I am trying to raise enough money for a down payment on a house that I want to buy. I started investing in a Traditional IRA account 3 years ago and opened a Roth IRA one year ago. I am 41 years old. If I wanted to close these accounts now to use this money for the purchase of a first home, would I be able to close them and receive my money? If I can, would there be a penalty? If anyone can answer these questions, I'd appreciate it. Thanks.

Having a SEP and ROth both, meeting income limitations

Even tho I see similar questions and answers in this forum I would like to hear it one more time all together. Given the following information can I transfer funds in an existing traditional IRA to an existing Roth IRA? I am aware that there are tax consequences. Is there a limitation as to the amount I can transfer or how many transfers can be made in a given time period? Is the llimitaion the same for traditional to Roth and traditional to traditional? Is this limitation the same for transfers from one institution to another and for transfers within an institution. Information; Age 63 married filing jointly with AGI less than $100,000 and no income from wages, salary, etc.

Does your company perform health plan dependent eligibility audits? Our health plan administrators handle student status verification for us. We are beginning to work on spouse and domestic partner audits. We have recently uncovered through non-audit means significant fraud that cost big $$$$. (Mom enrolled as wife; we were notified by health plan 6 years down the line--at least they caught it--but six digit $$ of services from one of our self-funded plans went out the window; needless to say, the EE doesn't work here anymore).

The IRS says we can rely on certification of the employee. Do you require any certification of marriage when a new hire enrolls a spouse in benefits? Or, when there is a QSC of marriage? Do you have a general certification document or on-line/VRU questionnaire that you use?

For domestic partners, do you audit or pre-certify those who claim their DP as tax dependent and thus pay premiums pre-tax?

If you do require certification, do you ask for it annual.

We are a big employer--nearly 150,000 benefits eligible employees.

Thanks for your insights!

Sarikfan

This is the current practice at my company and is great for employees, but I can't find anything to support it.

Again, scenario is that employee has a qualified status change that allows her to change her FSA election. She chooses to stop making additional premium/contributions, but employer keeps her as a "non-contributing participant" so she can submit expenses for reimbursement for services, etc. incurred after she stopped making contributions.

Is this permitted? Can she continue to submit expenses incurred through the end of the plan year up to the amount of her reduced annual election ?

Or, can she only be reimbursed for eligible expenses incurred before she stopped making her contributions?

Or maybe something different?

I have been digging in EBIA Cafeteria Guide XXI C. Example 1 makes reference to changing to 0 premiums, but this is not how we treat changes. In the other examples (blended method), there is no mention of changing to 0 premiums.

I am interested to hear how you handle this.

Thanks!

Sarikfan

First, I would like to reference a portion of Rev. Rul. 76-259 regarding offset plans.

"A separate issued raised by the arrangement considered in this Revenue Ruling is the method of determining whether the accrued benefit of a defined benefit plan in such an arrangement satisfies the requirements of section 411(b)(1) of the Code. Such accrued benefit will be deemed to satisfy the requirements of section411(b)(1) of the Code if each of the following two conditions is satisfied:

(1) the accrued benefit under the defined benefit plan determined without regard to the offset derived from the profit-sharing plan satisfies the requirements of section 411(b)(1) of the Code; and

(2) the offset to the benefit otherwise payable is equal to the amount deemed provided on the determination date by the vested portion of the account balance in the profit-sharing plan (plus the additional amount that would have been provided by any prior distribution from the account balance).

The requirements of the second condition in the preceding sentence will not fail to be satisfied merely because the defined benefit plan states that only a specified portion of the vested account balance will be the offset. Thus, for example, in the case of a contributory profit-sharing plan, the defined benefit plan may specify that the offset is limited to the vested portion of the account balance attributable to employer contributions as determined under the profit-sharing plan."

What I am trying to determine is if it's allowable to offset DB benefits each year by the current year allocations in a DC plan, not the typical offset using the account balance. It seems to me that the first sentence of the fourth paragraph I copied alludes to this being permissible. What do you think?

Our plan allows deferrals of up to 50% of compensation. Are these the types of limits the final 414(v) regs are talking about in the cash availability (75% or more) rules?? Isn't our 50% limit an employer provided limit that is acceptable? Is the cash availability limit referring to something else?

I know that a 401(k) loan is not considered in default if payments are missed while the employee is on military leave, but I have a slightly different situation: an employee who is already out on military leave wants to take out a 401(k) loan. Is there any problem associated with giving a loan that you know will be in default immediately? (Actually, he offered to mail in his personal check each month, but the loan provisions say that payments must be made via payroll deduction.)

I have the financial advisor of a plan owner/trustee/participant calling asking me about this person being able to possibly contribute an additional $15k over the next 5 years as a "life time catch-up" contribution (this is in addition to the 402(g) and $2k catch-up that she may make this year). He also mentioned a "special election A," also called "year of seperation of service limit," that allows additional contributions.

The company is non-profit and has a 2 year old 401(k) plan. They formally had a 403(b), I believe, that was not administered by us. I have never heard of either of these two items that the finacial advisor has mentioned. Am I out of the loop? Can anyone shead some light on the subject for me? He also mentioned publication 571, which I am going to look for now.

Thanks for your help, guys!

Don't know where to put this, so I"ll try it here.

Question: Does anyone know where I could find a SAS70 engagement letter? We are pondering performing a SAS70 audit and obviously need this to start.

Thanks for any assistance.

I have two separate 403(b) TSA's. Both have grandfathered pre-1987 contributions. I am currently 71 years old. Can I transfer these two 403(b)s to a new custodian and combine them into one new 403(b) and still maintain the grandfathered contribution amounts so that portion is subject to the minimum required distributions begin at age 75?

Likewise, if I transfer these assets to an IRA, can I maintain the grandfathered amounts that are subject to age 75 RMD's?

Thank you for your help.

Mark

Has anyone heard anything to the effect that the January 31 RMD reporting requirement has/will be eliminated?

Box 11 of the "Instructions to Participant" on the 2003 Form 5498 on the IRS website still bears the legend "The amount, or offer to compute the amount, and date of the RMD will be furnished to you by January 31 either on Form 5498 (in the blank box to the left of box 10) or in a separate statement."

Sounds as though the IRS wants 5498s to be issued by Jan 31 instead of May 31.

I have a client who wishes to move all obligations and liabilities for a book entry nonqualified deferred compensation plan from each of its subsidiaries to the holding company. The subsidiaries contain all the employees and operations. The holding company has no employees or operations.

Can the client move all obligations and liabilities to pay NQDC to the holding company with assets that are only subject to the reach of the holding company's creditors? Subs have no liability and each subs general assets are not reachable to pay obligation or subject to holding company's general creditors.

A doctor wants to start a 401(k) plan. He is 100% owner/partner of a C-Corp and an LLC. Can he start a 401(k) plan for one entity while excluding the employees of the other entity? Since there is common ownership, I believe the answer is no. Would it matter if he changed ownership of the excludable target entity to his wife?

Can a plan use a safe harbor matching contribution formula and not be a safe harbor plan? If so, please explain why.

After many years of a plan's existence, suddenly the spouse is put forward as an employee to be included in the plan with his/her DOH well in the past with no compensation history! The explanation given - well he/she always worked in the business but did not take any compensation in the past!

Changing the plan's service requirement for eligibility to zero may not be a good option, as a DOH in the past may be a factor in maximizing the plan contribution.

So who is an Employee for pension plan participation purposes?

I have a client that is a partnership. The partnership is owned by several different corps, each with a single employee and each with its own plan. In addition, the partnership is a 1/8 owner of an LLC. The partnership has no employees, but the LLC does. Based on my analysis, they are all members of an affiliated service group and have failed the 410 coverage requirements (in addition to other problems). How do I fix this? I know about the VCP program, but practically how do I restore benefits?

The plan is a union/emplyer taft hartley pension plan. Normal retirement age is age 65. The plan is silent on delayed retirement.

Question: If a participant delays receiving benefits past age 65, must the plan actuarially adjust the participants benefit to reflect the delay?

Question: If yes, what mortality table and interest rate would be applicable?

Any help is appreciated.

Forgive me if this has already been “asked and answered” at one time……

My question is probably best posed as an example:

401(k) plan permits a pre-tax max of 20%, an after-tax max of 20% and a combined max of 20%.

Employee is age 50 or over.

Plan permits age 50-plus catch-up contributions.

Assume year is 2004-

Employee’s eligible pay is $100,000. Viewing this on an annual basis, absent the age 50-plus catch-up contribution feature, the employee can maximize pre-tax contributions and contributions in total by contributing $13,000 pre-tax and $7,000 after-tax for a total of $20,000.

Taking into consideration the age 50-plus catch-up contribution provisions, is the maximum the employee can contribute assuming max pre-tax contributions (A) $16,000 pre-tax and $7,000 after-tax for a total of $23,000, OR (B) $16,000 pre-tax and $4,000 after-tax for a total of $20,000.

In the case of (B) the employee is able to make “additional elective deferrals” but not additional contributions. I think the correct approach is (A) but I have not seen this addressed.

Thanks for any insight.

Does anyone know the process, user fees, etc. for submitting a 457 plan for an tax-exempt organization to the IRS?

I am a complete novice when it comes to these, so any information would be useful.