The attachment is a genuine pleading from the Second District of New York.

Response.pdf

IN april of 2002 a financial planner set me up with a ROTH IRA. Basically he told me it was the right thing to do.

Silly me, I actually trusted this guy from a very reputable brokerage firm known nationwide and consistantly ranked in the top five.

I get a call from a new guy who said he had taken over my account (I assume the old guy was fired) and that I exceed the AGI allowed for a roth (married, 167,000K) OOPPS sorry about that!

I am supposed to call him on Monday.. Now I am stressing all weekend about this. I have about 10K in the account. If I recharacterize it to a traditional ROTH, what penality do I pay? Do I need to pay any tax on this?

I would like to get out of this as pain free as possible. I do not qualify for any of the reasons allowing early withdrawl as well.

Thanks, would love an answer before monday.. I am stressed out!

Can anyone recommend a COBRA software program for a 2,000 life group?

Thanks!

I have a company that has left a controlled group due to ownership change. All participants received a safe harbor notice for the plan of the controlled group. The departing company is going to copy the old plan. Will a new safe harbor notice need to be distributed?

Company A is spinning off a division that will be bought by Company B. Employees of Company A (and the Spinoff) have a pension plan with vesting, Company B does not.

Who controls what happens to the employee's pension plan, Company A or B? What options can Company B take to deal with the new pension and liabilities? Will vesting transfer over? If the answer for all these questions is "depends", please let me know what the most common industry solution is.

Thanks,

Phil

The SUB fund would not appear to be exempt

from the 503 claims regulations, but does any

one know for certain whether they are covered

by the claims/appeals regulations?

I have a client that currently provides a 6% profit sharing to all plan participants. They have inquired about adding an additional layer of p/s for just their partners. I've done a preliminary test and it will pass the general test. I've advised them to fund this additional p/s after the close of the plan year once the general test has been completed. They want to fund on a pay period basis and forfeit the p/s from the partners if the general test fails. I know this isn't an acceptable method of correcting a general test but cannot find an authoritative source. Can anyone point me in the right direction?

Thanks!

Is anyone familiar with or have any experience with these types of entities? I see on freeERISA that there are a number of these "companies/offices" around the country that sponsor qualified retirement plans.

We have been approached by one in our state about taking over the admin for their 401(k) plan and we've been trying to determine what type of entity they are.

This is what we've been told by the plan sponsor:

- Chapter 13 Bankruptcy (nationwide) is supervised by the Department of Justice

- Congress created a U.S. Trustee who appoints trustees nationwide to run the office

- Chapter 13 Bankruptcy offices collect fees from debtors and this is what is used to run the office

- Chapter 13 Bankruptcy offices are non-profit organizations (however, trustee says there was nothing like a 1023 Form Application for Exemption filed)

- The appointed trustee for each office has control over the employees – they are not federal employees

- The trustee files a Schedule C for income received from the Chapter 13 Bankruptcy office but does not claim the wages paid to the employees

- The employees receive a W-2 from the Chapter 13 Bankruptcy office which has their own tax identification number – the IRS assigned a tax identification number based upon a filing status of “other – tax exempt trust”

- Chapter 13 Bankruptcy office files the W-2’s but there is no "company" return (either state or federal)

- Chapter 13 Bankruptcy office does not have a local business license

- The trustee says there was nothing like articles of incorporation or any other paperwork when they were set up

- Trustee says they are not part of any state or governmental agency.

Any ideas?

An individual owns and is the only employee of 2 different unrealted companies. The financial adviser has informed the individual that he/she can have two plans and contribute $20,000 to each plan.(there is no salary deferral). I am having a brain cramp and don't believe this is possible. Could someone confirm one way or the other. Thanks

I have a client with a 401(k) Plan. In 2001, the client failed to transmit the contributions in a timely fashion. To correct this problem, they utilized the VFC program. (They deposited the missing interest into the participant’s accounts, filed Form 5330, sent out the required notice, etc.) Now, for 2002, they have again failed to transmit the contributions in a timely fashion. According to the information I have read, they cannot use the VFC program because (1) they used it last year and (2) some of the deposits were not made until after the 180 day deadline. Can anyone confirm that the Plan cannot use the VFC program? If that is correct, what is next step/correction method used to fix this situation? Any help would be greatly appreciated.

We have a debate going over forfeited involuntary distributions and would like to know how others handle it. If we make an involuntary distribution and the check is not cashed within 6 months and we have made reasonable efforts to find a valid address, our plan requires that the benefit be forfeited. Of course, in many instances we cross a tax year before we forfeit the benefit. Say we made a distribution of $2,500 in 2002 and generated a 2002 Form 1099R; now we find out in 2003 that the check was never cashed. We know that the IRS considers the $2,500 as constructively received in 2002 and would expect to see that amount on the taxpayer's return.

Here's the debate:

One side says we should revalue the forfeited benefit when we eventually find the participant because of IRC 417(e). IF the GATT AIR goes up, the value could actually be lower at a later date. But, there's a 2002 Form 1099R out there that shows they constructively received a higher amount. And, what if the revalued benefit exceeds $5,000?

The other side says we reinstate the forfeited amount and pay a reasonable interest rate until we find the participant. That way the 2002 Form 1099R is still accurate since they had a claim of right to the $2,500 in 2002 but for failing to keep the plan informed of their change in address. We would only issue a Form 1099R in the subsequent tax year if the interest earned exceeded $600.

We can't be the only ones that deal with this issue. Anybody care to enter the debate?

does a plan sponsor need IRS approval to amend a plan 91 days after a determination letter is issued to retrocactively correct a disqualifying provision?

Any problem when an ineligible plan, using insurance polices as account investments, is designed to provide a in kind distributions to participants? Assume a participant is taxed on the FMV of the asset upon distribution.

What do you do when you have a plan that has elected prior year testing for ADP ACP and has discretionary match. How do you test if in the prior year the employer elected no match? There would be 0% for both NHCE and HCE...

The next year the employer elects to put match in. If you use prior year testing, the HCE ees would not be able to receive match? That doesn't seem right.

Does anyone know how to handle this? Where would I look this up?

Thanks

It is Year End request time again...in preparing our census request a co-worker brought up the point of the new Social Security Number use law.

Can we still request and receive the full Social Security Number of plan participants and employees?

Can someone direct me to the new regulations/laws regarding Social Security Number use. I've found the law changes for the state of California, but can't confirm this is a national law.

I would appreciate input as to how other TPAs are handling this issue for their 2003 calendar year plans.

Thanks!

Kim

I am engaging in some friendly discussion with our friends at the DOL regarding the use of what may or may not be a premium refund from an experience-rated health insurance contract.

In the course of researching the issues involved here, I have come across several references to an internal DOL memorandum written by Risa Sandler in 1994 which discusses the ERISA implications of premium refunds (i.e., whether they are or are not "plan assets"). Most of these references have popped up in the context of the demutualization discussions of a couple of years ago.

I have hunted high and low for a copy of this memorandum but have come up with zip so far. If anyone has a copy that they could send me, I would be eternally grateful.

Have a small DB plan that provides the deminimus benefit. The plan is co-sponsored by two sole proprietors (each participants in the plan and no other employees). One sole proprietor has yet to make a profit. Can we provide him with the deminimus benefit even though he has only had negative earnings so far?

How much is the SIMPLE catch-up for the current year?