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.

I converted my traditional IRA to a Roth IRA last October 2000. Soon after, I discovered that the income limitation for a conversion is different from the income limitation for contributions. Because I was afraid of exceeding the income limitation, I recharacterized back to a traditional IRA. However, the taxes had already been taken out for it! Now I'm trying to prepare taxes for 2000, and don't know what to do... I am going to be able to convert to the Roth IRA in 2001 with no problems, but do I have to pay taxes again? Will I be penalized for this? Please help!

DOL Reg. 2520.104-23 states that a top hat (my choice of words, not the DOL) filing must be made within 120 days after the plan becomes subject to Part 1 of ERISA. A plan becomes subject to if it is established or maintained. So, for purposes of counting the 120 days do you use the date of adoption or the effective date of the plan?

I'm looking for information about employee sabbatical programs: who offers them and the policies around them.

I have been asked to head a team on work alternatives, specifically we would like to have the option to work at home as our activities are perfect for this. Do any of you have information that you can share with me on this topic. Thanks!

A company sponsors a 401(k) Profit Sharing and a Defined Benefit Plan.

Client would like to satisfy top heavy requirements by showing that the sum of the hypothetical accrual attributable to profit sharing contributions and the defined benefit accrual is at least equal to the defined benefit minimum.

1.416 Q & A M-12 outlines 4 methods to satisfy the minimum benefit requirements if participation is in both a DB and DC plan:

1. Provide DB Minimum

2. Floor offset approach (Rev. Rul. 76-259)

3. Comparability analysis (Rev. Rul. 81-202)

4. 5% DC contribution

Is the comparability analysis under Rev. Rul. 81-202 still a valid method to satisfy the minimum benefit requirements? (I ask because I have had difficulty finding the cite on a internet research network).

Can the Floor offset approach be used if the actual DB formula does not use a floor offset?

In a merger situation, the plan being merged into our clients plan used elapsed time for purposes of vesting calcuations. Our client uses the 1,000 hour rule. How do we calculate vesting service on the employees coming into our plan? Do we calculate their elapsed time credit as of the merger date and then begin to use the 1,000 hour rule? or do we completely recalc using the 1,000 hour rule? The old plan had 5 year cliff and our plan has 3-7 year graded. We do have some participants who have elected to stay on the 5 year cliff schedule.

Under the new gateway rules is it true that you cannot have a last day of year, 1000 hour rule in order to get a contribution or you will not pass the gateway.

We have an employer that maintains a mpp and a psp, both plans are being terminated as of May 15, 2000. The last contributions made to the mpp were for the PYE 12/31/99. Is there a required minimum contribution due for the 2000 plan year up until the termination date? The mpp has issued the required participant notices and all benefits were to be frozen as of 5/15/00. Upon distribution of assets do gains/losses get allocated to the current date of distribution? If not, since the plan has incurred losses since 5/15 does the employer have to make a contribution for the difference? The plan only has 6 participants.

What steps do I need to take to terminate an ESOP, and what statues and regulations do I need to comply with for the termination? I've been going in circles trying to find out specifics. Thanks!

For purposes of ADP testing, is 2000 truly a transition year with respect to the prior year and current year testing method? If we choose current year for 2000, are we locked in, so to speak? Or can we change back to prior year in 2001? I have looked at Notice 97-2, Notice 98-1, Rev Proc 99-23 and Rev Proc 2000-26 and I might as well be looking at hieroglyphics. Please help!

What steps do I need to take to terminate an ESOP, and what statues and regulations do I need to comply with for the termination? I've been going in circles trying to find out specifics. Thanks!

Quick question: I am currently in the financial services industry, but I'm looking at a position as a retirement services consultant with a bank. Within the job profile, it mentioned a certification called CRSP. I have been trying to find some information on that certification, but I don't have any idea what it means. Can anyone help?

I need to draft an indemnification agreement for a client to sign to hold harmless the trustee for the client's plan. This agreement is protect the trustee since the client is refusing to take proper correction methods as advised by the trustee. Does anyone know where to get a form of such an agreement?

Thanks.

I'd like to revisit something that was discussed briefly here about a year ago, the 5% "safety valve" rule in reg. sec. 1.401(a)(4)-3©(3). Specifically,Iwould like anyone's thoughts on the second part of the rule, which refers to a determination by the Commissioner that the plan does not discriminate. What is the nature of this determination? Must there be aformal determination letter requested? fso, how is the request made? On what form? Or is it an ad hoc determination made by an agent in the course of an audit?

I am researching the market for providing financial education services (versus financial counseling or financial advisory services)--i.e., whether there is an interest by employers, associations, nonprofits, etc., to provide these types of services to their employees, members, or the public at reduced or no cost, with the employer, association or nonprofit paying the difference between the education service providers' fees and the amount paid by the recipient. Alternatively, if the public would pay for these services, seeing it as an alternative to the debt counseling and financial planning services that serve a different need.

Is there an interest in this type of service (we probably all agree there is a need!)? If so, any suggestions on charges, how to reach the payer or recipient groups for providing such services, etc.? Any thoughts on a dedicated part-time arrangement with a church, employer, etc., would be helpful as well. Any thoughts???

Thank you!