Just wondering what practitioners are doing with respect to the following for a participant who retires, elects a lump sum but is restricted:

(1) Reg. 1.401(a)(4)-5 sets the life annuity equivalent of the accrued as the max that the restricted participant can receive in a year - are practitioners communicating a payment schedule with the above max as an annual cap or is the communication just that "the restricted participant can receive payments under any schedule as long as the max isn't exceeded in a year"; if a schedule is communicated, how is it determined ?

and

(2) The participant who elects a lump sum & is restricted might not be restricted a year later(e.g the RPA rate changes and/or assets perform well); how are practitioners determining the lump sum value a year later after the participant has received payments but of course not exceeding the max allowed as noted above ?

I rolled a 401K (approximately $25,000) into a traditional IRA a few years back. I then converted the traditional IRA into a Roth IRA in 1998 (spreading the taxes over four years). My financial advisor says that I cannot contribute to this "conversion Roth IRA" because it originated from a 401K. Is she correct?

Thanks for your help!

Two minor children are the beneficiaries of their mother's IRA. Their mother disappeared suspiciously and her sister petitioned the court to be Guardian of her Property. The children live with their father (who has full custody). The police have designated the case as a suspected homicide and the father has petitioned the court to declare the mother deceased (all parties reside in Maryland and there is no waiting period to declare a missing person dead, that is done by the courts). The sister, acting as Guardian of the Property, petitioned the court to pay the proceeds from the mother's IRA into Uniform Gift to Minor Accounts with the sister acting as custodian, in the event that the mother is declared dead. The mother has now been declared dead. She left no will and her debts exceed her assets.

Do the proceeds of the IRA go directly to the children, or do they go to the estate to pay off creditors? And what are the tax implications (the mother was 47 at time of death)?

Can an employer who already filed their tax return for 2000 make a contribution to their P/S plan for 2000 and amend their tax return without any penalties?

Are Forms 5558 still filed with the "appropriate" IRS office (i.e., Holtsville, NY Atlanta, GA or Memphis, TN) versus the DoL?

Thanks!

Does anyone know of a good program that generates actuarial conversion factors and annuity factors?

The adoption agreement currently reads as a qualified match. The plan has been operated and tested as a qualified match rather than a regular match.

However the company never wanted the match to be 100% vested. They always wanted to follow the vesting schedule. In the past some participants were paid out 100%. However now the company does not wish to pay out somebody 100%.

I guess we could amend the document going forward but can not convert the QMAC into regular match since some people benefited already the full 100% when they were paid out.

What are your thoughts on this issue?

How do you correct this problem as well as the document?

Thank you.

Any comments on safe harbor and plan mergers -

Company A (calendar year/plan year) maintains a safe harbor plan utilizing the matching method.

Company B (calendar year/plan year) only allows elective deferrals; no employer contributions.

They are a controlled group, plans tested separately, all different employees, and now want to merge the plans during 2001; 6-1-01 for example. Would you:

1. Amend Company B's plan to create a short plan year from 1-1 to 5-31 and do an ADP through that period. Then merge the plans effective 6-1-01 and start the safe harbor match for the Company B's employees as of that date (given proper Notice). They wouldn't have been eligible to participate under the Company A plan prior to 6-1-01, so doesn't seem like they would be entitled to the safe harbor match retro to 1-1-01 under Company A's plan for a time when they weren't eligible to participate.

2. Would merging Company B into Company A mean that the Company A plan will now have to give Company B participants the safe harbor match retro to 1-1-01?

I am retired at age 69 1/2 and due to severe losses in my stock portfolio last year, I will have no income tax due this April. In fact, I will have a substantial loss carry forward into 2001.

I felt that this would be a good time to convert my IRA into a Roth IRA as well as moving my qualified TIAA-CREF funds to the Roth vehicle.

My TIAA-CREF plan allows me to make supplemental after-tax contributions. My question is this: would the supplemental cash also be eligible for transfer to the Roth without incurring another tax liability? Seems too good to be true.

I have a client converting to Automatic Enrollment...the entire eligible population, not just new hires. Has anyone done this before and how much time was allowed for "opt out" before the effective date of the new AE feature. 45 days?

Does anyone know what needs to be provided to participant's requesting plan loans, in order to satisfy Regulation Z disclosure (Federal Trust and Lending)? A template of the wording would be greatly appreciated.

Thank you for any help you can provide.

Company A is a thinly publicly traded company. Frank is the president and a board member. Company A has a 401(k) plan that permits participant segregated, directed accounts. Frank currently owns 14% of Company A's outstanding stock in his directed account. He individually and through family members and trusts owns 45% of the outstanding stock.

Two large shareholders want to sell their shares. Company A is not able to redeem them for cash reasons, so Frank wants to purchase the shares in his directed account. Following the transaction, his directed account would own 20% of Company A. Finally, Company A may redeem the shares from Frank's account in the future.

Based on my reading of 4975, Frank probably has engaged in a prohibited transaction already and the purchase of more shares will compound it, particularly in light of the the recent Flahertys Arden Bowl case. Certainly, Company A's redemption of shares from Frank's account would contitute a PT.

Am I missing something? I'm being told that the plan's corporate trustee has no problem with these transactions. Anybody can help? Thanks.

Assuming state law allows, can a government defined benefit plan disregard all service for vesting if a participant leaves before becoming vested (i.e. reaching retirement age) and is gone for just 6 months?

How much can a person contribute into the new Roth 401(k) in 2001 if the bill (H.R. 10) is passed by Congress?

Will the contribution be tax deductible?

What are the advantages and disadvantages of the new Roth 401(k) compared to the Roth IRA and the 401(k)?

Thanks. JMD.

Spidell Publishing, the authority on California tax law, states in their materials that when someone moves into California, their basis in the IRA for state purposes is the balance on the date they entered. So withdrawals from a Roth IRA the next day would not be taxable for state purposes. The Spidell materials do not reference any statute or regulation. Does anyone have a cite on this?

I have a client using an Aetna Standardized Prototype. I am trying to determine the date non-vested match contributions from terminated participants become available for reallocation.

I have read through the document and the adoption agreement, and cannot find a definitive answer as to when these funds become available for reallocation. I find information on what to do with the funds once they are available, but no guidance on when they become available.

Any thoughts? Thanks!

An IRA owner will be purchasing a farm in their IRA. The farm will be rented for cash rent only. What circumstances would be necessary to make it permissible for the IRA owner's son to rent the farm from the IRA?

Would appointing an independent discretionary trustee for the IRA make this transaction permissible? Does having an independent trustee choose the son in an arms length transaction remove the PT issues? Any other possibilities?

Thanks.

Dawn

If the employer's corporate charter or bylaws restrict the ownership of substantially all outstanding employer securities to employees or the ESOP, can the corporation purchase the securities which are allocated to the terminated participant?

If stock is distributed, and a put option is exercised, can the participant roll over to an IRA the cash that the employer pays to purchase the securities?

Cobra Conversion Policies.

I have been under the cobra insurance plan through my ex-

husbands employer. In about 3 months this program will be running out. I have requested information on the conversion policy but no one seems to no anything about this. I was told of this conversion from a local bcbs rep.

Can you please help.

Under California law, since when has it been permissible to separate "core benefits" such as medical benefits from dental benefits and allow the applicant to elect only dental coverage without electing medical coverage as well on COBRA? Is the rule set with regard to consistancy on how the package is offered upon eligibility? For example, if we allow employees to elect only dental or only medical upon eligibilty, then they will also have the option to separate out these options on COBRA as well? Obviously they have to be a participant in that plan to begin with.

Thanks!