Can anyone please let me know what you do when an employer wires too much money and it is deposited into the trust account. For example, the payroll file is for $200,000 but the empoyer accidently has $220,000 wired to the trust. Do you force the employer to short their next wire because you can not take money out of the trust account once it is in there, or would you send the money back to the employer?

Anything you could cite would be greatly appreciated!

I have a former employee who wants to take a cash distribution. We live in a community property state which requires the spouse to sign the distribution form. Notary is NOT required. I have reason to believe that the participant is going to forge is wife's signature as I know he is getting divorced (small town!!).

What responsibility do I have, as administrator, to the wife? Do I need to verify she signed? Inform the trustee/employer? The trustee also signed off on the distribution form.

Approximately 2 months ago, Individual A received a termination distribution from the bank trustee of the employer’s plan. He deposited the check into his checking account, which happens to be at the same bank as the trustee.

Individual B filed fraud paperwork on the above check approximately one month later. This paperwork resulted in a withdrawal of the amount of the check from Individual A’s account by the bank/trustee pending investigation.

Individual B and Individual A are related and once lived at the same address. They have the same name and their SSN’s are very similar.

Individual B contends that Individual A stole his identification and Social Security card and assumed his identity.

Incidentally, Individual A apparently does not speak English very well and requires an interpreter. Individual B speaks fluent English.

The bank/trustee spoke with the employer who contended that whomever worked for them spoke fluent English.

Now the bank trustee has decided that it is the TPA’s problem (us) to deal with and are not pursuing the investigation any further. Individuals A and B have been directed to our firm.

It does not seem that we can make a definite determination as to who is entitled to the benefit. My thought is that we should return the distribution and the withheld taxes to the plan and await a court order relative to the distribution.

Does anyone else have any thoughts as to how to handle this? The amount involved is less than $5,000.

Does anyone know if the IRS has published the 2004 limitations for a transportation plan (section 132)?

Thanks.

Hello all,

Some years ago, with the the assistance of Benefits Link newsletters and other sites, such as 403bwise, I embarcked on the long and tedious task of addressing our ERISA 403b annuity retirement plan. With the advice and guidance received on various websites and forums, our Board of Directors has approved the change of providers and a change in Third Party Administrators, due to poor fee structures within the plan and unresponsive action by our TPA.

Our current scenario is as follows:

Our Board has decided it has not the resources to manage intelligently the 403b and has hired an Investment Advisor firm to renegotiate our current situation. The firm does not have a direct relationship with any investment company. (???)

The Boards decision was based on reducing fidutiary liability for the nonprofit, and I'm sure themselves as well, and to improve(lower) the cost structure within the plan and to provide ongoing responsible eduction to the participants. The Advisor will develop an Investment Plan Document, and will renegotiate our current situation with an alternate firm as well as other fidutiary responsiblities that are inherent with retirement plan management.

I'm somewhat hesitant about this!

After doing my "due diligence" and forcing members of our organization to address the issues of expense ridden annuities, I feel we may end up back on the same old boat as I was not involved with the selection process. I have requested that I participate in the discussions of the new plan provider selection process and review the transition from current to future providor.

My questions:

1) Is this acceptable or prudent? Or is this something that I should stear clear of?

2) If acceptable, what should the parameters of my involvment be? Typically, do participants have a say in the choices of plan selection and funding vehicles? As a realized functional fidutiary, is it imperative that I do get involved in the process?

I suppose my concern is that when perpetuating the initial awareness of plan fee issues, I had stirred up the pot, so to speak, and may have also put the fear of **insert diety** in some of our finance committee members.

3) With regard to a fairly young plan (4 yrs) that has a 10 year early withdraw penalty, can we negotiate our way out or typically is it the norm to start an additional plan and wait until the penatly phase lapses then transfer funds?

4) Can anyone offer me other advice on advising the advisor?

5) Has any one else gone through this action?

I have met with the advising firm and they appear to have our "best interests" in mind, although past experience leaves me somewhat nervous, as we all know the sales pitch. This is in no way a stab at all advisors, as many are very well qualified and perform substantial quality of service to individuals and organizations alike.

Respectfully,

WLP 1863

The DOL appears to be making pre-field audit inquiries into whether health plan sponsors properly allocated proceeds of the Principal's demutualization. The inquiry is only relevant if plan participants were required to pay all or part of health plan premiums for themselves or their dependents. The inquiries are not triggered by Form 5500 filings. I am seeking comments from other practitioners who have had to deal with such inquiries. Thanks.

Client had a money purchase plan for 5 years. During the 6th year, the client amended the money purchase plan to a profit sharing plan formula (in the middle of the year). What do you put on the form 5500? And do you attach a schedule R for the half of the year that the plan was a money purchase plan?

Ohio S-Corp. doing business in Ohio.

Has a section 125 provided by his payroll company.

Does not have a group health plan or offer any other employee benefits.

Employees are allowed to have the cost of the premiums for individual health insurance policies to be withheld pre tax. Then on behalf of the employee the client then remits the premium payment to whichever insurance company the employee has purchased the policy from.

This seems inappropriate to me. Can someone shed some light on this for me.

Thanks,

Michael J. McCormick, CPA

Cincinnati, Ohio

I have a client who would like to move money from a SIPP in the UK to a US based profit sharing plan. The client is a US citizen living in the US. I don't think the UK/US tax treaty would allow such a transfer but I'm not clear on this. Has anyone brought foreign retirement money into a US 401(a) plan or possibly an IRA.

Draper

IF a sponsor wants to have a defined benefit plan and a SEP, must they adopt a individually designed SEP; are there any model/prototype SEPs which can accomodate this configuration?

Draper

Hi -

I was hoping somebody to help me out with a life insurance (CSV) value question.

An individual has a collateral assignment split dollar life insurance arrangement with their employer. The policies premiums are paid in full. Taking advantage of the Final Reg. provided safe harbor, the policyholder decides to convert the arrangement to a loan arrangement and pay imputed interest on the amount of ER paid premiums.

My question is: If the executive decides to cash in the policy (say three years after making the election) does he/she pay tax on the cash surrender value?

Thanks for the help!

Mazzu

Just a reminder, advertising is for the Yellow Pages, this forum is for questions and

answers and general information. Questions about software, recommendations ect are fine,

direct advertising of specific products is not.

The plan distributes lump sums if the value is $5,000 or less. An error was made in the lump sum calculation- wrong benefit formula- and now people who received lump sums of $5,000 or less are due an additional benefit.

If the value of the new corrected benefit is over $5,000, but the additional value is less than $5,000, could the plan administrator distribute the additional value in the form of a lump sum? Does the answer depend on whether the discovery occurred in a subsequent tax year? For example, for MRD purposes, a participant that was subjected to the mandatory cash out rules in the 1st MRD year, would be entitled to additional accruals (lump sums) in subsequent years while still accruing.

I would think that if the underpayment error is discovered in a subsequent tax year, that the additional lump sum (say $1,000) could be distributed as a lump sum, but since the total value was in fact over $5,000, that it would be prudent for the plan administrator to obtain spousal/employee consent. If the error was discovered in the same tax year, the plan administrator should request the employee to return the dollars and process as an annuity. Looking for comments.

Thanks

Can a board of trustees of a health fund compromise a member's lien when the member's recovery will be little or nothing after the lien is repaid. (Even after the 1/3 is deducted for attorney's fees)?

Can anyone point me towards some authority for either position?

Thanks!!!!

We have a client who is in the process of offering supplemental insurance. Some of their employees has expressed interest in the insurance as long as their premiums for the year (or remaining balance of premiums) can be deducted from their bonus expected to be received a month after the beginning of the plan year. Can such an election be made? How about such an election for medical and dependent care flexible spending accounts?

I need to know what most of you are seeing regarding current trends of contributions by Employers. Due to the rising cost of health care and an unstable economy we are seeing Employers backing off of a stated match formula and going with a discretionary amount. Some are even discontinuing their match citing cash flow problems throughout the year..

Does anyone have any numbers or stats as to what new 401k plans are doing and what is happening to ongoing plans?

We have been asked to advise on this matter and I need some backup facts.

Thanks!

Client is a sole proprietor with no employees maintaining a profit sharing plan. One of the assets is a rental property that is owned as follws:

participant personal ownership 4/6

profit sharing plan 1/6

nephew of participant 1/6

Client would like profit sharing plan to buy out remaining 1/6 from newphew.

Does anyone see any issues with either the existing ownership structure of this property or proposed in relation to the ps plan.

Thanks

A 73 year old IRA holder withdraws funds for whatever reason. May they return the funds within 60 days to the IRA to avoid taxation in 2003? Obviously anybody under age 70 1/2 may do this, but does the law allow an over age 70 1/2 person to do so? The IRA holder will keep out funds necessary to cover the 2003 MRD.

Thanks for any responses.

Good day all, here are the specifics to my question:

1) 1998--used the 4 year conversion method to the ROTH IRA. Paid all appropriate taxes(over the 4 year period).

2) Roth IRA has been reduced due to recent economic conditions.

My question is if I need to, can I take all of my ROTH money out without any penalty or tax considerations?(value is less than when I started the account).

I have added new Roth money to my IRA's in parallel with the conversion.

I realize that my money is after tax money and normally the investment income would only be taxed? But, since i had a loss... I assume I could touch all of the money if it becomes necessary(assumption is not penalized for losses as I already paid taxes over the four years on essentially money that is no longer there).

Hope this makes sense. Appreciate your time.

I'm trying to confirm if the same Two-year rollover rule that applies to SIMPLE IRAs is applicable to SARSEPS. Does a participant have to wait 2 years before rolling over a SARSEP, tax free, to a qualified plan?