Cafeteria plan participant wants to add spouse to coverage under group medical mid-year, due to increase in cost of spouse's coverage under her employer's group health plan.

Cafeteria plan does not have open enrollment for medical plan (self-insured plan). Adding spouse to coverage is not a problem, however can the employee change his pre-tax premium payment, mid year, to include the spousal premium?

What do we call Safe harbor disaggregated portion of the plan for item 4e of Schedule T. This plan also has a profit sharing contribution therefore I already have a disaggregated portion called "nonelective".

I have an IRA/SAR SEP which I have had for 6 years. Is it possible to move some of the account funds into a Roth IRA? Can I change my weekly payroll deductions to go directly to a Roth?

Thanks Jerry L

I notice the article today that says that severance pay cannot be used for 401(k) contributions because only active employees can participate. What if the layoff involves so many employees that it triggers WARN Act pay and the employees are entitled to 60 days of pay and benefits. How do you give them the 60 days of 401(k) when you cannot use severence pay and the employees are gone?

EGTRRA 641© expands this to include 403(B) and 457. My question is, who is the "administrator" under a typical 403(B) salary deferral arrangement? In other words, who will be responsible for this - the employer, or the insurance company, mutual fund, etc.? Thanks.

Is it allowable for a Minimum Required Distribution from an IRA to be made "in-kind"? For example, instead of taking a $10,000 MRD in cash, could an IRA holder take 500 shares of ABC corp stock with a fair market value at the time of distribution of $20? The transaction of course is treated as $10,000 of taxable income. Does the $20 fair market value then become the basis of the stock for the account holder?

I don't see why this can't happen, but would appreciate any comments and cites, if they are available. Thanks.

As part of our divorce settlement, my ex-husband is entitled to 1/3 of my 401k. I was told we needed to fill out a form (quadro?) Neither of us has an attorney. Any info on how to actualize this transaction would be greatly appreciated.

It seems to me that since we will not get taxed on money that is already in a Roth IRA, that it would make since to put the Roth money in a mutual fund that is really aggressive, like a Tech fund with high turnover percentages. Of couse this now seems like a null idea due to the drop in the Tech market. But overall, Gains, dividends, and turnover doesn't matter in a Roth . . . Right?

Of course one should always stay diversified.

I welcome any thoughts on this subject.

Zane

What are the consequences of an plan administrator (employer) authorizing plan distributions earlier than allowed in the plan document? The timing per the adoption agreement is within a reasonable time period after the plan year in which termination of employment occurs. The employer is paying out benefits to participants who terminated in 2001. This is a money purchase plan with a 1000 hour/ last day requirement to receive a contribution so these people will not be receiving any additional contrbutions into the plan.

I have always been a stickler at following the plan document when it comes to the timing of distributions, but it seems like plan sponsors i am currently working with as well as other professionals in the business have become very "flexible" in paying participant out.

Anyone have any insight?

An employee was allowed to defer in 2000, but employer discovered later that she was not eligible. I understand that correction of this insignificant operational defect should be distribution of the deferral, plus applicable earnings. What about losses? The deferral amount was only $276, so if losses are taken into account, the amount to be distributed won't be much. Also, does the employer issue a 1099-R for 2001, or is the $ taxable in 2000, and, if so, how reported?

I'm sure this has been covered before, but my search isn't turning up anything on point. Thanks for any help.

GBurns posted messages regarding a "boot Leg" version and a real version of HI Plan. He did not specify who was who or if he had evaluated what they call "Due Dilligence".

Any info before we proceed.

Thank-you

Ross

I have a client that inadvertently excluded some small bonus amounts and tuition reimbursements from compensation eligible for deferrals (and matches). The plan document requires that these items be included in compensation eligible for deferral. I know that the IRS indicates informally that they want an employer in this situation to pony up the deferrals (even though the employee actually received the cash) and the matches. My question is -- What are the practitioners actually seeing in audits and VCP (formerly walk-in CAPs)? Is the IRS really requiring this, or are they backing off on this and allowing just the matches to be contributed by the employer? Are you seeing any de minimis threshold applied? Any information would be helpful. Thanks.

An S Corp has a SIMPLE IRA. The owner of the S Corp wants to set-up a second company as either a C Corp or an LLC and wants to adopt a 401(k) plan. The only employee of the new company will be the owner who will also be an employee of the S Corp. Would any restrictions be placed on the SIMPLE IRA or 401(k) plan because of related party issues? Would the owner be able to defer the maximum under each plan? Would the SIMPLE IRA and 401(k) be subject to a combined limit of the $35,000?

I have two stocks in my Roth IRA.

- 490 shares of Webvan that cost $3046 and are now worthless

- 30 shares of Qwest Communications that cost $1405 and are now worth $668.

My marginal federal tax rate is 28%.

Is there any way I can deduct the capital loss in Webvan?

Hola,

I have a client who is a sole proprietor of one business and a member of a LLC for another business. The client uses a SEP for the sole proprietorship and maxes contributions each year (about $8k.)

Can the LLC make contributions to a SIMPLE plan for the client?

Thank you.

I am age 52. I was 100% vested in my pension plan in 1982. In 1995, the plan was changed: 1) The benefit payable upon early retirement was reduced. As of the date of my vesting in 1982, the benefit payable at age 55 was 79% of the full benefit. In 1995, the plan was changed so that the benefit payable at age 55 is 56% of the full benefit at age 65.

2) A new class of employees, called Vested Former Employees, was added. Under this provision, the benefit payable at age 55 is 38% of the full benefit at age 65. I became a Vested Former Employee in 1993 when the subsidiary I worked for was sold. Because of the changes in the plan, my vested benefit at age 55 was reduced from 79% to 38% of the full benefit at age 65. Can someone advise if these changes are permitted under ERISA?

one section of egtrra, which still seems

vague and in need of guidance, is the section

allowing "reductions in retirement subsidys",

if they are "complex for a plan and participants,

and the cutbacks do NOT IMPACT ANY PARTICIPANT

MORE THAN de minimis"

observations:

-complex for plan and particpants is vague

is deminimis 1 % 2%, or other ????

-this section (not withstanding conf report example), could be used by fiat of plan amendment, eg.,NOT JUST IN PLAN MERGER scenarios

-Treasury is ordered to issue final regs(by 2003)-

How can treasury "quantify what is deminimis or

not?" What might be de minimis to a highly

compensated employee could be hugh impact

to a lower paid employee ? LAW STATES NO

MORE THAN DEMINIMIS IMPACT TO ANY particpant

-Does the above allow retirement subsidy cutbacks,

retroactively ?

-Could a DB plan use this new 411(d) language,

to summarily reduce payouts to retirees (*already

in pay status) prior to egtrra enactment?

-Does this 411(d) deminimis cutback, have any affect on current law and regs governing

plan terminations ??

any observations on the above would be appreciated:

I've read about the issues involved in rolling my traditional IRA (TIRA) into my Roth IRA (RIRA), but I'm still unclear about the taxes, if any, that I'll owe upon conversion. I've already paid taxes on $8000 in my TIRA. Also, in June 1999 I rolled over my 401k balance of $57,200, on which I had paid no taxes, into my TIRA. At this time, my TIRA looks like this:

TIRA Portfolio Value Report as of 8-25-01

Security Cost Basis Gain/Loss Balance

Cisco Systems 21,589.81 -12,464.81 9,125.00

EMC 19,669.50 -16,229.50 3,440.00

Kopin Corporation 18,017.25 -11,142.25 6,875.00

MCData Corp. 0.00 125.13 125.13

Nortel Networks 9,683.88 -8,800.13 883.75

Oracle 5,549.62 3,564.38 9,114.00

Sun Microsystems 47,587.81 -27,677.71 19,910.10

-Cash- 376.44 0.00 376.44

TOTAL Investments 122,474.31 -72,624.89 49,849.42

Thus I have a lot of capital losses in the TIRA. We're under the $100,000 AGI conversion threshold, so if I roll my TIRA into my RIRA, what will my tax liability be?

Thanks very much for the help.

Have the $160k maximum been changed?

Code Secs. 72(t)(9) and 402©(10) [added by EGTRRA] will require a gov't 457 plan to separately account for any amounts rolled into it from a qualified plan, 403(B) or IRA in order to be able to identify those amounts subject to the 10% tax on early withdrawals. From what I can tell, there is not a comparable Code provision requiring the tracking of 457 dollars that are rolled to a qualified plan, etc. If not, then it seems as if those amounts would become subject to the 10% early withdrawal tax. Am I missing something here?