An employee is rolling over his terminated money purchase plan account balance to a conduit IRA

Since former retirement plan monies, is this protected against creditors should a personal bankrupty occur?

The employee also has the option to rollover the balance to employer's 401(k) plan

Would this be a safer route to go?

If a custodian instructs an investment manager to liquidate a substantial portfolio, and the investment manager follows those instructions, which of the parties do you feel is at fault if the custodian had no authority under the controlling documents (i.e., the custodial agreement) to give those instructions and the investment manager had no authority under the controlling documents (i.e., the investment management agreement) to follow those instructions? The custodian? The investment manager? Both of them (what percentage)?

Do you believe it is industry practice for these types of instructions to be funneled to the investment manager through the custodian, or do such instructions typically come directly from the person/group that has authority to issue those instructions (e.g., from the trustee)?

If you believe it is the industry practice for the custodian to act as a conduit to deliver instructions from the trustee to the investment manager, does that industry practice absolve or at least lessen the investment manager's responsibity for acting at the direction of an unauthorized individual (if you feel the investment manager has any responsibility at all)?

Thanks in advance for your input.

I'm not sure why, but a company has adopted 2 profit sharing plans. For good measure, the eligibility requirements are different for each plan. This results in plan 1 covering 9 ees (including the 2 HCEs) while Plan 2 allows 8 of these 9 ees (including the HCEs) to participate plus an additional ee not eligible for plan 1. At least the plans are not top heavy and their limitation years coincide.

If the er contributes 7.5% of pay to each plan would there be a discrimination issue for that one NHCE in each plan who receives 7.5% from that one plan while the other 8 participants get 15% total from the two plans?

Also, since total eligible compensation is different in each plan, how would the 15% of pay maximum between the two plans be calculated?

Is anyone aware of a new lawsuit involving nationwide for allegedly making too much money on certain mutual funds. the details i have are very scetchy but it could have something to do with sub-ta or subsidies the are paying record keepers.

I'm in need of some assistance regarding FICA alternative plans. The question has been asked of me by a client who currently maintains a 401(a) FICA alternative plan, if there is a way to allow participants to defer a part of their wages under an additional plan 457? perhaps? without messing up the current plan as it stands? The gov. entity currently makes a 10% contribution to the money purchase. I do not deal with these types of plans very often, so I would appreciate any help anyone can give .

I'm in need of some assistance regarding FICA alternative plans. The question has been asked of me by a client who currently maintains a 401(a) FICA alternative plan, if there is a way to allow participants to defer a part of their wages under an additional plan 457? perhaps? without messing up the current plan as it stands? The gov. entity currently makes a 10% contribution to the money purchase. I do not deal with these types of plans very often, so I would appreciate any help anyone can give .

Situation: Former employee has a substantial account balance, which includes a life insurance policy (cash value = 20,000). He wants to roll the non-life insurance assets to an IRA, but does not want to take a distribution equal to the cash value of the ins. policy.

In addition to lump sum payouts, the plan document allows annual installments. Can he roll the non-life ins. assets to an IRA (2002 annual installment), then take the policy as his annual installment in 2003?

Other:

He does not have the cash to pay in to the plan to replace the cash value.

Yes, I know he might be able to take a policy loan and use the proceeds to pay the taxes.

I luv life insurance in qualified plans. Thanks.

Maverick

I have a client that wants to have their 401(k) plan have a 3 month wait for salaried employees and a 12 month wait for hourly employees. Naturally, the salaried group has HCEs, and the hourly group doesn't. I assume that I have a discrimination problem - right? If yes, any comments or ideas on how I can make this work? TIA

Can I establish a $2000 Roth IRA for 2001 before April 15, 2002 and then contribute $3000 for 2002 shortly thereafter (in May)? Thanks!

I am looking for any documentation regarding the legal consequences if an employer does not notify their employees of their Plan's entry dates. Would this fall under the SPD notification? Thank you.

Plan permits a match contribution to the catch up contribution "in accordance with the formula specified in the adoption agreement."

If that formula is "50% of the participant's elective deferral which does not exceed 6% of the participant's compensation,"

What is the proper match for this participant?

Annual comp = $50,000

Elective Deferral = 10%

Match = 3%

Catch up contribution = 2%

Catch up match = ???

A. 1% (50% of 2% elective deferral)

B. 0% (max match is received because of elective deferral)

If somebody works past NRA in a cross tested plan, what testing age are people using for the annuity rate conversion, NRA or attained age?

Is there any 401K plan that is not subject to FICA?

Here is a question I need help with:

I have a 125 client who has had a very poor year in regard to employees signing up as participants, making claims and collecting their annual declared amount, and then terminating early in the plan year before all the payroll deductions can be made.

If at year-end (and after the grace period) a client's Flexible Spending Account balance is in the negative whose liability is the deficit? I presume that it is the Employer's responsibility to make up this deficit amount to the Plan Administrator.

Am I Correct?

Thanks for your help in this.

We are taking over a 401k plan that has been in existence for many years. In the process of the takeover it was discovered that several owners of the s-corporation currently have outstanding loans (repayments have been made since the initial withdrawals several years ago). How can this be corrected since they were withdrawn prior to the 1/1/2002 effective date that permits such transactions. Thank you.

I want to personally set up a 529 plan for my son's college education expenses. I'll be the sponsor and trustee. I'll hire an attorney to set up a trust. The trust will be named "Sec 529 Plan for Moe Howard, Jr". My family and I will make contributions to the trust. I'll choose the investments. I'll do all the accounting for the trust & I'll keep up with how $much of the trust's assets are owned by each contributor. The contributors will get full benefit of all income and gift tax breaks allowed under IRC 529. I'll get the trust an EIN and I'll make sure that contributors are informed that earning withdrawls not used for college education expenses are taxable.

In other words, I'll set up the plan myself and not use a "state-sponsored plan".

My Ouestion:

Where can I get a generic "529 plan document" to use as a guide in designing my 529 plan document? .... and does the IRS have to approve my plan document (do I have to request something like a determination letter ?).

Do I need to get permission from my state ?

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This is not a nonsense question. I actually have clients that want to do this. I have told them that only a state can sponsor a 529 plan and that although banks, insurance companies, brokers, and others can sell mutual funds (on behalf of state sponsored 529 plans) .... no bank, insurance company, broker, or other individual can SPONSOR a 529 plan.

Am I right or wrong? I can't find this in IRC 529. Does anyone know what sentence in IRC 529 says that a 529 plan can only be sponsored by a state ?

THANKS

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My company is just setting up a 403B, of which I am the administrator, and my payroll company tells me that FICA must be taken out of the employee contribution. It is my understanding that all contributions, up to the yearly limit, are completely tax free - that all deductions will be taken when disbursements are taken upon retirement, disability, etc. What is the correct information?

Sally G

My client is a member of a large controlled group. All of the members of the controlled group have filed for bankruptcy either under Chapter 7 or Chapter 11. Some of the liquidating entities are terminating their health plans (some of which are/were self-insured and some of which were fully insured). We know that under COBRA the employees and former employees covered under these plans are entitled to COBRA benefits under existing health plans within the controlled group. Unfortunately, the insurance company has indicated that they will not cover the employees from the other entities in the insured plan and the banks have indicated that they will not let the remaining companies continue if they offer self-insured plans to cover these individuals. What do we do? Can we establish a VEBA which used employee premiums to purchase the best major medical policy we can to cover what we can? It seems we are between a rock and a hard place.

Company A sponsors an ESOP with match and a 401(k) Plan. Plan Year End 3/31.

Company B sponsors 401(k) plan with a match. Plan Year End 12/31.

Company A bought Company B 1/1/00. Company B employees employed 12/31/99 were allowed into the ESOP as of 1/1/00.

The plans are being merged 1/1/02. This merger creates a short plan year for Company B employees and their 401(k) plan for 3/31/02.

What can be done for the Company B 401(k) annual additions testing? The deferrals, match, and compensation will all be from the period 1/1/02-3/31/02. Whereas the ESOP contribution will be based on 12 months of compensation (4/1/01 - 3/31/02).

If the test is calculated in this manner participants could fail the annual additions test with just their ESOP contribution. (10% of $170,000 = $17,000 which exceeds the $10,000 maximum under the short plan year.)

Is there a way to work this situation? Can Company B set the limitation year for the 401(k) Plan to the 12 month period? Are there other options?

Can an estate use the social security number of a deceased participant as its own tax ID or does the estate need to apply for a tax ID?