In determining compensation for purporses of calculating the 15% maximum deduction limit do you subtract elective deferrals before the 170,000 limit or after. For example Employee A earns $200,000, defers $10,000, for 15% purposes is his comp. factored in at $170,000 or $160,000? I am fairly confident that you apply the limit after subtracting the deferrals, but I need some confirmation (i.e. in my example 200,000-10,000>170,000, thus comp. 170,000).

Are there any significant disadvantages to taking a pre-retirement distribution from your PSP and rolling it over to an IRA? Participant is older than 59 1/2, so no 72(t) penalty issue. Participant will roll out the contribution he receives each year in the PSP going forward to the IRA.

The plan formula reads "1.2% of your average earnings up to your covered compensation plus 1.6% of your average earnings above your covered compensation times your years of credited service." If the benefit is to be frozen as of June 30,2001, what covered compensation amount should be used? Will the amount be the same for every Participant or will it vary depending upon when each Participant reaches age 65? Also, is a frozen accrued benefit calculated as though the Participants terminated their employment, or do other rules apply to this situation?

I wonder what software others use to keep track of their DRIP accts. I set up some of those dividend re-investment accts where you can buy fractions of a share of stock. It went ok until i started transferring them to a broker so i can sell and buy more anytime i want to. The fraction of a share is sold and i received 1099-B statement. I have no idea how to find out the basis, and since it is small amount anyway, i am going to report the entire amount as dividend.

I just wonder how other people do it.

Please help, i am completely lost on this one even though it

is simple. I converted my traditional IRA (actually a direct roll-over acct) in June, 2000 to a Roth IRA, i then

recharacterized everything back to the traditional IRA in Dec, 2000. I then converted it back to Roth IRA in Feb, 2001

The stock fluctuated so much, the amount between conversion

is different even though the whole acct is converted.

I received 2 1099-R forms from the broker, one for traditional IRA acct marked early distribution exception applies, and the other for the ROTH

marked recharacterized IRA contribution.

1. I guess I don't have to worry about the conversion back

to roth IRA part done in 2001 for now, right?

2. I am having difficulty in filling out the form 8606, can someone please let me know how to do it? I guess I need to fill out part 2 and 3, even so, i can't figure out which numbers are necessary. For instance, it asked for basis,

i have no idea since this is a direct roll-over acct from

a mutual funds.

3. What about line 15a and 15b on form 1040??

Any pointers will be greatly appreciated!

Thank you in advance!

a very basic question... what is a traditional IRA and what is a Roth IRA? thanks for the help!

Is there a federal guideline re: deadlines for reimbursements and notification of such or is it an arbitrary decision made by plan administrator?

Can a 412i plan intergrate social security-and how do you do the caculations? I there a program that one can purchase that will do the pro-formas?

Can 412i plans have Paln Loan provisions?

what is the deadline to set up a new roth ira account for the 2000 tax year? My husband has been told that it must have been set up by December 31, 2000, in order to be counted in the 2000 tax year. I recently read an article that stated it must be set up by the taxpayer's normal tax filing deadline (minus extensions), or April 15,2001.

We are using Quantech in a "Daily Valuation" environment. We are struggling with the issue of forfeitures and how to best handle them given Quantechs capabilities (limitations) when it comes to handling forfeitures in a daily environment. We would like to know what other daily Quantech providers are doing. The Quantech suspense account doesn't seem to be the answer because of the issue of not crediting dividends and not including it in automated reconciliation. Some of the things we would like to know are:

Do you leave forfeitures in the terminated participants account intil they are to be used?

Do you leave them in the original investments?

Do you move the non-vested money to a conservative fund (IE money market)? Within the participant's account or a separate mr forfeiture account?

Do you set up a separate participant call Mr. Forfeiture and move the non-vested money. If so, when do you do the move?

Any input would be appreciated.

I'm trying to follow worksheet 2 from the 1999 Pub 571. I'm stuck and need help, if possible. A participant with compensation of 78,000 has a 415© limit of $19,500. He make elective deferals of $9800.00 and receives ER match of $4200.00. It seems to me he has not exceeded 402(g) and does not need to use the special "catch-up" election. He has also not exceeded MEA (computations done separately) and he has not exceeded 415©, total employer contributions are $14,000. If you follow the steps of worksheet 2, however, it looks like the "amount excludable from gross income" is only $13,000. What am I doing wrong?

I don't believe this participant has exceeded any of the limits.

Examples of when it's advantageous to make 3% nonelective safe harbor contribution to a plan other than the 401(k) plan?

Can the penalty exception under the Roth IRA regarding education be applied to education loans?

Man owns two Companies. Has an EE that works at both and is paid from both companies and defers from both pay check. They have a 401(k) document that that covers both companies under control group. They invest at Kemper. The question is, does each company have to have a separate account at kemper? Does this Participant need to keep each ER's amounts sepatrate? Or can they comingle the money for the participant since it is the same plan document? The plan name is XYZ INC 401(K)which covers both co's, even though the part works and recieves checks from both XYZ, INC and ABC, INC.

I have a client who would like to charge a vendor's lost participant search fee to his 401(k) plan. Thus, the plan asset will be used to pay for this fee. I've read the latest PWBA Advisiory Opinion 2001-01A and the DOL's response to Mr. Stoney; however, I'm still uncertain if this is wise for the plan administrator to do. What is your opinion?

What is the maximum a participant can defer from pay. I have a ER that insists 15% to $30K. I am thinking it's 15% to $10,500.00 for plan year end 12/31/2000.

There is no ER money in this plan.

In 98' i coverted my IRA to a Roth IRA . The sum was 11,800.

I paid taxes on the 11,800 over the next three years. I took a 10,000 dispursement in Deecmber of 2000. Do i have to pay taxes again on the 10,000 or do i just pay a 10% penaty for early withdrawl.

Has anyone an opinion on Converting a 412i into a traditional DB Plan-NP

DOL audit of ESOP determined ESOP loan note contained impermissible provisions. Loan note was fixed. DOL letter states that the Secretary of Labor is required to transmit to the IRS information indicating that a PT has occurred.

The 15% excise tax is substantial. Obviously they will be involving an ESOP attorney. What are suggestions - 1) file the 5330 and pay the tax now 2) wait for IRS notice 3) contact IRS to negotiate settlement. The note provided for a call of the entire balance immediately, but in operation, nothing like that happened, it was just a documentation issue of the loan note.

Also, it gets more interesting. This is an S corp, using distributions on allocated shares to service debt. The DOL interestingly enough, did not make any comment in regards to this issue.

Since the loan notes were already bad, is there anything to fix in regards to the use of distributions on allocated shares? Once the loan became nonexempt, don't these issues go out the door? Now that the loans are clean again, they should ensure they are not using impermissible distributions going forward. Do you think there is any correction to make relating to this issue? Isn't it interesting that the DOL, with responsibility for enforcement relating to PTs, made no issue relating to this matter, despite the IRS's interpretation in a PLR that this is a PT?

Any comments or insights appreciated.