The new law (Job Creation and Worker Assistance Act - who dreams up these names) has new interest rates which are used for 2002 and 2003 plan years.

Specifically, the high interest rate used for deficit reduction calculations (quarterly contributions too) and the interest rate used for PBGC premiums.

The PBGC premium is easier because it just changes the 85% to 100% but everything else stays pretty much the same.

The other interest rate is used to determine whether quarterly contributions are needed (same for deficit reduction). The question is that one of the effects is to increase the funded percentage. Can this calculation be redone for the 2001 plan year so that 2002 does not require a contribution???

I think the answer is yes but am having trouble finding a cite.

Anybody agree???

Can I contribute to a SEP-IRA and IRA in same year?

Can I contribute to a SEP-IRA,an IRA and a 401(k) in same year (I quit one job and went self employed)? Thanks

Client converts regular IRA to Roth IRA, pays taxes on the recharacterization, then dies:

- there is estate tax due on the Roth IRA in the estate. Does the estate get a credit or deduction for the taxes paid on the Roth, or do you lose the taxes paid for recharacterization???

- could the estate go back and amend the tax return for the year of recharacterization and get back the taxes paid in this way??

Any help is much appreciated!

I have what I think might be a silly question.:confused: My brother started a IRA quite some years ago. He put an amount in which was around $1400 to $1500 (from what he could remember.) From there nothing else has been contributed. My questions are, is it possible for this IRA to have been wasted away from fees and or just bad investments? And if not how can I find how it is doing?

I put in $2000 each in a Roth for my wife and I for 2001. After doing my taxes, our AGI is $160,152, which makes us ineligible to contribute(by $152 measly dollars!). The $2000 is now worth about $2400. Can I recharacterize to a Traditional IRA without paying tax on the gain(I know, dumb question)? Does it make sense to do this or should I just withdrawal the money, pay tax on the earnings($400) and invest in a fund or stocks? We do not have a traditional IRA at this time. I prefer stocks/funds since I can get to this money at any time... Any advice is appreciated!!

Hi I'm having a tough time getting a correct answer to this problem and I'm wondering if you can help me. We have a client who has overcontributed to his 403B account for both the years 2000 and 2001…and it was just caught. We sent in overcontribution paperwork for him and they were only able to distribute the funds from the 2001 overcontribution. They said that the funds that were overcontributed for the year 2000 they would not be able to distribute because it is past 4/15/01 and that he would need to contact his tax advisor.

Here's the problem. The tax advisor does not know what to do, she's thinking that he should just leave the funds invested, decrease the amount of this year's total 403B contribution by that amount, and that should take care of it.

I have a 403B distribution form and a phone call to the client to make. Can anyone help me with what our options are here? Thank you!!

P.S. thanks Joel for sending me in the direction of this form.

I have a participant in a terminated 401(k) plan that will not send back in the distribution election form. His balance is $5,004, over the $5,000 limit to cash out, and he is in contact with the trustee but they cannot get him to return the form. Is there any recourse?

This may be a stupid question, but does the mandatory 20%withholding apply to a required minimum distribution due to attaining age 70 1/2? Thanks for any help!

Are there any privacy issues for a multiemployer collectively bargained pension plan in Texas which discusses disability claims at its meetings? Trustees, consultant, TPA, and attorney are present at the meetings. Final HIPAA regs apply to health plans, clearinghouses, and providers.

What happens if a corporation sends their TPA a matching contribution before march 15th, and the TPA forgets to deposit the money into the account? The corporation filed their tax return on the March 15th deadline. Would there be additonal penalties other than the corporation losing the deductibility of the money in the 2001 calendar year? The corporation could deduct the amount in 2002, couldn't they?

I would appreciate any feedback you may have on this topic.

Is a fee for service dental plan a benefit that employees could pre-tax under Section 125? It is not an insurance product. The members of the plan must use certain providers and pay a fixed fee for most dental procedures and receive a negotiated discount for other procedures.

This plan also has discounted vision,chiropractic,and some discounted prescriptions as long as they use providers that are members . Any help would be appreciated.

Paul

Are there any laws or codes governing the arbitrary offering of health Insurance benefits to employees as well as arbitrary waiting periods for each employee of the same company. Once an employee is given Insurance benefits is the employer committed to offer the other employees in his company the same benefits.

I am a U.S. Citizen who lives in Japan. I am currently unemployed and may choose to stay that way. My wife and I recently had a large windfall and want to invest it in bond funds for income preferrably in a tax deferred investment account.

Is is possible to open a Roth IRA in my situation?

We have 2 LTD plans that cover collectively bargainned unions.

As long as their is a claims review process in place spelled out in combination

of agreement/plan document, are these LTd plans exempr from the new claims

rules?

Any insight would be appreciated

We have a client that has two plans with different year ends. Top heavy testing aggregates those plans ending within the same calendar year. Under what rules would we test as of 2001 for 2002? The July 31 plan year ends 2001, so it doesn't seem logically to merit testing under the new rules. But the 401(k) plan ending 12/31/01 obviously is tested under the new rules. Any ideas?

say a participant has attained age 70 1/2 and began taking MRD from his dc plan in 2000 using the single life table. his beneficiary is his daughter. he dies and the daughter doesn't want to be taxed on the full balance. new MRD rules seem to indicate that she can continue the MRD, but that her life expectancy would be used, not the participant's. this seems available only if the plan utilizes the "alternative rule", rather than the "5-year rule" for purposes of determining when the distribution must be made.

questions are:

1. am i right?

2. if the plan does not currently utilize the alternative rule, can it be amended at this point to do so?

We have a Plan that has informed us considering terminating their 401(k) at the end of this year and doing a SIMPLE-IRA in 2003. They have until 12/31/02 to update their 401(k) document. If they decide to terminate the 401(k) in 2002, do we have to still put them in a new document or can we just use "tack on" amendments, similar to how we have handled it the past few years?

Employee goes on worker's comp. Only full-time employees are eligible for coverage under company's group health plan, so employee could have been dropped due to his reduced hours. However, company does not cut-off group health coverage, but continues to cover the employee on worker's comp just as if he were a "regular" employee. After 25 months, company discovers its error. Of course, company gave no COBRA notice when employee went out on worker's comp.

Is the company still obligated to offer COBRA to this individual or can the company "credit" the 25 months of coverage it provided against the COBRA maximum coverage period?

The regs (54.4980B-7, Q&A7) seem to allow the company to credit the alternative coverage. My concern is whether the failure to provide a COBRA notice is fatal to that position.

Any thoughts?

Question -

A small money purchase pension plan fails to make it's minimum contribution of $30,000 by the deadline of 9/15. The contribution is then made on 9/18.

I understand that the contribution deduction will be dissallowed, but will a 5330 need to be filed and will the excise tax be $3,000 for the 3 days in question?

Thanks,

Ronnie Wasel

Previously asked for experiences/interpretation of a Mandatory Victim Restitution Act garnishment of participant's qualified plan account. In the interest of protecting the Plan and the Trustee, the Trustee contested the garnishment. Federal court has now ordered Plan to pay the garnishment (Court essentially equated the MVRA judgment to an IRS levy.) Now, the questions are:

1. Is distribution exempt from 10% early distribution penalty?

2. Can the attorney fees for contesting the garnishment be paid from the Participant's account (as opposed to a Plan expense)? And, if so, is that a distribution or an expense? THANKS