I'm 25 and a police officer. although I have a retirement plan, I know it will not be enough to support me in the future. so I want to start an roth account but i have no clue about what steps to take.

I currently have 2 loans (as allowed by my 401K plan). Have recently ran into very hard times and have asked for a hardship withdrawl from 401K... Employer has stated that unless I am losing my primary residence or need the $ for secondary education, the federal regulations are set so that I cannot receive a hardship withdrawl. I have looked up other info on the web and it all states that a hardship withdrawl is at the employers discretion. Can anyone confirm/deny this? Though I am not losing my primary home (yet) I am over 60- days past due on many bills including vehicles which are on the verge of being repossessed. Please help ASAP. Thanks

Can anyone provide a cite that says that S-Corp distributions are treated as income in an ESOP?

Or, is it just common sense? (S-Corp distribution is part of the company's earnings being distributed to shareholders, akin to dividends).

Thanks.

I have a participant with an outstanding loan who claims that he cannot afford to continue making his loan repayments, so he is considering leaving the company so that he can payoff the loan and receive his vested account balance in the plan (clearly, he has some serious financial problems).

I want to consider the possibility of voluntary loan defaults. I read a previous thread, regarding this topic, but have some questions that I'm hoping someone can answer.

How does a participant officially rescind his/her payroll deduction agreement? Do you need something officially on file to document this? (I would think yes).

Does the loan continue in default (and accrue interest) until the participant has a distributable event under the terms of the plan? Can plan language be added so that the loan can be a deemed distribution in the year of default? (This is a volume submitter plan with a loan provision, not an individually designed plan, if that's germane).

Does any language need to be added to the plan or loan policy to permit voluntary loan defaults or is this simply something that you cannot deny a participant?

Any help would be greatly, greatly appreciated!!

We have one PS plan that has a two year of service and age 21 for eligibility requirements. Once eligible, of course, 100% vested immediately. Does the 1000 hour rule apply as it typically does for the usual one year/age 21 plans? One employee has her two years in but only worked 973 hours each year and I want to confirm she's still not eligible. Thank you.

Has anyone heard the phrase "true up transfer" ? I think it has something to do with the improper allocation of a profit sharing plan contribution .... too much is allocated to one participant's account & too little is allocated to another participant's account. As a result, funds have to be transferred from one account to another... (just my guess).

Can anyone shed some light on what "true up transer" might mean ?

I have a call in to Corbel, but in the meantime, does anyone know if there is a way to copy election percents from one person to everyone else?? I have a client with about 250 participants and they need to have the same election percents keyed in their secondary allocation set because we are allocating forfeitures back to originating investments and from what Corbel has told me, this is the only way to make it happen.

The copy feature would be extremely helpful to us if there is a way to do it.

When the QDRO states the ex-spouse gets a percentage of the participant's account do we calculate that percent on the whole account balance or just the vested portion?

May an employer allow Health FSA elections to be modified mid plan year if they are required to comply with a new (less generous) plan design through state mandates, after moving to a new location mid-year?

Calendar year plan calculated ADP/ACP tests and made correction of ADP/ACP amounts. Only problem was that they forgot to calculate the losses the plan "earned" during the year.

Should this be treated as an "overpayment" and corrected by contacting the employees to retrieve those funds, if possible?

Thanks.

Is it true that a Plan does not have to comply with the max. permitted disparity of 401(l), but still qualify and pass 411 and 401(a)(4)?

That is a Plan can potentially have a formula of 1% up to cov comp plus 2% above cc and sll potentially qualify?

Is it also true that a company did not have to amend its SS offset Plan for TRA '86, but did so to pass 401(l) and potentially qualify for a safe harbor plan? I mean, why else would a Plan amend its SS offset Plan?

Gary

An employer sold his company as of November 16, 2000 and terminated his owner only money purchase plan that same date. However, for whatever reason, he over-contributed for the last plan year and now has excess contributions in the plan that cannot be carried over since the plan has terminated. Is the excess contribution treated as a reversion and if so is there a way to reduce the reversion penalty from 50% to 20% since he is the only participant in the plan???

Can a employee deduct the cost of personal medical coverage through their sponsored 125 plan.

How would you verify the expense.

Must a 204(h) notice be provided in the event that a Plan was amended for TRA '86 and changed its formula from a SS offset to a formula that met 401(l)? If 204(h) was not provided would the participant be entitled to old formula if greater (even though it was a TRA'86 change)?

Why were SS offset plans amended? Is it because they would not meet 401(l)? Or because they could not meet any safe harbor test? Isn't it true that a SS offset Plan could pass 401(a)(4) and even 401(l) by having a offset that is less than the 401(l) maximum offset?

gary

I am a retired individual who contributed $2,000 (for tax year 2000) to my Roth IRA on 1/18/00 thinking I would work at some point during the year. On 1/31/00, I realized I wasn't going to be able to work due to my wife's health and so I had that contribution reversed on 1/31/00 (distributed back to me as a Return Of Excess Contribution). As it turns out, I was able to find time to get a part time job in 2000, earned some money and now want to make that year 2000 contribution again but the service dept for the trustee on my account says I'm now ineligible to make a year 2000 contribution.

This just doesn't make any sense to me because I had that contribution reversed. As far as my account balance is concerned, I haven't made a year 2000 contribution.

Your advice on these matters would be greatly appreciated.

I have been unemployed so far in 2001. I have a traditional IRA of substantial size as a result of rolling over 401K funds from previous employment. I would like to convert to a Roth in 2001, but I am about to go back to work which will kick me over the MAGI limit. My new employer has agreed to defer most of my income in 2001 to 2002 to allow me to stay under the MAGI limit. Is this approach legal in the eyes of the IRS? I don't want to do anything illegal.

I converted my traditional IRA account to a ROTH account in April 2000. After preparing my 2000 income tax return, due to unexpected capital gains distributions, our AGI was over $100000; thus, we have to recharacterize the conversion back to a traditional IRA before April 16, 2001. Since my balance is now considerably less than in April 2000 because of the losses in the NASDAQ, it would be advantageous to me to convert the traditional account to ROTH now (I think that the NASDAQ will be going up and thus I want to do the conversion now). My main question is: can I do the two conversions on the same day, one after the other? Or do I have to wait 31 days between the two conversions, even though the first one applies to 2000 and the second one applies to 2001? I have not been able to find an answer so far. I would appreciate some help. Thanks. SJC

Not realizing that forfeitures reduce the employer contribution, a client with a Target Benefit Plan contributed $3,000 excess contributions to the plan during the 2000 plan year. Should the excess be allocated or should it just be treated as a prepaid for 2001?? Also, since it was made during the year it must be included on the corporate return, is there a 10% excise tax on the excess contribution??

Can an employer allow reimbursement of expenses through a flexible spending account beyond the plan's grace period for one individual with special circumstances? Can my company, as the TPA, be held liable if the employer authorizes us to pay a claim beyond grace?

I have a Roth IRA Conversion account set up in March 2000 to which I also added a $2000 Roth IRA contribution for the 1999 tax year (also in March). I would like to recharacterize/convert this back to an traditional IRA.

I believe I can recharacterize the 2000 conversion amount but not the 1999 contribution amount. Is this correct? Is it "simply" a matter of finding out the correct amount to recharacterize and the amount to be left in the Roth account? Thanks much to any advice you can give.