The Florida Retirement System is offering its 600,000 participants a choice of 2 plans: The traditional Defined Benefit Pension Plan or the new Defined Contribution plan known as the Investment Plan. What are your views of the Investment Plan? See www.myfrs.com.

Peace,

Joel L. Frank

Are Employee Assistance Plans subject to the new HIPAA EDI & Privacy rules?

Plan Year end 2001. Plan is Top Heavy and cross-tested. Contribution to NHCs is 3%. NHC Jones enters plan mid-year & thus is entitled to 3% top heavy based on full year comp.

Q1. When doing the cross-test, I include full year comp in calculation of EBAR. Correct?

Q2. Assume same scenario except contribution to NHC is 8%. NHC Jones gets 8% of 2nd half comp and I only include 2nd half comp in calc of EBAR. Correct?

Thank goodness there are a lot of people a heck of a lot smarter and more experienced than me!!

Background - I am working on a 12/31/01 end-of-year valuation. The sponsor also has a 401(k) plan (w/ employer match). The maximum has always been limited by 25% of eligible compensation. The employer contributes monthly to the DB plan (this is necessary for their cash flow purposes). During 2000, the sponsor contributed over the maximum (excise tax was paid) by $27,000. The full amount was reported on the Schedule B, thus adding the non-deductible contribution to the credit balance.

This year, the minimum is $525,000 and the maximum is $541,000. Since there is a $27,000 carry over from last year, does that mean th must contribute $525,000 but can only deduct $514,000 ($541,000 - $27,000) of it?

Thank you for your help!

Hi- I can't believe this is so hard to figure out, but I've read thru all the IRS's forms, etc. and still am not sure of this...

I have 2 ROTH IRAs that were created in 2001. One is a ROTH Conversion (converted from a traditional IRA)- I'm fairly sure I need to report that on form 8606 and pay taxes on it this year, right?

The other is a new ROTH Contributory IRA. Do I have to pay taxes on the amount I opened it with/contributed to it or not (I did not exceed the maximum contributions- I opened it with the max amount and haven't contributed any more to it)? It seems like I would not, since it was created with after-tax income, so I shouldn't be taxed twice on it, I wouldn't think. Can anyone answer this definitively for me? I appreciate anything anyone can tell me about this-

Thanks!

Does anyone know when Corbel is releasing the 2001 SAR version?

I have a client who is not depositing employee contributions into their SAR-SEP plan in the required timeframe of the DOL/IRS . Where can I go on the Web to find the regulation and copy it so

I can show the client that what they are doing is not allowed.

Also is it a DOL or IRS requirement?Thanks.......Mike King

I have searched around in old posts, but am somewhat afraid to rely on these because of all the changes in the 457 area.

I am looking at a situation with a hospital who was a public entity with a 457 plan for employees. Effective 12/31/2001 the hospital is now a tax-exempt organization and is providing a 403b for employees and paying Social Security.

With plan termination they are allowing rollovers, if desired. There has been much debate and I have a few questions. This is not a strong point for me.

Would the original entity still exist? The hospital district no longer exists. Do the participants have a separation of service or are we talking same desk rule?

The 457 plan has a provision waiving all surrender charges, if there is a separation of service. Would the hospital have to distribute all assets under the plan with the loss of governmental status?

Thank you for any information / help --

Stephanie

Does anyone have a catch-up contribution form they will share?

Thank You

My client is setting up a plan to reimburse employees for premiums for coverage under a medical program for retired members of the military. The reimubursements are paid by the employer and are limited to premium reimbursements, so benefits are excluded from income under Code section 106. We don't have to worry about any issues under section 105 or 125.

Is there any argument that this program is not subject to COBRA or HIPAA? I think it probably is, but it sure would be nice not to give out COBRA notices to people who would gain no benefit COBRA coverage.

If a Federal employee defers money to theTSP, is it aggregated with other deferrals he may be entitled to make to a 403(B) or 401(k) plan subject to the one 402(g) limit?

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.