We are leaping into the 1990's and actually administering new comparability plans. The document I am looking at has only 2 classes of employees. Each class shares in a different Pool of money. How do I allocate each Pool to the right group in Relius?

Thanks for any guidance.

Situation: 1 HCE, 1 NHCE, uses a standardized prototype document. On 12/31/01 the plan is top heavy.

Effective 1/1/02 plan restated on a non-std safe harbor 401(k) document.

If only deferrals and safe harbor match go into the plan from now on, is the plan top heavy?

The NHCE will not defer, so she will not receive a contribution.

We talked about top heavy safe harbor plans at Corbel's 401(k) update last week, and I'm more confused now than I was before.

Side issue: On restatement, could the NHCE sign one of those irrevocable waivers, and if so, would top heavy contributions (if the plan is top heavy) have to be made?

Thanks. Maverick

Has anyone had any experience with Delinquency funds? I have a multi-employer client who is contemplating creating a fund in which the penalties collected on late contributions from contributing employers are deposited. These amounts will then be used to help pay for the DC allocations for employees of other employers who have defaulted on their payments.

My questions are:

1) Is this possible?

2) What kind of fund is the delinquency fund? (VEBA?)

3) How can I legally transfer $$ from one trust to another?

P.S. I also posted this question on the Multi-employer board, but this board tends to get a lot more action.

I'm a single taxpayer and in past years have contributed only the $2000 to my Roth IRA and nothing to my regular IRAs that I had before Roth came around.

Question 1: can I contribute more than $2000 (if I have it) to my Roth?

Question 2: can I contribute to my regular IRA in addition to my Roth?

Is only the first $2000 tax deductible, and anything over and above that not deductible?

Note: I'm nowhere near the income limit for single taxpayers ($95,000 or so I think) so that's not an issue.

Has anyone had any experience with Delinquency funds? I have a client who is contemplating creating a fund in which the penalties collected on late contributions from contributing employers are deposited. These amounts will then be used to help pay for the DC allocations for employees of other employers who have defaulted on their payments.

My questions are:

1) Is this possible?

2) What kind of fund is the delinquency fund? (VEBA?)

3) How can I legally transfer $$ from one trust to another?

Is anyone aware of any PTEs that deal with Futures Clearing and Execution issues as they may relate to ERISA funds and affiliates. is this just an arms length rule or is there specific guidance.???

thanks in advance.

I don't have much experience with this funding method and I am having trouble duplicating the Normal Cost calculation from last year. I assumed that the Normal Cost = Pres. Value of Future NC / Average Temporary Annuity; where the Avg. Temp. Annuity = Pres Value of Future Comp / Total Current Comp (actives)

Last year's numbers look like this:

PV Fut Comp = 47,437,789

Current Comp (actives) = 2,781,666

Avg Temp Annuity calculated = 14.0398

How did this 14.0398 come about?

I converted some stocks in my IRA to ROTH IRA in 2001. It was a partial conversion. I wanted to recharacterize this partial conversion back to IRA before Oct 15, 2002 (due to tax burden). Since the conversion were all stocks and since then, my broker had sold some of those stocks he converted and purchased some new stocks in my Roth account. In recharacterization, do I just need to "reconvert" a "certain amount" of ROTH money back to IRA, regardless what stocks they are? Or if I can only 'reconvert' the same stofcks that I converted?

Second question: Since my last year's conversion was partial, I would like to make a new conversion (ON THE PORTION OF ira MONEY THAT i HAD NOT CONVERTED) in 2002? Am I allowed, to have a recharacterization (for the 2001 partial conversion as well as a confversion in 2002? If yes, and since both amounts sare in the same brokerage firm, am I runninig a risk of messing up with the IRS? I heard some one suggest that I better transfer the amount I want to convert this year to a new Roth account and have the new custodian brokerage firm do the 2002 conversion?

Any reply will be much appreciated. Thank you. Ivy

I'll be graduating from college in December, and I already have a Roth IRA. It was opened for me several years ago by my boyfriend's parents, and last year I made my first contributions of my own.

Since I will soon be making more money and have more to save, I want to make sure I am educated about my investments. Are there limits as to how much I can invest or how much I should invest? What do I need to know as far as the IRS is concerned?

If you can point me to some kind of tutorial or IRA FAQ, that would be great. I don't even know where to start looking, and this seems like a very confusing topic...maybe I'm making more of it than I should.

Thanks for you help.

Emily

If employees are receiving workers compensation for a number of months and then return to employment, does the time they are receiving workers comp. count for vesting purposes (for purposes of years of service credit and benefit accrual) under defined benefit and defined contribution plans. Both db pension and dc plans (ESOP, 401(k)) define the terms disability and recognized leaves of absence narrowly and workers comp would not seem to fit. A review of the state workers comp statute also did not provide specific guidance on this issue. Any guidance and suggestions would be appreciated.

Thank you.

I am working with a takeover plan. A 2000 terminated participant stopped paying on a loan in the last quarter of 2000. The prinicipal balance is about $5,000 (without accruing interest). She wants to take a lump-sum distribution from her 401(k) account (about $3,000). Should interest on the loan be accrued through the 1st Qt 2001 or through 2002? Even though she had a deemed distribution as of 3/31/01, should 20% tax still be withheld when she takes her lump sum in 2002 and/or should she receive a 2002 Form 1099R?

thanks

An ESOP Plan document (leveraged ESOP) allows the ESOP Committee to choose between Principal Only and Principal + Interest for the annual allocation of financed shares. This design was chosen for maximum flexibility. Anyone see a problem with the "definitely determinable" benefit requirement? In other words, is only one of these methods, to the exclusion of the other, allowed in the plan document?

Thanks in advance for any feedback.

anyone know reason(s) that hedge funds are not included in the Patriot Act but ERISA governed pension funds are????

this seems rather strange seeing that hedge funds have scant reporting requirements whereas pension funds are highly regulated. wouldnt it make sense that money laundering was much more rampant in the less regulated hedge fund world than highly regulated pensions?

am i missing something?

any thoughts?

I have been researching the issue of what is included in a debtor's bankruptcy estate as far as non-ERISA plans are concerned. I have been unable to find any authority dealing with church plan assets, however. I was wondering if anyone has any insight into how courts (specifically Michigan/6th Circuit Courts) will handle inclusion of a debtor's retirement plan assets.

My understanding is that, under Patterson v. Shumate, whether a debtor's retirement plan assets will be excluded from the bankruptcy estate under 11 U.S.C. 541©(2) is based on state OR federal law that clearly provides an anti-alienation provision, which Michigan apparently does not have in regard to church plans. My final determination, based on many factors, is that church plans must be included in the debtor's estate. I would really appreciate any information or authority to the contrary.

Thanks!

How do the consent rules of 401(a)(11)/417 now apply to 457(B) plans? Is consent of participant required for distributions in excess of $5000 or at all?

:confused:

How does the exclusive plan rule work? Is it an issue of no employee benefitting under 410(B)?

Can a company that sponsors a frozen, underfunded DB plan where nobody benefits under 410(B) maintain a simple IRA?

A former client of mine is being audited by the IRS for 2000. The IRS asked him for the original plan document, effective 1/1/90. My company took over the case in 1992 but we cannot find the original document and neither can the client (but we & the client remember that it was a KPMG prototype document). The IRS has told my client that since the plan document cannot be located, he believes the plan never to have been qualified, even though subsequent document have been located and the plan has been operated properly. So, the IRS wants to go back three years (as per the limitation period) and tax the client what the employees would have paid on their 1040s if no plan existed. We estimate the deferrals to be $300,000 for that period making the fine with an assumed 25% tax bracket $75,000!!!! Is it me or is this IRS auditor being totally screwy. The auditor has refered my client to Rev Proc 2001-17 which I have not read yet.

Any comments?

If a newly terminated participant has $8,000 in deferral money (obviously 100% vested) and $2,000 of 0% vested profit sharing money, is the participant considered 0% vested for forf purposes? And thus the forfeiture can occur prior to the participant taking a distribution (assuming 5 1-yr breaks have not passed)? Or do I have to wait until 5 years have passed (assuming the participant does not request a distribution) in order to forfeit the non-vested PS?

Corbel supplementary material to their prototype states "for purposes of these rules, a zero percent vested participant is treated as having received a distribution of the participant's vested account balance (ie zero) in the year of termination, causing the forfeiture to occur at that time." Language is silent as to whether we are just talking employer money, or all money sources.

Client wishes to use the terminated participant's unvested PS money now to offset the employer's liability for currently due PS contribution (this is an allowable use of forf's in accordance w/ their doc). Can we do this?

Thanks for any help.

The newly-released final rules on required minimum distributions state that a surviving spouse who is the sole beneficiary of a deceased spouse's 403(b)account may not treat the account as his or her own (see s. 1.403(B)-3, A-1.©(3)). (The rules are different for IRAs.) However, under EGTRRA, s. 402©(9) of the Code gives a surviving spouse the same rollover rights as the employee, i.e., a distribution from a 403(b)plan attributable to the deceased employee can be rolled over to any other eligible retirement plan, presumably in the spouse's own name.

How can the rule and the statute be reconciled?