My daughter is the beneficiary of her father's pension plan. As the non-spousal beneficiary, they are telling her she must receive this as a "lump sum" distribution, and cannot roll it over. She will be entering dental school next year, and we want to use this money to fund her schooling. Is there any way to get this "lump sum" into a Roth IRA? if so, would she then be able to take distributions on the capital investment without penalties? She is 19, has no significant income, and we have $112,000 to protect. We need a secure vehicle, with minimal tax implications, and reasonable liquidity.

Have we heard anything about extension of the 9/30/01 sunset deadline on the Mental health Parity Act?

A Plan has a SS offset formula. Normal Ret is age 65.

The offset is up to 45% of PIA.

If a person has a SSRA of 66 and retires at age 65 should the Plan use the PIA at age 66 and then reduce it by 1/15 for commencement at age 65 when determining the offset portion? It doesn't seem right to use the PIA unreduced. It seems it s/ use the SS Ben at the ben commencement date of 65. Any thoughts? Plan says that it is just the unreduced PIA, but I tend to disagree.

Gary.

The recent article from the Cato Institute about Social Security has left me with a rather bad taste in my mouth. Below are some quoted excerpts (full article here: http://www.cato.org/dailys/11-17-00.html), and my responses.

"We may not yet know who the American people chose for their next president, but it is becoming increasingly easy to see their preference when it comes to Social Security."

Since when do we put bread and circuses ahead of sound fiscal policy? As much respect as I may have for individual Americans, history makes it clear that the majority rarely qualifies any decision as a good decision.

"Opponents of Social Security privatization mounted a major campaign to demonize Bush's proposal."

As with most major policy changes that are first introduced in a major campaign for elective office, there is always ample fodder for gainsayers to find fault. The basic idea of privatization has merit, but Bush's proposals contain as much blue sky as anything I've seen in the last 25 years. If this is demonizing, then we'd better all lay in a few gallons of holy water. The recent presidential campaign was, in my opinion, straight from Hell.

"Yet despite this unprecedented campaign of distortion and fear mongering, the American people came down firmly on the side of privatization. Exit polls showed that 57 percent of American voters supported individual accounts."

This statement and others in the article go far beyond the run-of-the-mill creative statistics. (sarcasm) I would love for someone to show me the law that states that exit polls reflect the will of the American voters. Why count the votes? Exit polls are all you need. (/sarcasm)

"Results from further down the ticket also favored pro-privatization candidates. High-profile privatizers, such as Sen. Rick Santorum of Pennsylvania, were re-elected..."

While the first statement is arguable, invoking Sen. Santorum is a big mistake. He was elected because the Democrats in Pennsylvania could not find a candidate to challenge him. Social Security, or most other issues, had nothing to do with it. I know: I live and vote in Pennsylvania.

A corporation acquires another corporation in a stock deal. How are highly-compensated employees determined during the look-back year? Are the previously unrelated employers treated as one employer for purposes of determining who is an HCE? Where in the regulations/IRS pronouncements does it say this?

I have a claim in our office for abortion on a brand-new self-funded plan member who has no creditable coverage. I am inclined to say this is subject to the pre-existing exclusion, but the relation between abortion and maternity gives me pause. I don't want to run afoul of the pre-x rules regarding pregnancy.

Has anyone handled this situation before? I am wondering if the determination might hinge on the reason for the abortion.

Any help would be appreciated!

My company is a 100% S-Corp ESOP. The ESOP is our only retirement plan. I have attended many ESOP seminars and conferences, and cannot find any other company that uses the ESOP as the sole retirement plan.

I have been asking for years to install another, more viable retirement plan(401k) but it's falling on deaf ears. There seem to be many many ESOP advocates out there but when I ask the question of what happens when the company goes belly-up,burns down, etc, I get the old hairy eyeball !

I have a significant amount of $$$ (over 100K) in my ESOP account, and I am nervous it won't be there when I retire ( in 20 years).

What can I do to convince the company president that we employee owners need to diversify our retirement funds in the future? Am I wrong in assuming we're up the creek if the place goes belly up? Will the creditors understand I need that stock valued at what it was before the 2nd Great Depression?

Is there any way to test dividend allocations that Quantech calculates?

A plan is amended creating a short plan year by switching from a plan year ending 12/31 to a plan year ending 6/30. What are the ADP/ACP testing requirements? Should tests be done for 1/1 - 6/30 for the year the plan was amended, and then 7/1 - 6/30 thereafter, or should it be 1/1 - 12/31 for the year the plan was amended and an overlapping 7/1 - 6/30 test for the first full plan year?

Does anyone know if the 411 post normal ret age accruals apply to State Plans? i.e. for a teachers plan? I thought there may be something in ADEA that might require a gov plan to apply 411 post NRA accruals.

This has to do w/ receiving the greater of AB or age 65 act increased AB.

Gary

A Plan has a formula equal to:

1.5% * svc (limited to 40 years) * avg pay

less

66 2/3% of Soc Sec Ben.

The offset in its current version does not seem to be a fixed formula or a unit credit formula. It would appear that the 66 2/3% would either have to be prorated for service under 40 or would have to accrue at say 1 2/3% per year for a max of 40 years/ What do you think? Is there an omission in the formula? Is it illegal since it doesn't explicitly include one of the above?

Has anyone got current insight into the issue of whether Affiliated Service Group rules apply to a corporate director who owns less than 50% of the underlying corporation. The issue is whether that Director can establish a SIMPLE retirement plan using his Directors Fees (in addition to his coverage under the primary corporation's conventional qualified plan). I am still not sure whether a Directorship would be considered a 'Service Organization' under 414(m)(5).

Can an employee continue to defer while on short term disability?

We received a response to an IRS General Information Letter Request confirming that the rule of parity applies to employees and not just participants. This has confused me for a long time and we reached a point where we had to know.

General information letters are free and may be requested at the following address:

Employee Plans Technical Branches, IRS, 1111 Constitution Avenue, N.W., Attn: T;EP; Room 6052, Washington, DC 20224. Turnaround time is 30-60 days.

We sent in a detailed request with examples, but if all you want to know is whether or not the rule of parity applies to employees or participants, just send in that simple question. The information letter does not apply to a specific set of facts but expands on information already out there that may be confusing.

Hope this is helpful to some of my fellow strugglers.

Are you aware of any IRS plans to begin auditing 457(f)plans in school districts? Any comments on pairing a 457(f) and 403(B) in a district as a method of sheltering retirement incentive pay?

Has legislation been passed yet that will allow me to roll over the funds in my 457 account to an IRA, upon retirement?

Currently, what are the timing requirements for filing a form 5300 and form 5309? Assuming you want to obtain a determination, how long do you have? Is it 90 days after the START of the year in which the plan is adotpted? Is it 90 days after EXECUTION of the documents? Is it 90 days after the END of the year in which it is adopted? Or, is the time period for obtaining a Deterination suspended temporarilly so that you can continue waiting? Please give a citation to support your answer.

In Feb 1999 I rolled the company contribution portion of my 401k saving plan into a Merrill Lynch IRRA distributing the money across several mutual funds. This past summer I sold the mutuals and the money is currently in an ML money market. Can I roll the money back into my 401k savings plan? I realize I can not put it back into company stock which was the companys contribution from where it came from, but I want to roll it back into one of the 401k funds where my contributions currently reside. I have not made any additional contributions to the ML account and have only made a small return on it. The 401K plan administrator says yes but ML says no. Who is right?

I have read Roth rules and regs and would like confirmation on a few points:

1.) If you withdraw conversion money after it is in a Roth for 5 years and you are not 59 1/2 it seems to me that the 10% penalty still applies, is that so? (only deductible money was converted).

2.) Earnings on contributions or conversions would be subject to 10% until an exception was to apply, 59 1/2 etc.

My filing status is married filing jointly. If I want to

convert my traditional IRA to Roth, do I only consider my IRA funds, or do I need to include my spouse's too? Also, do

I need to include 401(k) funds?