My son is 1 and has done some baby modeling and we'd like to set up a roth for him... I'm not finding age limits anywhere. Also, if he has a separate tax return, does he, as a minor, fall outside of my income limit if I'm over the max allowed for a Roth? thanks.

In some other message on this board I saw someone say that their firm had a nice list of the comparative advantages and disadvantages of daily valuation vs. quarterly valuation. I can't find the message now but does anyone have something like this? We of course can make our own, but want to make sure we haven't left anything out.

Thanks!

We have required that participants make an affirmative election to waive the 30-day waiting period by checking a box on the distribution form. If the waiver box is not checked, we hold the distribution for 30-days. I realize this is a conservative approach and that many distribution forms include the waiver in the final certifications.

Now the latest safe-harbor Special Tax Notice, in the "Your Right to Waive the 30-Day Notice Period" section says a participant may waive the notice period by "making an affirmative election indicating whether or not (he) wishes to make a direct rollover."

To me this seems to imply that a waiver of the 30-day notice (affirmative or in the certifications) is not necessary on any distribution form with an election of a form of payment. In other words the only time the 30-day notice period will come into play is in default payments under $5000.

Does any one interpret this differently? Any one have an opinion on the advisability of relying on the author of the notice for administrative direction?

Facts: Employer sponsors a 401(a) qualified retirement plan that is invested entirely in insurance contracts or policies (annuities, generally). Thus, the plan is exempt from ERISA's trust requirement.

My question is how to treat separated participants. The annuity provider / insurer is telling us we do not have to count former employees as participants for purposes of reporting on the 5500. But I'm not sure that tracks with the Tax Code's distribution requirements. For example, what about the Code's requirement that distributions over $5,000 can be made only with the participant's consent, and if the participant is said to have taken a distribution, do we have to issue them a 1099?

As an example of how this can come up, imagine the plan has an operational failure & wants to use EPCRS. Most of the fees under EPCRS are governed by how many participants the plan has, or what the plan assets are. Do we count separated participants?

Also, for purposes of simplified 5500 reporting, do we consider separated employees to be participants when deciding if we have less than 100 participants?

Any advice, comments and shared experiences welcome. Citations to authority are specifically appreciated!

Employees initiating rollovers into our plan have been required to provide a copy of the IRS determination letter from the sending plan and certification that the money is all pretax.

We are now amending our plan to permit rollovers of pretax money from all eligible employer plans and IRAs.

We are trying to determine if we should we still require confirmation of the sending plan's qualified status and how we should certify that the money is all pretax. Has anyone else revisited this issue in light of EGTRRA?

Anyone dealt with a "restorative payment issue" in the context of a participant directed defined contribution plan where the participants' investment directions were not followed?

IRA participant designated as his beneficiary “trust”

He is now deceased. As a custodian, how should we proceed since the ‘trust’ was not identified?

It could be any trust

When is the last day to fund a 2001 Roth IRA that was established two years ago?

Can a Company, who currently sponsors a SIMPLE-IRA Plan, terminate the SIMPLE Plan and put in a 401(K) in the same calendar year. (I am pretty sure you cannot put in a SIMPLE in a calendar year that you have a 401(a) type plan - BUT is the reverse also not allowed)

I have made excessive non-deductible contributions to a traditional IRA in the years 1997 ($4000), 1998 ($4000) and 1999 ($4000) [don't ask me why I was so stupid!]. I understand that I have to pay a 6% penalty for each year I did not correct these mistakes, but the following issues are not clear to me:

1. If I remove these contributions in January 2002, do I have to pay the 6% penalty for 2001 (I do not remove the excess contributions in the calendar year 2001, but I will remove it before the deadline for the tax year 2001 in April 2002) [it is clear that I have to pay penalties for the years 1997 --> $240, 1998 --> $480, 1999 -> $720, 2000 --> $720]?

2. As the excess contributions were higher than $2000, do I have to add the removed excess contributions (plus any gains) to my taxable income (they were not deducted from my income in the corresponding years), and if yes, in which year, i.e. the complete sum to the taxable income in the year 2001, or to the years I made the excess contributions?

3. Can I put forward some of these excess contributions and apply them as contributions for 2001 and 2002 (of course still paying the 6% penalty for the years 1997, 1998, 1999 and 2000, and depending on the answer to 1. for 2001)? Can I select these amounts so that I reduce the excessive amounts for two years [let's say 1997 and 1998] to $2000, so that the amount to be removed would be $2000 or less for these two years, and therefore not to be added to my taxable income? Could I even go further this way, leave the excess contribution for 1999 in the account, pay the penalty for 2002 and apply part of it in 2003 as a contribution for 2003, and so also reduce this excess contribution to $2000?

May a State or Local public employee pension fund operate a 457 plan?

Does anyone have any comments on the story mentioned in Friday's Benefits Buzz about the recent DoL advisory opinion?

I work for a very small 501c3. We currently have a typical 403b plan with high expenses. I want to use the occasion of rewriting our plan document (due to GUST) to change to a vendor with lower fees. I am considering changing vendors (to TIAA-CREF) or changing plans to a 403b7 with Vanguard or even a 401K with someone else.

We usually have between 9 and 11 people on staff and between 7 and 10 participating in the plan at any one time. Of these participants, 4 are long-term employees, in their late 40's to mid-50's, who earn relatively high salaries. The remainder of the staff is much younger (often in mid- to late-20's), lower paid, and usually leave the organization within one or two years of beginning participation in the plan.

The organization contributes a fixed percentage of salary and we allow elective deferrals up to the legal limit.

We outsource the preparation of our 5500 and plan document.

I am unclear about how these three different options will affect my organizations responsibilities. We have in-house resources to keep track of employer vs. employee contributions, but not for record keeping or education beyond that. Are the three options significantly different in terms of organizational responsibility for a plan of our size and configuration?

The employer/sponsor of an FSA plan goes bankrupt in July. Doors close, all employees find other jobs. What happens to the FSA plan? The employer found enough money to set aside to cover any unpaid claims. The question is, don't we have a plan termination? What expenses are eligible for reimbursement? The whole year, are just those incurred prior to the company closing. What about an individual that terminated prior to the closing that elected continuation?

Any thoughts would be appreciated.

Does anyone know if it is permissible to convert existing traditional IRAs to Roths if all are preexisting?

I intend to convert both of my existing traditional accounts (one is traditional deductible and the other is a rollover traditional deductible) by depositing them in my existing Roth account. Up to this point, I thought that they must be kept separate. Now I've read that this is not the case. It will be much easier managing one account rather than doing the conversions of my traditional accounts to new Roths and ending up with three Roth accounts.

Thank you

The Relius recordkeeping software included a participant's full-year comp in the calculation of the Average Benefits Test even though the participant didn't enter the Plan until 7/1. Relius' calculation of this participant's EBAR differs from mine since I had only used comp while a participant (as the Plan docs stipulate) for calculating both the dollar allocation and the EBAR.

Did I err in my calculation of the allocation and EBAR, or do I possibly have a setting incorrect in Relius?

Looking for some calirification. I realize that qualified plan distributions not eligible for rollover are not subject to 20% mandatory Fed withholding. Code section 3405b states that any non-periodic distribution not eligible for rollover (hardships, MRD's, etc.) will have 10% Fed taxes withheld unless payee elects not to. As a plan administrator must we comply with these regs or can we simply state in our distribution paperwork & tax notices that there will be no withholding done on these payments? Thanks.

Participant aquired primary residence loan. Four years later purchased another home and took out another primary residence loan. The first loan is still outstanding and is now a rental property.

Is this compliant? If not, what are the ramifications?

I have a plan that provides allocation for the owners for 13.25% of comp contribution and 4% for all others. The plan also allows 4k but has low participation. The employer would like to put in the maximum 15% contribution. Due to the low 4k participation, the 15% will exceed the formula described above. Is their any guidance for contributions exceeding the base formula? I could not find anything in the document.

I have a U.S. Citizen employee who works for a foreign office of a U.S. LLP (foreign office is actually separate related general partnership). Assuming plan could be amended to permit participation, does Code Section 911 limit the maximum amount which the employee may defer (for example, if employee is expected to make $200,000 in 2002, does exclusion of $80,000 in 2002 under Code Section 911 make the compensation used for purposes of deferrals actually $120,000?)