Can I withdraw my original Roth contribution penalty/tax-free? I rolled over a 403b into an Ira which I then converted to a Roth. I have yet to pay my fourth and final income tax installment this Spring. I am not yet 59.5. Any help would be appreciated.

Hi All

We currently administer a small defined benefit plan with two participants (husband and wife). The plan has been in existence for 5 years and has a $10,000 annual minimum benefit.

My understanding is that any participant with the $10,000 minimum must receive the benefit in the form of an annuity.

What happens if the wife (who has the minimum benefit) dies? Is her primary beneficiary (the husband) prevented from electing to receive her benefit as a lump sum?

Thanks

Section 403(B) arrangement subject to ERISA intends to "terminate." Plan maintains a group annuity and includes employer matching contributions as well as deferrals.

Is a "distributable event" other than "termination" of the arrangement necessary for each participant to roll out of the group annuity and into an individual annuity or custodial account?

If so, is the employer obligated to continue filing Form 5500 Return/Reports until the last participant in the arrangement experiences a "distributable event" and moves his or her money to an individual annuity?

OR can each participant make a trustee to trustee transfer out of the group annuity, to an individual annuity, irrespective of plan termination or any distributable event? (Hence allowing employer to cease reporting duties much sooner.)

If a Divorce Decree orders that a participant's balance in his Defined-Benefit Pension Plan be held as security for his child suppport obligation, upon a qualifying event can the participant withdraw the balance of the account?

My diivorce decree ordered that my ex-husband's balance in his retirement plan be held as security for his child support obligation for as long as there was a child support order (our son is now 11 years old). He was laid off of work in November of 2000 and under the requriements of the Plan, on December 1, 2001 he became eligible to withdraw his funds from his account balance. When I reminded the Plan Administrator of the provision in my Divorce Decree, he said he would check on it and get back to me about it. When he did back to me, he said the entire account balance had been paid out to my ex-husband.

What are my recourses?

Okay, we have our clients primed to take advantage of the new limits (for 2002) under EGTRRA.

Hmmm, what do we do about those who reside in non-conforming states such as Massachusetts, Hawaii or California?

I was talking to a colleague regarding a situation that he is experiencing on the 401k - side of a transaction.  The IRA rollover - side has me wondering if my train of thought is on the right track.  Can anyone refute or substantiate a client's ability to request a recharacterization in this type of situation:

Client Daisy Dasher had participated in her ER's 401k plan and exceeded her calendar year deferral of $10,500 in the Plan Year End (PYE) 2000.  She separated from service in 2001 and elected to rollover her vested account balance to a rollover IRA. Ms. Dasher is not an HCE.

November of 2001, the Year End testing for the 2000 PYE is complete and reveals the excess contribution by Ms. Dasher. 

There are several issues to be taken into consideration:  tax reporting requirement (401k admin or IRA Trustee), accounting for correction within the 401k Trust, Rollover of assets that are not qualified to transfer to an IRA, and other individual tax issues to Ms. Dasher.

Please check my thought process in one possible solution that I devised based on my understanding of both IRA and Qualified Plan regulations:

1)  No Funds Need Be Distributed, Returned - IRA deposit does not need to be voided

2)  401k administrator should void out rollover distribution.  correct systems to reflect a correction/distribution of excess deferrals to participant from the Plan Trust.  re-enter request for rollover distribution for the X dollar amount qualified for rollover and enter the Y remainder as a taxable distribution to the participant.

3)  As long as EE had earned income in 2001 (or) assuming that she will earn wages in 2002:  Ms. Dasher may request the IRA Trustee to Recharacterize the assets received in the rollover.  X dollar amount indicated as a rollover contribution and Y dollar amount recharachterized as either a 2001 or 2002 Traditional IRA Contribution (depending on whether max. 2001 contrib. has been made).  Pre-2002, this account would no longer qualify as a conduit IRA - but post 2002 will be of no mind.

4)  Prior administrator fulfils their duty to correct/report appropriate disposition as to avoid disqualification.  Ms. Dasher and IRA Trustee avoid accelerated taxable

status of IRA assets.

5)  401k ER has excise tax issues to be addressed with Plan Admin.

6)  Ms. Dasher has tax filing issues to be addressed with her qualified tax advisor or accountant.

Is this too simplistic to be make into reality?  Is there an issue with the one check that was sent from the 401k Admin. to the IRA Trustee?  Any other issues that I have forgotten to take into consideration?  What if the distribution had actually occurred in 2000 instead of 2001 and a 1099 Form has been issued?

This is not a real situation for me, but I just have not been able to stop running different "fix-it" scenarios in my mind. I really need to find more interesting things in my life to keep me busy! Please help me sleep again at night!

Can qualified retirement plans require that participants submit to arbitration under the finalized claims procedures regulations issued by the Department of Labor?

In the case of an employee losing benefit eligibility mid plan year and then regaining eligibility later in the plan year, can we offer the employee the ability to make completely new elections at the time when they re-gain benefit eligibility - in particular for health and/or dependent care flexible spending/reimbursement accounts. This scenario assumes the employee choosing to continue participation under COBRA while ineligible (or does COBRA participation affect possible re-election?)

Thanks ...

Do 403(B) plans need a formal plan advisory committee and investment policy statement. What is the risk for not having a special plan committee or investment policy statement when we have chosen a bundled custodial fund service provider?

Who should be a member of a committee - is it acceptable for all 403(B) plan decisions to be made soley by a sub-committee from the Board of Directors - in the absence of a formal investment policy?

A DB Plan has a tricky benefits overpayment problem:

A Participant died and the Plan made pension payments to his surviving spouse for many months. However, the company recently discovered the payments were in error because the Participant had elected a Single Life Annuity to which the spouse had consented.

Here's the twist: The spouse who received the overpayment is also a former company employee and is receiving a pension. However, the spouse is a participant in a different pension plan than her husband.

Issue: Can we offset the overpayment amount from the Participant's plan against the amount the spouse is receiving from the other plan??? (I know it would be permissible if they were in the same plan, but is it permissible when there are two different plans at issue?)

What are the rules regarding COBRA if the employer shuts the company down? Will employees currently on COBRA and employees laid off have continuation of coverage or does it go away?

The employer has decided to amend the plan to eliminate the match. What are the options for the forfeiture account? More specifically, can the plan use the forfeiture account to offset the employee contibutions? Is that the same as the money reverting back to the company? Is that legal?

Does anyone know of a good interned source with samples of service agreements or advice on how to prepare one?

Thanks.

I understand the issue where age 50+ participants that are contributing at the maximum deferral % allowed under the plan are allowed to make catch-up contributions over this amount. Say you have a situation where the plan administrator is holding HCEs to a 4% cap due to testing problems as allowed under the plan (but this specific limit is not stated). It seems that these HCEs will not be able to make catch-up contributions since they are not at the prescribed limits. Other opinions? Thanks

I know that you cannot use pre-tax dollars in a cafeteria plan to purchase other insurance that is offerred by a spouses employer. However, can you use pre-tax dollars to purchase an individual insurance policy.

I have a client whose plan has had a severe top heavy problem for a number of years. The client would like to correct, but the cost will be prohibitive - it might force the client out of business. Is there a way to work something out with the IRS? The client wants to correct this, but it can't do it immediately.

i HAVE A LARGE ROTH IRA WHICH IS BROADLY INVESTED IN COMMON STOCKS, PREFERREDS AND BONDS. THE ACCOUNT IS HELD AT A SMALL DISCOUNT BROKERAGE FIRM WITH WHICH I HAVE A LONG TERM RELATIONSHIP.

I HAVE BEEN A PROFESSIONAL STOCK TRADER FOR VARIOUS BROKERAGE FIRMS FOR OVER 30 YEARS. AT THIS POINT, I AM THINKING ABOUT STARTING MY OWN MARKET-MAKING OPERATION WITH THE HELP OF MY TWO PARTNERS. EACH OF US WILL PUT UP $500,000.00 FOR A TOTAL OF $1,500,000.OO. I'M NOT WORRIED ABOUT INVESTING $500,000 OF MY OWN MONEY. WE DEAL IN VERY PROPRIETARY PRODUCTS AND ALMOST ALWAYS MAKE MONEY ON A MONTHLY BASIS.

MY QUESTION IS THIS, CAN I TAKE SAY $250,000 FROM MY ROTH AND ANOTHER $250000 FROM MY BANK TO MAKE MY CONTRIBUTION OF CAPITAL. CAN A ROTH IRA MAKE A NON-TRADITIONAL INVESTMENT SUCH AS THIS ONE? hOW DO I CONFIRM THAT THIS WOULD NOT VIOLATE THE SPIRIT OR THE RULES OF ROTH IRAS???

THANK YOU FOR YOUR VIEWS AND INFORMATION

Several interesting articles in the media today, re the Massachusetts Secretary of State's interest in prohibiting employers from locking employees into company stock in a 401(k) plan ...

http://www.boston.com/dailyglobe2/339/busi...k_policy+.shtml

http://news1.iwon.com/article/id/191722|po...28|reuters.html

Does anybody think such a law would have more than a snowball (in hell)'s chance of avoiding ERISA preemption?

I work for a small non-profit 501© 3 organiztion that has a 403(B) plan. I have talked to several people in small non-profit organizations that have SEP plans. Is this something that is possible for us or even recommended? Since contributions are not availble through payroll deductions in a SEP plan, what are the options for a payroll reduction plan as well as an employer contribution.

I hope someone can answer this for me.

What is the law regarding the calculation of the present value of an accrued benefit that is limited by 415(B)?

What interest rate do you use, and what mortality table?