Is there any written guidance from the IRS about requesting a private letter ruling for a 403(B) plan (since determination letters aren't issued for these plans)? Can non-standardized prototype plans get a PLR?

In 2001 I made Roth IRA contributions on a monthly basis until June of 2001. Then realized that income would be such in 2001 that Roth IRA for 2001 would not be available. Requested Roth IRA contributions to be recharacterized as IRA contributions for 2001 (they would be nondeductible)...and made no more contributions for the year.

The 2001 5498 received indicates in box 10 the Roth IRA contributions, and type of IRA in box 7 of ROth IRA. Received a second 2001 5498 with an amount in box 4 of "recharacterized CONTRIBUTIONS" and Type of IRA 'Rechar IRA".

Is this correct?

A rollover distribution was made from a 401(k) plan. The check was cashed by the institution after the participant decided against starting an account at said institution (changed his mind).

The institution then issued a check payable to the original trustee in the name of the plan. The participant signed a 30 day waiver. Can the plan accept this check? Is this a prohibited transaction? In general, are there any problems we need to be aware of? Any input is appreciated.

:confused:

We just liquidated our IRA to pay off some high interest credit card debt. But we have a question concerning our taxes. We have contributed more than we are getting back, because the IRA is not earning. Thus we have no earnings to tax. (We had them withold the 10% penalty.) Does this mean we get away without paying any further taxes on this money, since we were losing and not gaining?

Any information you can give us would be great! The fund is Marsico if that helps in any way. MFOCX

Two questions regarding after-tax basis recovery.

1. Plan utilizes separate contract method for basis recovery. Total basis = 1000, separate contract balance = 900. If participant reduces separate contract via distribution to zero, is the remaining basis of 100 lost to participant, or recoverable during some subsequent event?

2. Plan does not provide for after-tax contribution but allows loans. Participant defaults on loan, and subsequently resumes payments, creating basis. In a separate contract environment, when would basis be recoverable?

Two questions regarding after-tax basis recovery.

1. Plan utilizes separate contract method for basis recovery. Total basis = 1000, separate contract balance = 900. If participant reduces separate contract via distribution to zero, is the remaining basis of 100 lost to participant, or recoverable during some subsequent event?

2. Plan does not provide for after-tax contribution but allows loans. Participant defaults on loan, and subsequently resumes payments, creating basis. In a separate contract environment, when would basis be recoverable?

We are implementing a 457(B) plan for the top hat group of a non-profit organization. Obviously, the money deferred by the participants will not be taxable for Federal purposes at the time of deferral. However, are the funds subject to state taxes at the time of deferral ? Does it vary by state to state?

I appreciate your input.

LBK

If the plan permits it, an employee may transfer their 403b to a low-cost, no-load mutual fund provider.

Here are the websites for typical 403b7 providers:

1. Vanguard -

http://flagship2.vanguard.com/VGApp/hnw/In...403b7emplye.pdf

or:

www.vanguard.com --> select "Forms" --> select "Retirement Investing" category --> select "Vanguard Section 403(B)(7) Custodial Account Kit (for Employees)"

2. Fidelity –

Go to this website:

http://www.mysavingsatwork.com/mysavingsatwork.htm

Under "Select a Form" choose:

401 a/k/403b Transfer

Under "Select a Form" also choose:

403(B) Enroll

3. Citistreet –

http://www.citistreetonline.com/com/com_su...asp?lvl=3-3-0-0

4. Charles Schwab –

Note: For employee contributions only, not for employer contributions.

http://www.schwab.com/SchwabNOW/navigation...eSet/0,4528,518|7695,00.html

5. T. Rowe Price –

http://www.troweprice.com/retirement/plan4...253DENG,00.html

I've heard that the IRS has issued model language for 457(B) governmental plan amendments. Can some one point me in the direction of this language on the internet? Thanks for your help.

Kevin Lindahl

I recently received a DOL notice requesting that my company file a Schedule D for the 2000 plan year as the preparer last year specified on Schedule H that our plan(s) contain DFE assets. I have the collective trust information. My question: Do we need to list all funds that held assets last year or only those that held assets as of December 31, 2000? Also, I have heard that investments in mutual funds do not have to be listed - true? Both of these pieces of information came from the Trust Company who files Part 2 of Schedule D.

A DC Plan allows participants to take a fixed amount installment (i.e. $12,000/month = $144,000/year). The participant's account balance is currently $1.2 million.

Participant wants to elect 0% withholding, under the elective withholding rule.

The question at hand is when determining if the payments will exceed 10 years, is the initial account balance used exclusively ($1.2 million), without any consideration to the possibility of gains and losses?

If this is the case then the above scenario would payout in 8.3 years, not reaching the 10 year threshold necessary for a periodic payment, and thus the ability to electively withhold 0%, rather the mandatory 20% would be required.

Section 409(h) of the Code gives participants the right to demand that benefits be distributed in the form of employer stock and further gives the employee a "put" option which requires the employer to repurchase such shares at FMV. In the event an employer terminates its ESOP and its shares become delisted, how is the put option handled? Normally participants would be given "two bites" at the apple - a 60 day period beginning on the date of distribution and a similar 60 day period one year later. Are 2 bites required if the plan is terminated?

If a non-profit organization were to establish a 457 and 401(k) could the eligible employees defer 11K into each plan for a total of 22K, just like the 403(B) and 457 combination?

Two questions regarding after-tax basis recovery.

1. Plan utilizes separate contract method for basis recovery. Total basis = 1000, separate contract balance = 900. If participant reduces separate contract via distribution to zero, is the remaining basis of 100 lost to participant, or recoverable during some subsequent event?

2. Plan does not provide for after-tax contribution but allows loans. Participant defaults on loan, and subsequently resumes payments, creating basis. In a separate contract environment, when would basis be recoverable?

We are a large employer, and have always outsourced the preparation of our 5500 forms in past years.

This year we will be preparing the form ourselves. Any recommendations for software that someone who has no previous experience preparing these forms would be able to use?

An owner-employee who owns more than 5% of an S corporation takes a plan loan in 2001. Although EGTRRA revised the code to permit plan loans to owner-employees, the provision permitting such loans wasn't effective until 1/1/02. Therefore, the loan is a prohibited transaction from the date it was made in 2001 until December 31, 2001.

The loan has not been repaid as of this date. Therefore, what are we dealing with: (a) an ongoing prohibited transaction that was not cured by the EGTRRA change; (B) a prohibited transaction for the applicable part of 2001, but no prohibited transaction during 2002; or © no prohibited transaction for either year because you can't retroactively correct prohibited transaction and as of 1/1/02 it was no longer an ongoing PT?

I haven't been able to find any guidance on this. Anyone have any thoughts?

We do alot of year-end reporting and compliance work for our insurance company alliances. I have brokers asking if we can provide similar services for individual mutual fund families. Generally, I find that these mutual fund families promote a nationally bundled approach.

Does anybody know of 2 or 3 different mutual fund families that will provide year-end participant level recordkeeping (similar to a Nationwide) downloads that would work with Relius?

Thanks!

Is there any statutory authority for a statement by a well known brokerage house that a sole proprietor or partnership cannot sponsor a SIMPLE? In this particular case, there are two owner-employees only, no common law employees. Thanks.

Client is age 58 and wants to take $2,000 per month out of one of his IRAs beginning in 2002. In order to avoid the 10% penalty he will have to take distributions that are part of a "series of substantially equal periodic payments" based on his life expectancy.....AND has to continue to receive these payments for at least five years, right? Okay....

Question 1: Can we use old life expectancy tables or must we use new tables?

Question 2: Trying to determine which of his IRAs to take distribution from. His values change daily...so what date do I use to determine the value?

Example: $24,000 x 25.9 (old table) = $621,000 is how much he would need in his IRA to get him the $2,000 per month. Do I use values af of 12/31/01 or "current" value?

Any input is GREATLY appreciated.

We filed a DB plan termination that involves a reversion to the employer with the IRS for a determination letter. The IRS is now saying that any portion of the reversion that is due to using GATT rates (rather than the PBGC rates which were in the pre-GATT plan) is not due to "erroneous actuarial computation" and therefore cannot be part of the reversion. Apparently the only authority for this is an internal IRS memo from 1995. (The employer is a tax-exempt organization, so the excise tax is irrelevant.)

Has anyone else came accross this? Help!

(P.S. I posted this same question on the plan termination board.)