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?

I've read several messages regarding the amendment of 403(B)/457(B) plans to comply with EGTRRA/GUST and such plans' application of the new proposed 401(a)(9) regs. Just for the sake of year-end "feel good" closure (and additional comfort as to several governmental 403(B)/457(B) plans that have just landed on my desk with insufficient time for boards to adopt amendments before 2002), I'd appreciate any comments/observations on the following:

1. Although there is no remedial amendment period for EGTRRA/GUST changes, will my late clients still be okay if their boards adopt GUST/EGTRRA provisions during 2002? I see that Tom Geer, on 10/8/01 raised the issue of IRS arguing that a plan has not been administered in accordance with its terms if EGTRRA/GUST provisions are not added by amendment before they are applied. Do any other issues come to mind?

2. I've seen conflicting commentary on whether non-qualified plans (403(B)'s, 457(B)'s, etc.) must affirmatively adopt (before 2002) the IRS model amendment for the new proposed 401(a)(9) regs when those regs have been applied for 2001. Tom Geer's observation (see above) seems relevant. Are there any other problems with waiting until 2002 to amend to specify that the new proposed regs were applied during 2001 (and/or will be applied for 2002 and later years)?

Thanks.

I can't find this answer. We want to put in a brand new Safe Harbor 401(k) Plan (no prior plans) with non-elective contributions for a calendar year plan. It's past December 1, 2001. Will the notice requirement scotch the deal?

An employer changed their plan's eligibility from 1 year to 6 months. She is now faced with having to allow part time employees who are not eligible for any other benefits enter the plan. Is there a way around this? Can she change her eligibility back to 1 year for all employees hired after 1/1/02 without violating any protected rights?

IRC 530 (B)(1)(A)(ii), states

(A) No contribution will be accepted -

(ii) after the date on which such beneficiary attains age 18.

This seems to suggest that contributions should not be accepted AFTER the day on which the individual attains the age of 18.

IRS Form 5305-EA as well and IRA publication 570 states that “You may be able to contribute up to $500 cash each year to an education IRA for a child UNDER age 18.”

This seems to say the contribution must be made BEFORE the 18th birthday.

Would you agree there is a conflict?

I know it is just one day’s difference, but…

A new not for profit org. was established in july 2001. it was created from combining 2 other organizations which had 403b plans. The new not for profit is setting up a 401k planasap. It has been found that payroll from the new company has been continuing to pay 403 deferrals into the accounts of employees who were former employees of one of the old groups that are now in the payroll in the new company. (in summation, they mixed oil & water)... Can these deferrals be returned/refunded as a mistake of fact and run through payroll correctly for 2001 in the new not for profit? any comments/help is appreciated. fortunately our company is only working on the new plan, not the termination/dissolution of the old plans.

Has the IRS issued the year 2002 compensation limit (401(a)(17)) for pre-96 grandfathered participants? Thanks is advance for any responses.

Under the 410(B) transition rules, if a new member of a controlled group joins the controlled group Jan 1, 2002 and the plan is a calendar year plan, is there effectively a 2 year transition period? Can you take the position that the first day of the plan year after the company joined the controlled group is January 1, 2003? Or does that read the rule too agressively?

If forfeitures are reallocated in a Profit Sharing Plan, can a portion be used to pay administrative expenses (assuming the document allows this as an option)?

If an independent contractor has only one employee (himself), can they have a Simple IRA plan? If so (I believe it can be done but a Federal tax ID is needed), what unique items are needed and how is the employer contribution handled? Are there any special tax implications on the individual's 1040 or special federal reporting requirements?

Does anyone see any potential problems with the following scheme. In theory it allows multiple 415© contributions to multiple profit sharing plans:

1. Investment advisor (herein "IA") manages money for 5 separate non-affiliated clients.

2. IA can get an advisory fee from each client (as a sole proprietor) or become an employee of a given client (and thus draw a salary as a fee).

3. He decides to do the following:

a. Sole proprietor to client 1

b. Employee under clients 2-5.

4. Thus IA is a sole proprietor and an employee to 4 different employers (IA gets a different W-2 from each employer)

5. Each of the 4 employers sets up a profit sharing plan for only the IA. The IA is an HCE and each employer is an HCE. The employee and employer are the only employees of the company.

6. IA contributes up to 415© for each profit sharing plan.

So assuming the IA gets $160K salary from each employer he can contribute $160K in total ($40K x 4) on an annualized basis plus any sole proprietor contributions.

From the employer's perspective it has the added benefit of allowing the IA's fee to now be deductible (ee'r downside is now responsible for FICA etc.)

Does anyone see a problem with this scheme from either the IA's or the employer's perspective?

I have a few clients who have SIMPLE (k)'s, and I'm looking for a vendor who can help me restate them - either by using a volume submitter or prototype. Any ideas? Thank you!

The new limits will eliminate a large portion of my client's exisiting Non-Qualified payments; the client recoups the FICA taxes from the Non-Qualified benefit after submitting it to the IRS. THe dilemna is that as of 1-1-02, a percentage of the population will cease to have a Non-qualified benefit and there will be funds left to recoup from the employee. The dilemna is: Can we still apply the old limits to the 1-2-02 check becuase it reflects a December payment, or does the fact it is being paid after 12-31-01 bring it under the new regs?

Is an employer required to allow employees to continue to contribute to a medical FSA after they have been furloughed/terminated? How does this work?

Currently we are allowing employees to continue their contributions to a medical FSA to the end of the benefit year

We are sponsoring a document for the first time. Essentially we are putting our name on a document of a major provider. Although the provider applied for IRS approval prior to 12/31/00, we did not apply until last month. The provider tells me we can still use the Certification specified in Rev. Proc. 2000-20 becuase they applied prior to 12/31/00. The provider says it is irrelevant when we applied for IRS approval.

Is this correct?

If a safe habor plan (match method) offers catch-up contributions is it required to match those catch-up contributions to stay within the safe habor of 401(k)(12)?

A "super-integrated" plan allocation currently integrates at $70,000 and has a " last day" requirement.For the 12/31/01 allocation the plan sponsor wants to increase the integration level to $85,000 and eliminate the last day requirement.I don't think I have a 411(d)(6) issue with the prior allocation basis. Anyone agree/disagree?