Please help...After I had already mailed my 2002 taxes, my dad told me that he made a $3000 contribution to my Roth IRA for me and that I would need to file an ammended tax return to make sure that the contribution is reported. I don't know much about the IRA because he is the one who set it up for me and makes the contributions. I know the contribution won't make any difference in what I owe on the taxes, but my dad says he is afraid that if it's not reported it may cause problems down the road when it's time to withdraw money from the IRA. I really don't want to go through the trouble of filing an ammended return, so I was wondering if anyone could tell me if it's really necessary to report the contribution. I get the impression that you only have to report a contribution if you're also doing a conversion.

I have read this board in depth, and the reoccurring theme seems to be to take out a Roth account with a "no load." From what I understand, a no load would only carry an annual service fee, with no front, or back end fees incurred. Although this seems to make the most sense from a savings standpoint, I have to wonder if a load account would, or could, hurt that much more in the long run. I have a broker/friend who would like to sign me up with a choice of one of many well known mutual fund providers. The names of these companies are well known and highly regarded in the investment world. The problem lies in my not really knowing how much of a commission this broker, and/or the mutual fund company well be taking from me. He tells me that there are no annual service fee's, and the commission the company takes is a small fraction of 1% of the interest that I might make off the investment. This seems very tolerable, but I do wonder what the salesperson himself will be making from my investment for the next 20 + years, if I keep it with him? I realize that everyone has to make a living, and I do not wish to be unreasonable about all this, but I would hate to think that up to 5% of my returns per year might be going into someone else's pocket! If this be the case, these extra percentages would be better off multiplying in my own fund, to be better served in my own pocket in later years! Would a no load account in this case not be better? How do I find out this commission information without being downright blunt about it? Or is this information hidden from me before and after I invest? I would like to invest with this person, but not at my own personal long term expense.

I believed that compensation used to deteremine employer matching contributions for SIMPLE-IRA plans had to be computed on the cash basis and therefore agree to the participants W-2s. An investment advisor believes that participants compensation must be (or can be) computed using the accrual method (i.e. wages earned in 2002 but paid in January 2003 are included in the participants comp when determining the employers 2002 matching contribution). I can not find any regs or notices on point to prove her wrong. Can you site any authoritative code or regs to settle this?

Can a brand new plan (effective 1/1/03) make everyone hired before the effective date 100% vested, and all others subject to a 4 year graded schedule?

My reading of the HIPAA regulations imposes the written authorization requirements on covered entities only.

However I understand that carriers are requiring TPAs to obtain authorization forms from individual participants in the group health plans they administer, in order to handle claims.

Wouldn't all TPA uses of PHI be covered under the business associate agreement with the covered entity, whether it be an insurance company or a self-funded plan?

I know there is no specific guidance. However, if a company that has a Safe Harbor 401(k) Plan buys a company that has a regular 401(k), could the plans merge in the middle of the Plan Year (they both have calendar year plan years) and still remain Safe Harbor?

Thanks

Can a DB plan (traditional or cash balance) provide for in-service hardship withdrawals?

Company X rolls out a new cafeteria plan in 2003. To improve its sales and save on medical costs, X ties the employer subsidy for insured medical to the salesperson's prior year sales, with the highest group obtaining an 80% subsidy, and each other group getting a 60%, 40% or 20% subsidy. Assume that all cafeteria plan nondiscrimination and coverage rules are satisfied.

To further incent its sales force, X proposes to give those salespersons in the 20, 40, and 60% subsidy brackets two chances to go to the next higher bracket during the year. If A's first quarter sales, on an annual basis would result in 150% of the level needed for the next higher subsidy level, then A will receive the higher subsidy level for the third and fourth quarters. If B's second quarter sales, on an annual basis, would result in 125% of the level needed for the next higher subsidy level, then B will receive the next higher subsidy level for the 4th quarter.

My question. Would the ability to increase mid-year the level of company subsidy qualify for the automatic cost or coverage change in status event?

In determining the Deficit Reduction Contribution for a January 1, 2003 valuation of a defined benefit plan, what mortality table is used to determine the DRC Current Liability using GATT assumptions? We know that the '94 GAR Mortality Table replaces GAM83 for determining lump sums, but can't determine whether the mortality table change also applies to the DRC calculation.

Thank you for your help.

Rolf Trautmann

How do you terminate a SIMPLE? I did not see any official guidance on this when I researched it. If the employer issues the annual notice saying it is providing an employer contribution, can the SIMPLE terminate in the middle of the year or does the employer have to wait until the next notice is issued to tell its employees that the SIMPLE is terminated?

A veteran with USERRA rights returns from military duty and is reemployed. Employer sponsors 401(k) plan. Veteran wants to make-up salary deferrals, but wants to do it using personal check, not future payroll deductions.

Is that allowed? What if plan has provisions that no after-tax contributions are allowed (i.e., that salary deferrals are the only employee contributions allowed)?

Profit sharing plan excludes union ee's.

Participant goes from nonunion to union and has a vested benefit.

Participant wants paid out.

We say no distributable event.

Is there anything that would permit this ee to receive a distribution just because they moved to an ineligible class of ee for plan participation?

thanks

How do I add these in Relius? through a DER or through a transaction? I allocated the 2002 TH contribution through a transaction, now I need to add the 2001 and 2000 TH contributions. What's the best way to do this?

I have a client who would like to take advantage of the cash-out feature in his retirement plan and distribute some small balances to several participants. He will be sending a letter telling the participants that they have 45 days to respond or a check will be sent, minus the 20% withholding. He will include the Special Tax Notice and distribution paperwork with his letter.

Does anyone have a sample letter that you would be willing to share?

We have a client who sponsors a profit sharing plan. One participant has been on workman's comp for several years. He's been carried as still employed on approved LOA, no allocations (plan is not t/h and they pass 410b without him), no BIS. He has requested a distribution of his vested account balance, but was told that he's considered to be still employed as long as he's on workman's comp. He says he'll resign if it will get him a distribution.Wouldn't that also stop his w/c payments?

The 100% owner of a small Company died in 2002.

The 2001 ADP testing was not completed before death occurred.

2001 test fails and refund to deceased HCE has not been made yet.

New owner of Company is setting up new plan for 2003 and merging old plan into new plan.

Should 2001 refund be made to HCE's beneficiary?

Should a one-to-one correction be made to the prior plan before merging with new plan?

As we prepare for Monday, I have a HIPAA question for which I have received conflicting information. Do I need to update my SPD with the entire Privacy Notice or can I use just a summary? We are doing it on line and will be finishing it today. My plan was to use a summary piece but I have heard otherwise from other employers at a recent benefits gathering.

Thanks.

Situation: terminated DB plan now with only inactive employees has been funded under the individual aggregate funding method. The liabilities exceed the assets. My first question is how is this a reasonable funding method when there is no methodology over which to spread the PVFNC? Would you consider no normal cost reasonable?

That being said, I don't see that I have the option to change funding methods pursuant to section 4.02 of Rev. Proc. 2000-40. The PVAB exceeds the assets as of the date of plan termination.

I am looking for recommendations and thoughts.

If a participant requests a 5-year loan, when does the 5-year clock start to run, (a) from the date the participant signs the promissory note; (b) the date the participant gets the check; or © the date the employer begins deducting repayments from the employee's payroll?

Is it ok to set up a 20 year internal loan (loan between the ESOP and the company) with a 0% interest rate?

The issue is 404 deduction limit and having no interest would be helpful.

I was also wondering if it is ok because the net result of a 20 year loan with 0% interest would be a principal only release method.