A law firm client maintains a profit sharing plan. Several partners made one-time irrevocable elections limiting their contributions to specific dollar amounts (e.g. $10,000). The law firm client is considering establishing a cash balance plan. Are these partners out of luck? I seem to recall a recent change regarding the application of the one-time irrevocable election rules. Any thoughts? Thanks. Ed

EGTRRA has made after-tax rollovers possible. I have read that if someone is rolling after-tax money into an IRA, it can be done through a direct or an indirect manner. However, for rollovers into a qualified plan, it can only be a direct rollover. Can anyone confirm whether or not this information is true? Can there be an in-direct rollover into a qualified plan?

An Actuary I know in CA says that he seems to remember an interview or something by Jim Hutchinson that said that the Service was allowing an exception to the Universal Availability that would permit the exclusion of "catch-up contribution eligible" participant that reside in nonconforming states, from the group of participants permitted to make catch-up contributions.

However, he cannot remember where or when he heard/saw it. I have not been able to verify his information.

Has anyone else heard of such an exclusion?

Also, how are your various firms, that have employees in both conforming & nonconforming states, handling the catch-up contributions?

Thanks

pcjackson

Are in-service distributions of employee elective deferrals allowed if participant has reached early retirement age as provided in plan document? early retirement age plan provisions call for age 55 and 10 years of service.

In one year, can you put $40,000 into a 401(a) plan and $12,000 into a 457(B) plan, both of which are sponsored by the same governmental employer?

Upon leaving my company, can I rollover 401K "after-tax" contributions to a separate IRA, and then convert that IRA to a Roth IRA, without a tax liability. It appears that according to Tax Code 408(d)(1) and(2), that I would be able to, but I need calrification.

I am trying to clear up some confusion regarding the states that have not conformed to EGTRRA. I understand that the extra $500 in 402(g) limits and catch up cont would be subject to state tax until or if these states conform but what about other provisions in EGTRRA like the new rollover rules allowing for rollover of after tax $ and the small bus. plan expense credit for new plans after 2001, would they be applicable in these states or not? Help!!:confused:

we are looking for ideas about how to reduce retiree medical program costs (cash flow, balance sheet accounting). The basis situation is that

- there is a large group of retirees,

- several unions, and

- SPD & plan documents they did not include the ability to terminate the plans.

- currently being reorganized under the protection of the bankruptcy courts (Under their proposed reorganization plan it looks like all creditors will get paid 100%).

We're are willing to consider any ideas no matter how innovative/aggressive.

I am preparing two 5500s to be filed under the DFVC program.

I will be sending the 5500s (w/o schedules) to the DFVC program of the PWBA in Atlanta, GA, along with the check for the penalties and a cover letter explaning the reason for the late filing.

I will send the complete 5500s and schedules to the PWBA in Lawrence, KS where we normally file.

What else do I need to do? Is there anything different I should include with my 5500 filing to Lawrence, KS? Any other suggestions?

Revenue Ruling 92-76 states the following: "The affected employees are the 25 highly compensated employees or highly compensated former employees of the employer who have the greatest compensation from the employer in the current or any prior plan year (“top 25 highly compensated employees”)."

Here and elsewhere, there does not seem to be a distinction between active employees and terminated vesteds on the one hand, and all employees who have ever worked for the company, whether they have been paid out or not, on the other.

I would be interested in perspectives on whether a narrow reading or a broad reading of the Top 25 pool applies.

If I have a non-safe harbor floor-offset plan am I still permitted to test the DB portion on gross benefits w/o regard to the offset, as I understand I'm permitted to do in a safe harbor F-O? The MP/PS plans have to be included in the avg. ben. test. Any other issues?Thank you.

Is there an inherent contradiction when a plan defaults a newly enrolled participant (who made no investment elections) into one of the plan's fund choices - yet claims to be a 404© compliant plan?

Does HIPAA allow, with a family status change, an employee to change from a High option plan to a Low option plan mid year?

We're putting together a VEBA for retiree health care (okay, I'll admit up front to not knowing much about VEBA's; I'm giving some nominal assistance to the partner I work for who is developing the VEBA for a multiemployer client).

He's asked about the use of QDROs to divide VEBA accounts upon divorce. I'm afraid I'm missing something. It seems possible; anyone have any experience?

Thanks!

Hi Everyone,

The long awaited EGTRRA Revised IRA Model Documents are now on the IRS Web Site.

March 2002 Revised Forms 5305; 5305A; 5305R; 5305RA; 5305S and 5305SA are now available for downloading from the IRS.

These accompany the SEP and SIMPLE Model IRS Forms released late last week.

IRS has not yet updated the title listing of these forms but the March Revisions appear in pdf format even though the Januaary 2000 date remains for the time being in each title header listing.

Remember that these forms need not be used until October 2, 2002 according to IRS Announcement 2002-49 released last week.

Has anyone yet seen specific, official IRS instructions relating to the "Amendment Procedure" for existing IRA customers for EGTRRRA changes. Lots of speculation but I have not seen anything official yet. I hope it is similiar to the 1998 IRS procedures permitting a "negative customer" response.

Cordially,

Dave Hammond

I am quite familiar with how a 457(B) works, however I am interested in the 457(f). I am not entirely clear on how this works - is it entirely salary reduction or can an employer make arbitrary contributions to it? I have a non-profit who wants to make contributions to the CEO and I am not sure if this plan fits the bill. Can someone please enlighten me - I would appreciate it!

Thanks,

Scott Dauenhauer, CFP

It's my understanding that NJ is NOT an EGTRRA conforming state, however the state tax code will recognize the new 401 (k) limits under EGTRRA. So far so good...

Now for the more difficult part of having a business in the Garden State (or any other EGTRRA non-conforming state), can we for example design or make an allocation to a Profit Sharing plan in excess of 15% of covered compensation? Are we dead in the water for permitting other EGTRRA provisions (e.g. enhanced rollovers, increased compensation and 415 limits, etc.) in a plan? Are we risking a plan disqualification at State level? I know at Federal level we're good, but what happens when Federal and State laws collide?

I haven't seen anything written about this subject and perhaps I can be lead to a good source of information. Does anyone have other thoughts about this mess?

Thanks for reading this message.

Woo-hoo, Iowa is a conforming EGTRRA state.

IN YOUR FACE-WISCONSIN!

Client would like to know the latest time frame for filing suit against their former TPA. It relates to the administration that was completed for the December 31, 1998 plan year end.

What does it mean, with respect to the administration of a welfare plan, to have "control administration"? Is this a term of art?