Here is a site for all of you who like to track legislation, especially if you can't remember or don't know the bill #.

http://www.senate.gov/pagelayout/legislati...eg_page.htm#top

A calendar year DB plan, owner, his wife and one participant covered by PBGC thru 2003. The one participant termed and was paid out in 2003. If the owner decides to terminate plan in early 2004, is he still considered covered by PBGC and must he file plan term with PBGC??? Thanks.

My question involves a possibility of age discrimination from cashing out a defined benefit pension for employees. IBM has a suit in progress which last I heard is under appeal. It is especially of interest to me as I worked for a competitor of IBM, and like IBM they cashed out my pension in 1995. At that time I was over 40 yrs old. The short of it is that the amount they cashed me out at I suspect is far lower than the value that I should have received, if I was left in the traditional plan. I was RIF'd in 2001, and I rolled over my cashed out pension to an IRA later that same year. The other factor is that I signed papers in return for a generous severance package, which releases the company for any claims that I might have against them.

If IBM loses in its appeal I believe it may have an impact on me. My questions: could I have a case against the successor to the company that released me? Should I try to organize others in my situation? Any advise?

Mo

Hi ~

I am interested in starting some Roth IRA's for my children, ages 14 and 12. I have some very basic questions that I hope you don't find too simple. I am a product of a divorce where the husband handled all of the financial "stuff" and now here I am playing information catch up at age 38. Some of us are slower learners in life than others ;-)

What is the maximum amount that they can put in a Roth IRA?

Do they have to show proof of income? (they earned money via chores, yardwork, etc. on a cash basis)

Are there any other pieces of information that I should be aware of when starting a Roth IRA for them?

Will their Roth IRA be tied to my income, etc. in any way? If so, what are the limitations/guidelines?

Do they have until April 15th to start a Roth IRA for last year (2003)?

Thank you so much for any and all guidance that you may be able to provide.

Warm Regards,

Vanessa

About 100 days ago, by mistake, I transferred Roth IRA funds into a SEP IRA account. My Roth account was

a conversion (paid tax over four years) from 1998. Is it possible to reverse this error? Will I have to pay taxes

and/or penaty? The current holder (Trustee?) of the Roth money that now sits in the SEP account, wants me to

complete an "IRA Removal of Excess" form to get the Roth money out of the SEP account. Now what happens?

In 1998 I converted $4000 from a traditional IRA to a Roth IRA. I split the amount over the next four years as income on my tax statements, but never contributed to the Roth.

In 2003, after 5 years, I closed the Roth IRA and received $3500 in distributions (loss of $500). The information in Pub 590 and other sources doens't make it clear to me if:

1) The $3500 is taxable (I don't see why it should be, wasn't that the point of splitting the amount to four chunks of $1000 each for 1998 through 2001?)

2) If the 10% penalty must be applied, and if so, in which tax form?

Thanks

Miguel

Hi All,

I received a 2003 Form 1099-R from a former employer of mine reporting federal withholding on a loan I had taken back in 2000. Here's the history:

I took a loan and hardship from the plan while I was still employed (of course), and I left the company shortly thereafter. They issued me a 1099-R for 2000 reporting the hardship and loan (with distribution code 1L) without federal withholding (because none was withheld at my request). When I took the loan and hardship I left a very small balance of about $200.00 remaining in my account. I never received a statement, but I was able to access my account online. In 2003, I noticed my very small balance was gone. I contacted an employee at the company and they notified me that the balance was submitted to the IRS as withholding on the loan I had taken in 2000. I thought that was fine I will just get that money back when I file my taxes, but I just received the 1099-R for 2003 with the gross distribution and taxable amount of $1,421.57 (the amount of the loan I had taken) and federal income tax withheld of $175.14.

Now, I already paid the penalty and taxes on the loan (and hardship) back in 2000 and this 2003 1099-R I got looks to me like I'm going to pay the penalty on the loan again.

I guess my first question is: can they just take my money and deposit as withholding on a loan I took 3 years ago (I can understand that they would deposit it as withholding because they couldn't locate me since I've moved 2 times since I've worked there)? And my second question is: shouldn't the gross distribution and taxable amount be zero, since there was no distribution taken in 2003? If so, do I just need to notifiy my former employer in writing and ask them to correct the 1099-R?

I'm sorry this is so wordy, but I felt you needed the entire story to get the full picture. Any help would be very appreciated.

In 2003, I over contributed to the profit sharing part of my company's 401k plan. My company is an LLC and I am the sole owner.

I simply put too much money (about $7,000) in the 401K during December 2003 based on my earnings.

How do I go about withdrawing these funds and what reason do I use to explain to the IRS why I am doing this?

Thanks for your help.

A client has a calendar year 401(k) plan with a match of 25% on the first 6% of deferrals. The match is funded annually after the end of the year. They have not yet made the matching contribution for 2003.

For the 2003 plan year the plan fails the ADP test so we are returning excess contributions to two of the HCE’s and will forfeit their related match. The plan document says forfeitures are to be used to reduce the employer’s match.

When the match is made a portion of it will be forfeited and the forfeitures are supposed to reduce the match. But, how can it reduce the match if the full match has already been made?

Since we cannot use the forfeiture to reduce the 2003 contribution could we use it to reduce the 2004 match?

Any comments would be greatly appreciated.

Is there any report that shows me Post 88 deferrals. I know I can go into Census & see it, but there are several different funds & it will take me forever to do the math.

Thanks for any help.

I know that you do not have to file a 5307, but when is it typically due? I.E., I recall something like the plan year following the plan year in which you amend the plan?

Thanks,

Ronnie

A plan has been a controlled group for the past few years. All companies of the controlled group adopted the same plan. Last year due to ownership changes one company is no longer part of the controlled group. When testing this plan, would it be tested as part of the controlled group or we it be treated as a multiple employer plan?

Assume Organization A acts as an IRA custodian. If Organization A or any of its affiliates participate in the underwriting syndicate of an initial public offering (IPO), is Organization A prohibited from offering shares of the IPO to its IRA owners by reason of its participation in the underwriting syndicate. My concern is that the IRA's purchase of shares in the IPO could be considered a prohibited transaction.

If a client amends their plan to remove the safe-harbor language for a prospective plan year, when can they switch to "prior" year testing?

Since the plan must default to current year testing while a safe harbor 401(k), does this automatically "lock" them in for the five-year period, whereby they would need to submit for an approval letter to utilize prior year testing?

Any thoughts????

Calendar year/plan year. Deferral limit written into the plan is 1-15%. Employer wanted to take advantage of the EGTRRA change and decided to allow (beginning 4-03) participants to defer the maximum dollar amount allowable (which in many cases exceeded 15%) BUT forgot to tell us until now (post '03). Would a retroactive amendment be acceptable?

Employer had several lump sum distributions that were processed by their investment firm. Investment firm sent entire balance to participant and did not withhold any taxes.

Obviously, in preparing the 1099-R's we would need to show "0" tax withholding, but my question is -

Is the employer required to withhold taxes from the distributions? Meaning, if they do not withhold anything are they on the hook for anything?

Thanks,

Ronnie

In reviewing our QDRO procedures, it's been noted that we do not approve any DRO that requires the calculation of any gains/losses from the date of division to the date of distribution. Our procedure has been to segregate the amount in the DRO as of the date of receipt but that amount is kept uninvested. This doesn't seem correct to me. The way I read the regs is that while the DRO is being determined to be qualified or not, the amount that would have been payable to the alt. payee (if the DRO had been determined to be qualified) should be segregated and gains/losses should accrue as normal. If the DRO is determined to be qualified, then the amount that has been segregated, which should include gains/loss, is paid to the alt. payee. Is this correct? If so, is the segregated amount kept invested in the same manner as the participant's?

If this is correct, at what point does the 18-month period start? Upon receipt of the DRO? For example, if I receive a DRO today that has an order to pay 50% of benefits as of 12/1/03, do I need segregate the amount as of that date and calculate gains/loss up until today? Or do I segregate the amount as of 12/31/03 and let the gains/loss accrue starting today and disregard the period between 12/31/03 and the date the DRO was received?

Thanks for any help!

I seem to remember that either the IRS or DOL published a brochure on QDROs, but could not find it on their websites. If there is something available please provide the link.

SITUATION:

Divorce decree says Jane gets 50% John's 401k. Attorney for John doesn't want to do a qdro because "it's not in the divorce decree". I guess he just wants John to take an in-service dist and give the money to Jane. Doesn't make sense to me, since dist would be taxable to John, and he would have to pay early w/d penalties.

I'd like to give John's atty something that explains the nuts and bolts of QDROs. Thanks.

I am going to start putting money into a Roth for 2004. Does anyone have any advice on which Vanguard fund to put the money into? Thank you.

I used to be in a construction union and have approx. $40,000.00 in their multi-employer pension plan. I believe it was a defined benefit plan. I no longer work with them.

And I want to get the $$$$ and put in an IRA or something. The company that manages the plan refuses to give me my money. Do I have any recourse against the managing company? Can I get my money? I am not old enough for the normal retirement, at 62 years. Thanks.

JWD