 25% deduction cap (404(a)(7) to add-on a modest DB plan for doctors only and still pass 401(a)(26), 410(b), and "maybe" 401(a)(4) depending on response to this quiry. The doctors would like the DB plan to have a 2-year wait to delay newly hired physicians into the plan. If both plan have different waiting periods can I still aggregate plans for 401(a)(4) general test for discrimination ? If so, do I use the 2-year wait and treat benefits earned before the 2-year wait (under the MP plan) as a disaggregated plan ? Thanks for any thoughts/opinions.

In the process of a 1/1/05 restatement, client wants to change the plan name to make it more descriptive.

Can we just start using the new name for 2005 filings without further explanation (employer name, plan number, etc still all the same)

I don't see anywhere on the Form 5500 to note that the name has changed.

Corp A is owned 100% by Owner A who is the sole owner and employee, who up until August of 2004 was also a 70% owner of LLC A. LLC A sponsors a 401k plan, to which no employer contributions have been made for 2004, including match. Owner A, who now does not have any ownership in LLC A, but is still the CEO, would like to set up a DB plan for 2004 for Corp A. This info may be a little vague, but its a start. Are there any controlled group or plan aggregation issues that would keep Owner A from setting up a DB plan for Corp A for 2004?? Thanks.

Hi everyone,

I was hoping that somewhere out there among all your expertise I would find an answer to this!

I have a 401k plan that terminated late 2003. Client has yet to pay out a few people. The one in particular I am worried about is a participant - still local - with a balance over 5,000. Distribution packets including special tax notice have been mailed and never returned.

The client knows the participant still lives there, they just won't respond. It is necessary to pay them out ASAP. All others are small balances that can be easily dealt with.

Any suggestions or anyone else know about anything the IRS will NOT approve? Our approach is that the spousal consent over 5,000 was not made to hold up a plan termination and perhaps an IRA rollover would be acceptable under a plan audit, if that ever may happen?

Thanks for any advice you can give.

Vicki

Corp A is owned 100% by Owner A who is the sole owner and employee, who up until August of 2004 was also a 70% owner of LLC A. LLC A sponsors a 401k plan, to which no employer contributions have been made for 2004, including match. Owner A, who now does not have any ownership in LLC A, but is still the CEO, would like to set up a DB plan for 2004 for Corp A. This info may be a little vague, but its a start. Are there any controlled group or plan aggregation issues that would keep Owner A from setting up a DB plan for Corp A for 2004?? Thanks.

Company has insured medical coverage available to all employees. Company pays premium for single coverage, employee's pay additional for family coverage thru 125 plan. Company also reimburses employees for medical claims until the insurance policy deductibles are met.

Question, can the nondiscrimination testing for the self-insured portion be limited to only those employees participating in the insured product? Many of the NHCE's have chosen to take family coverage through their spouse's plans. If they can be excluded on the basis that they chose not to participate in the insured portion there is no problem. If they cannot be excluded on that basis, there is a problem.

Any help is appreciated.

Can someone advise me on what is considered ok to reimburse for meals? From what I have read, I understand it to be only meals at a hospital or medical facility. I know in the past our company allowed meals at restaurants and such, but according to Pub 502 it doesn't include any of that. Grateful for any guidance I can get on this.

I would also appreciate thoughts and clarification regarding coverage of severance plans or severance arrangements under 409A and Notice 2005-1. Unfortunately, the discussion in Q&A-19(d) does not add much clarification to me on what arrangements are clearly covered or what is required of covered arrangements.

For example, assume a company provides, either under an employment agreement or an executive severance plan, the continuation of an involuntarily terminated employee's salary for a period of 18 months. Assume the benefits are provided to key employees among other non-union employees involuntarily terminated in a Reduction in Force so the transition relief provided in Q&A-19(d) is not applicable.

For cash-flow reasons, the company is forced to make the severance payments on a monthly basis rather than provide the severed employee 18 months of severance benefits in a lump sum upon termination. In this case, the employee arguably has a legally binding right during a taxable year to "compensation" that has not been actually or constructively received and included in gross income, and that, pursuant to the terms of the agreement is payable to the employee in a later year. The severance amounts cannot be unilateraly reduced or eliminated by the employer. I assume this arrangement constitutes a "deferral of compensation" under Notice 2005-1, Q&A-4?

If so, what does 409A require? The payouts of these severance amounts are to be made on a fixed schedule--basically at the time monthly payroll is paid to active employees so there will be 18 checks paid out to the terminated employee over the next 18 months. There is no option for the terminated employee to accelerate distribution of these amounts. The terminated employee never made an "election" with respect to such severance benefits except to sign the initial employment agreement and/or any general release required. The amounts are not funded so the rabbi trust and offshore rules are not applicable.

Assuming the above-described arrangement is subject to 409A, does it really need to be amended to comply with the new rules? Are there issues that I am missing. If the employer is publicly traded, would the 6-month delay on distributions to Key Employees apply to "distributions" of severance benefits as well? Doesn't that in many cases defeat the whole purpose of offering the severance benefits. Also, what if the severance benefits are all to be paid out in the same taxable year--say over 6 months--would that avoid 409A? What if it is only a 6-month payout but it starts at the end of one year and finishes early the next year--different result?

Any thoughts would be appreciated.