DOL has made it clear that demutualization proceeds representing the payment to a plan that is a polcyholder by way of a group annuity contract are plan assets. Please advise how these should be reported on Form 5500?

Prior threads have indicated that such payments are to be regarded as investment gains. Is there agreement and/or disagreement with this approach?

As youngsters, my sister and I had a pair of stuffed animals. They were a set - by that I mean, they hugged each other with slightly exaggerated arms with velcro on the hands. They did this with a number of animal pairs (we had the monkeys as well) - but our prized pair were skunks!

We bought these skunks in Florida during the family trip in the 1970's. We traveled by car - FIVE of us in a 2 door Dodge Colt with no A/C (but this is a whole other story) - and we had pooled our money to buy these.

The ride home was miserable - for everyone in the car but the two of us. The skunks were very active. We did their voices and generally tortured our parents and older brother - six years our senior. The skunks would go everywhere with us - even when we got home and for several months after.

Finally, poor old dad - who I'm sure had been more than patient with the whole thing - broke. On our way to dinner in the car, the two of us - and our skunks - were in the back window waving the skunks at other motorists. Dad chose his moment. He had had enough and this was going to be it. In a loud, booming voice that you knew meant business he said: "NOBODY WANTS TO SEE THAT! PUT THOSE THINGS AWAY!" We did just that. Slumping into the seats and casting only darting glances at each other.

Only moments later, the awkwardness of the moment was broken. The car that had been directly behind us moved into the passing lane, moved up fast and pulled just ahead of us. Much to our delight - and our father's dismay - the back window of their car was alive with stuffed animals waving furiously back at our car in return. The moment was forever broken. We busted out with delightful laughter and our skunks again came alive - though now up into the drivers compartment so we could return the waving of the stuffed animals. It would've been rude not to return the favor - and of course we saw this as affirmation of our own behavior dad had tried to correct. Dad said nothing.

I can still imagine the color draining from dad's face as he was bested by the stuffed animals. Stuffed animals rule!

Forgive me if this issue has been addressed recently. I have only been able to find literature from 1998. Do early withdrawals of contributions still avoid income taxes & 72(t) penalties? With the exception of rollover contributions withdrawn within the 5-year holding period, can contributions be taken out 'whole' at any time, for any reason?

Thanks,

John Fitz

Just wondering if anyone has any input on this issue regarding the flexibility in committing to make a safe harbor contribution (3% nonelective contribution). The plan sponsor has not yet decided on whether or not to make the safe habor contribution for 2002. They would like to provide the initial notice to the participants just in case they decide to go forward (please do not address the timing issue). If they decide to make the contribution next year, they would like the contribution to go to a plan that they are going to adopt in the first few weeks of 2002. Basically, I am wondering whether this is okay. I mean, if you are not committing to make the contribution to the current plan what difference should it make if you don't committ to making a contribution to a plan that hasn't been adopted yet?

Any input would be helpful. Thank you!

I have been searching for the IRS release of the safe harbor language for 402(f) Notice (distribution/rollover notice) that will comply with EGGTRA. The IRS promised it would release the safe harbor/model before the end of 2001. The language for prior years was released in Notice 2000-11. Has anyone seen a new release from the IRS for the safe harbor/model for 402(f) Notice complying with EGGTRA?

I've seen reference to "Premium Only Plans (POP)" and to "Premium Conversion Plans". Do they both refer to the Section 125 "Premium Conversion Only Plan", or they two separate issues?

I am trying to find out if I contribute the max to my SIMPLE IRA can I still contribute the max to my Roth IRA as long as my joint reported income does not exceed the $150,000 limit? Can I even contribute anything to the Roth if I max out my dollars to the SIMPLE? My accountant tells me no to both questions, my investment advisor tells me that I sure can.

I have removed my 2001 Roth funds because of the accountant's advise (at a loss of course) and now don't know what to believe. Any body know for sure the scoop on this stuff?

Thanks

My older brother relayed a story - previously unknown to me - at this years family festivities:

Seems as a young boy (still in the pajamas with the feet) he waited up for Santa Claus. He waited and waited, fighting sleep, until finally mother nature demanded he depart for 30 seconds. Shortly after he departed it seems our father quickly loaded presents around the tree and shouted out a rather believable "Ho-Ho-Ho!"

With this, my brother raced down the stairs (business unfinished) only to find - much to his amazement - that Santa had been there, left presents, eaten the cookies and was gone in the 30 seconds he had to be out of the room. (I would venture a guess that dad - AKA "Santa" was still struggling to swallow the last of the cookies when my brother reached the living room).

Maybe it was the season, maybe it was the spirits, and maybe it was my brother sharing this for the first time ever and mother qualifying it by wondering if the whole experienced hadn't scarred him for life - but we rolled with laughter!

Company A is owned by a brother and four sisters. Bill is married to one of the sisters, and one of trustees for Company A's 401(k) plan. He has no direct ownership in Company A, but is attributed his wife's 20% interest. He is also a trustee of Company B's plan. The companies currently do not constitute a controlled group.

Bill and the other three brothers-in-law have self-directed accounts in the plan. They now want to direct the purchase of shares of Company B, of which Company A owns 50% of. All the brothers-in-law are directors of both companies.

In my opinion, this is clearly a violation of 4975©. Does anyone dissagree?

Up to now I've been contributing $2,000 to my Roth IRA each year, but I gather the maximum is going up. What is the maximum for 2001, and what will be the maximum in 2002?

I'm single and meet all eligibility requirements.

Thanks.

Lyric

Is there any good reason for a MEWA to adopt a trust if all underlying benefits are fully insured and all premiums are employer- and/or employee-paid? I posted the same question on the Health Care Coalition board.

Is there any good reason for a MEWA to adopt a trust if all underlying benefits are fully insured and all premiums are employer- and/or employee-paid?

we want to buy a home in another state for our retirement home and was told it had to be our primary residence we do not own the home were in now it will be our first home why cant we purchase it with a esop loan?

For years beginning after 12-31-01 a taxable loan taken at retirement is now an eligible rollover distribution subject to mandatory 20% withholding if not directly rolled over to an IRA or other qualified plan. What body authorized this new rule? Please cite the authority. Are any plans exempt from this new rule?

Peace,

Joel L. Frank

For years beginning after 12-31-01 a taxable loan taken at retirement is now an eligible rollover distribution subject to mandatory 20% withholding if not directly rolled over to an IRA or other qualified plan. What body authorized this new rule? Please cite the authority. Are any plans exempt from this new rule?

Peace,

Joel L. Frank

We have a Money Purchase Plan, only two participants are the owner and his wife.

We have amended for GUST and EGTRRA. We are now terminating before the end of the year (as we no longer need a paired plan to reach the 25% limit).

Do we need to wait for the determination letter from the IRS regarding the termination before the assets can be distributed, or in this case rolled to IRAs?

Would the 10% penalty apply to distributions for the purchase of a first home? I'm presume the participant would not qualify for hardship withdrawal for the home purchase.

I'd be interested in knowing if any larger companies outside of the auto industry are eliminating or cutting back on 401K matches. Here in Michigan, we hear lots about the autos doing it, but not much more. We cannot find any good trend or market data , your help would be greatly appreciated.

A single employee fills out life ins. beneficiary form naming parents. Later he marries, but never changes the beneficiary to his wife. The form he signed contained the clause:

"If I am married at the time of my death, my spouse will be the sole beneficiary unless spouse signs the waiver below."

Since no new form was filled out, the spouse obviously never signed the waiver. After the employees death, the ins. co. paid the employee's parents, even though they were informed he was married. The other plans (401(k) and pension) were paid 100% to surviving spouse, by the company.

Egelhoff gets mentioned a lot lately, but this doesn't seem to apply. Nothing in the SCOTUS ruling overturned section 1055 of ERISA (joint survivor annuity) so shouldn't this be a no brainer?

Spouse bene of the Decedent's traditional IRA. Can the spouse rollover and convert the decedent's IRA directly to HER Roth IRA without first rolling decedent's IRA into HER traditional IRA?

Custodian says it's OK. Can't find it in Pub. 590. My concern is that if one needed to recharacterize where would it go?

Thanks,

Reg Jones