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.

Does anyone know where I can find a sample IRS data request checklist that a client of a qualified pension plan would receive from an IRS auditor in preparation for a plan audit?

Employer restricts stock ownership only to employees and the ESOP. Prior 1042 transaction was done with the ESOP. When participants are terminating, the employer is purchasing the shares that were in their account back from the ESOP, and using those shares to 1) give stock to management 2) recontribute to the plan.

Issues:

1) 1042 taint is gone when the stock leaves the plan, so recontributed stock is clean as far as 1042 is concerned

2) Because of the stock ownership restrictions, stock is never really distributed from the plan. The purchase of stock is actually a transaction between the ESOP and the employer, not the participant and the employer, so Put Option requirements have no application. Because this is a transaction between the ESOP and the employer (related parties), the stock must be valued as of the date of the purchase.

3) Also a consideration should be the fact that the ESOP trustees are making a fiduciary decision regarding whether it is in the participant's best interest to sell the stock back. I have a hard time justifying the fact that the employer is buying the stock and recontributing it to the plan to get rid of 1042. How can this be supported as a fiduciary decision when the purpose is clearly to benefit 25%+ shareholders?

Comments? Suggestions?

Also, does anyone have the exact cite that requires valuation as of the transaction date for #2 above?

Thanks.

1. What is the deadline for recharacterizing a 2000 ira conversion? I know this has been mentioned many times but I am getting conflicting information on the deadline.

2. Was I supposed to get a 1099R form for converting from a traditional to Roth?

Thanks!

In a safe harbor plan with a 3% employer contribution as the safe harbor contribution, if the employer wants to add an additional integrated profit sharing contribution does the 3% safe harbor contribution count towards the base contribution? That is, if the employer wants to receive a 5.7% excess contribution, does she have to make an additional 5.7% base contribution to the lower paid employees or will the 3% safe harbor contribution count toward the base?

Can someone please help me with this?

http://benefitslink.com/boards/index.php?showtopic=9635

Has anyone gone through the process of applying for a prohibited transaction exemption? Can you give me a ballpark estimate of what a plan sponsor could reasonably expect to pay to go through that process (attorney fees, etc.), and approximately how long it takes until the exemption is either granted or denied?

An employer has MP and PS plans. An employee has a loan in the MP plan that is being deemed. He has no loan in the PS plan and wants to take the max. Does the deemed loan in the MP plan affect the PS loan max calculation?

Can a husband and wife who file jointly, who have an AGI in excess of $160,000, neither of whom are active participants in a retirement plan, contribute to a Roth IRA? If not a Roth, could they contribute to a traditional but deductible IRA? Thanks

One day a father of a very wealthy family took his son on a trip to the country with the firm purpose of showing his son how poor people live. They spent a couple of days and nights on the farm of what would be considered a very poor family.

On their return from their trip, the father asked his son, "How was the trip?"

"It was great, Dad."

"Did you see how poor people live?" the father asked.

"Oh Yeah" said the son.

"So what did you learn from the trip?" asked the father.

The son answered, "I saw that we have one dog and they had four. We have a pool that reaches to the middle of our garden and they have a creek that has no end. We have imported lanterns in our garden and they have the stars at night. Our patio reaches to the front yard and they have the whole horizon. We have a small piece of land to live on and they have fields that go beyond our sight. We have servants who serve us, but they serve others. We buy our food, but they grow theirs. We have walls around our property to protect us, they have friends to protect them."

With this the boy's father was speechless. Then his son added, "Thanks, Dad, for showing me how poor we are."

Too many times we forget what we have and concentrate on what we don't have. What is one's person's worthless object is another's prize possession. It is all based on one's perspective. Makes you wonder what would happen if we all gave thanks for all the bounty we have instead of worrying about wanting more. Take joy and appreciate every single thing you have, especially your friends.

How does Quantech come up with the total number of employees on line 6 of the 5500 Count Report? Specifically what status does any employee have to be? And how does it handle vested and nonvested balances of terminated employees? Does it count people who have been paid out their vested balance and the only remainng balance is a forfeiture amount waiting to be released at a later date?

I am rewriting the Leave of absence policy and am looking for standards regarding the length or service an employee should have to be eligible for a Leave of Absence.

I apologize in advance for not knowing much about this, and am hoping someone can answer my question and point me in the direction of further information.

If a group currently self-funds and also offers a flex spending option to cover co-pays, co-insurance, etc. must the plan hold a new open enrollment for the flex option if they are now offering an increased dental benefit? There will be an open enrollment for the new dental benefit which now covers orthodontia. May eligible employees 1) sign up for flex through an open enrollment and/or 2) increase or decrease the amount withheld? Thanks for any input, I am going to search as much as I can in the meantime.

Can a sponsor of a simple 401(k) plan terminate that plan and establish another plan (e.g. cross tested profit sharing plan), during the same year, or would that violate the exclusive plan requirement, resulting in disqualification of the simple 401(k) plan?

It seems clear that a simple K cannot be established where another plan existed and benefits accrued, but my question is the reverse.