WHEN CONVERTING TO A ROTH FROM A ROLLOVER IRA ,DO I NEED TO CONVERT THE TOTAL ACCOUNT OR CAN I JUST CONVERT A PORTION OF THE ACCOUNT?

Assume a lump sum distribution amount is calculated for a DB distribution as of a certain date. There is a delay of two months before actually writing the check to pay the former participant. The participant claims she is owed two months worth of interest earnings on the lump sum value as of the valuation date. Can anyone tell me what statutes or regulations govern the requirement to add earning to a delayed distribution? Any court cases out there on this topic?

My understanding is that shareholders of a sub S corporation essentially cannot establish a nonqualified deferred compensation plan for just themselves due to the pass-through taxation rules that apply to sub S corporations (i.e., that the shareholders would be currently taxed on the deferred amounts anyway). Can anyone confirm that this is the case?

A plan files a 5500, is publicly traded and is in or associated with the railroad industry or may be a railroad plan. Is this plan subject to 411 minimum accrual rules?

Can a selling shareholder's Sec. 1042 treatment be jeopardized by any actions of the ESOP or the sponsoring employee?

Has anyone struggled with the taxation of employee contributions distributed from a db plan before the participant's annuity starting date?

IRS Notice 87-13, Q&A 11, provides that, in the case of a db plan, you calculate the present value of the participant's accrued benefit using the plan's factors if the plan provides for a "total distribution". Otherwise, you use the factors set forth in Reg Section 20.2031-7.

What does "total distribution" mean? An actuary friend of mine interprets this to mean that the plan provides a lump sum distribution option for the P's entire benefit. What about a lump sum distribution option for a cash out or plan termination? In othere words, could the plan specify that the factors to use under Notice 87-13 are the same as for cash-outs or plan terminations?

I'm going to be wrong somehow on this - as I'm only aruging with myself on this point.

It was generally held around here that a qualified plan was one that:

- was tax deductible

- was eligible to be transferred to another qualified plan

- was eligible to be rolled over into an IRA

A 457 can only be moved from one 457-plan to another. It can never be rolled into an IRA (though there were two recent attempts to change that which were vetoed by President Clinton) and it's contributions, while tax deferred, are not tax deductible.

So when we say that a Deferred Comp Plan is "Qualified"......help me out here...someone...

I have a plan that grants 1 year of vesting credit if worked 910 hrs and 1 year of credited service if worked 1820 hrs. Partial credit for credited service is granted if worked less than 1820 hrs and is determined as hrs/1820.(If worked less than 910 hrs in the plan year, then no partial credit for benefit accrual is granted for that full year. On the other hand, partial credit is given in the 1st yr and last yr of employment if not a full plan year)

Question: Is it okay to grant partial vesting credit in 1st yr or yr of termination based on hrs /1820? or should the calculation be based on hrs/910? I'm thinking that either approach is acceptable since it is more generous than statute. Any comments?

Can anyone recommend a recordkeeper for a Puerto Rico based 401(k) type plan with approximately $2.0 million in assets?

A 401(k) Savings Plan has a non-leveraged ESOP portion which is made up of an old PAYSOP. If the dividends were distributed to participants under that portion of the plan on an annual basis, would eliminating dividend payments (and instead reinvesting the paymens) raise any 411(d)(6) issues? How does this square with the 411(d)(6) rules on stock distributions?

I've had two instances (of two I've reviewed) where the Quantech pre-SBJPA refunds are too much. In other words, where the ADP and/or ACP tests would be satisified by bringing the HCEs to 5.00%, Quantech has brought them down to 4.97% or some other amount less than 5%.

Has anyone else had this problem? And informed Quantech and gotten a response?

I do not think this is due to rounding. We're using 6.0.

I sent the info the Corbel yesterday, but haven't gotten an answer.

Thanks.

I have a new client who is a sole proprietor. However, a portion of his Schedule C income is derived from compensation from an insurance company. He is covered under the insurance company's profit sharing plan and has received a contribution as a statutory employee.

The prior TPA has used total Schedule C income in determining the 404 maximum deductible contribution for the client's own profit sharing plan, and then subtracted out the contribution made to the insurance company's plan.

It seems to me that the correct way to handle this would be to eliminate all income from the insurance company from the calculation. However, I can't find any specific authority for this. Any thoughts?

I am looking for some guidance regarding "contructive receipt" rules in the context of a participant's ability to direct his invesments in the daily envionment for a non-qualified plan. Can anyone point me to some regs., rulings, procedures, etc. Example: If a participant is allowed to change his investmets daily, would he/she be in constructive receipt of that money? What about weekly? Monthly? Thanks for your help.

A sole proprietorship wants to incorporate mid-year and continue to maintain its SIMPLE plan. In other qualified plans I simply have the corporation adopt the sole proprietorship's plan.

However, is there a a "successor plan" issue under Notice 97-6 in having the corporation adopt the SIMPLE mid-year as opposed to January 1?

There have been previous threads talking about what to do when an employee has been permitted to make elective deferrals before meeting the eligibility requirements. The concensus of practitioners seems to say that you distribute the deferrals plus earnings back to the employee. Up until recently, you didn't need to worry about losses. If there are investment losses on the amounts improperly deferred, should you adjust the distribution to take into account losses?

Same question regarding excess 415 contributions. The regs (1.415-6(B)(6)(iv)) only mention distributing excess deferrals and gains. Should deferrals that are distributed in order to satisfy 415© be adjusted for losses? We are getting conflicting opinions from document and software providers.

Any input would be helpful.

I have a question about Credit Unions and a post I just read. I was unaware of the federal chartering/federal instrumentality connection. We are trying to coordinate benefits with an employer plan offered by a CU. The plan insists that it offers primary coverage to its employees only if they have no other coverage, but if their spouse has coverage the plan becomes a supplemental plan only. We have requested plan language and an explanation. Something doesn't sound right to me.

Does anyone have any good resources concerning an HMO's obligation (if any) to comply with ERISA mandates such as COBRA and the Mental Health Parity Act? While the law appears to apply only to employers, participants sometimes go after the deeper pocket. Are there cases, statutes or regs out there that would impose vicarious liability on the HMO if the employer doest not implement a plan that does not measure up?

Employer sponsors a 401(k) plan. Effective 3/1/01, the employer is also sponsoring a money purchase plan to cover a prevailing wage contract (davis-bacon) for their hourly employees. The money purchase plan has a 15% contribution. The Employer now wants to amend the 401(k) to exclude the hourly employees, who are the ones covered by the prevailing wage contract, since the hourly employees participation rates have always been poor and is likely to decline once they begin receiving the money purchase plan contribution.

The 401(k) plan itself would not pass coverage if these employees were excluded. However does it make a difference that they are the ones eligible under the money purchase plan? does the money purchase plan correct the coverage issue? Would allowing the hourly employees to opt out be a better option? (Or would they then still be included on the APD test?)

I appreciate any insight you may have.

If the Spouse changes jobs and the new company doesn't offer an FSA account, but he did have one under the old company, would this be a qualifying event so the insured could now elect into her companies FSA plan?

A large 401(k)plan does not currently allow for loans, and does not intend to add a loan feature. (The plan is already a nightmare administratively with its hardship provisions.) A participant is in bankruptcy (since 1996). The Plan Administrator received a copy of a ruling on a motion to borrow money from the 401(k) plan from the bankruptcy court. The order approves the request to borrow from the 401(k). Does the plan have to allow the loan?

If the plan is to allow the loan for this individual, doesn't it have to incorporate a loan policy and make loans to all participants on a reasonably equivalent basis?

Does ERISA (and the plan's choice not to allow loans) pre-empt the bankruptcy court's order in this case?