Should I invest in a Roth IRA or put the money in an employer matched 401K plan? The match is on a percentage basis & the money is distributed to the plan & then among the participants. I am not sure whether I should branch out to a Roth IRA or keep the money in mutual funds through the 40lK.. any suggestions/advice would be appreciated. Thank you.

My husband recently signed up for 3 AFLAC supplemental insurance policies. At the time of signing up, he was given 24 hours in which to view a brochure and then decide. He was told at the time that if he signed up and then did not want it, he would have 30 days in which to cancel. We received the policies and quickly cancelled them. My husband contacted his payroll department and informed then to quit withholding the deductions. He was informed at that time that these were Section 125 benefits and he could not cancel. We later received a letter from AFLAC saying the same thing. My husband at no time was informed this would be a Section 125 benefit nor did he sign any form saying he wanted to participate. He fully believe he had the 30 day "free look" period on the policies. My question is, can an employer do this? Can an employer make an employee participate in a cafeteria plan without the employee's consent? Can he get out of this since he never consented to participate in the plan?

My power plant complex is to be sold. The acquiring company has a similar benefit plan to the selling corporation. Employees are said to be retained, so no break in employment happens, hence no severance package. But years of service with the seller's pension plan cease with the sale, no more accrual or COLA happens, and we get the annuity value from the seller's defined benefit plan when we retire 10-25 years down the road, coupled with a seperate pension from the years of service with the new employer. Assuming the same career path at the same power plant, we appear to be in for a screwing.

If I remained employed at the original company, my annuity is calculated at [30 yrs X 110,000 (est highest 5 yr income at end of service) X actuarial constant]. Now, the calculation will be [(15 yrs X 61,000 X actuary constant) + (15 yrs X 110,000 X the constant)]. For the same career, the math shows at least a 25% reduction in future benefit value - not factoring in inflation. The seller's pension plan assets are 40% overfunded, but all pension assets associated with the seller will be retained with the seller. No transfer of pension assets takes place. No retention package is offered by the buyer.

Given that we are hardly the first group of employees to find ourselves in this situation, how has this sort of issue played out in the Courts? Do we have any recourse or protection? Are there any legal cases that have resolved this question?

Retiree asked union pension plan to increase benefits for retirees in pay status (only). Reasoning: his medical costs have increased dramatically since retiring. He stated to the board members that it was legal for them to make this benefit increase without having to increase the current benefits for those still contributing to plan. I see discrimination in favor of a class of participants. He was not asking that all pension benefits be increased across the board, just those who are fully retired and receiving benefits.

The multiemployer audit guidelines address the need to confirm that funds have not been transfered to other union trust funds, i.e. health trust, etc. Anyone know anywhere else to look for information on this? I am familiar with single employer plans, but not multiemployer.

Attorney is a sole proprietor (calendar year taxpayer) who hired his first employee in 10/98. Employee was over 21 years of age when hired and has earned over $450 of compensation in each year for 1998 thru 2000. In what tax year must attorney begin contributions for employee?

Can a government agency of a state start a discretionary profit sharing plan- how about nondiscretionary?

Can this plan include pick-ups under 414(h)(2)?

Hard to find materials on this- would appreciate help!

I am working on transfering certain employees from a DB plan to a Money Purchase Pension Plan. It appears that 411(e)(2) brings in the old pre ERISA 401(a)-4 and 401(a)-7 with respect to vesting requirements. Does this mean that we have to apply regulation 1.401-4©? Discrimination requirements of 401(a) do not apply- but what about this regulation under the old 401(a)-7? Does anyone out there operate a money purchase plan for a government plan- did you apply this regulation?

I am a Canadian citizen working here in the US on VISA as a non-resident legal alien. I know I can legally contribute to an IRA, but will I be taxed when I withdraw the monies at retirement age by both Canada and the US? I plan to continue residing in the US until that time.

Accounting Firm has a wholly owned Financial Services Subsidiary. The FS Subsidiary retains 12b-1 fees received from mutual funds in which the parent Accounting Firm's qualified retirement plan (PSP) invests. Prohibited? If so, exemption suggestions?

Do you know of a 403(B) plan that allows a one-time irrevocable election? Does the employer include the contribution made pursuant to the irrevocable election in the employee's FICA wages?

Does the incidental benefit rule apply to elective salary deferrals under a 401(k) plan? "Seasoned contributions" (i.e., contributions that have accumulated under the Plan for at least 2 years) under a Profit Sharing Plan can be used to purchase life insurance without regard to the incidental benefit rule. But, this exception is based on the principle that these contributions may be withdrawn from the Plan. Elective salary deferrals, on the other hand, cannot be withdrawn until a distributable event under Code section 401(k)(2)(B) has occurred. Therefore, it would seem that 401(k) salary deferrals are subject to the incidental benefit rule -- even if they're otherwise "seasoned contributions". Any thoughts? Thanks.

Does anyone have a worksheet to calculate contributions for self-employed participants? It seems everyone calculates the compensation and contribution differently.

Thanks

What forms and/or initial actions need to be taken by plan sponsor with the IRS to start the process of fixing some errors in a 401(k) plan thru the VCR program? (Assuming that these errors would fall under guidelines of using Standardized VCR Program.)

Thank You.

Regarding the DOL's aggressive attitude regarding employee withholding remittance date contribution requirements, I've got a question.

In brief terms, these requirements are that the employer needs to remit (or at least segregate) employee salary reductions to a 401(k) plan as soon as they can reasonably be segregated, but no later than the 15th business day of the following month.

My question is this...in order to fulfill this requirement, can the employer "accumulate" these withholdings in a separate account during the course of the month and then pay to the plan sponsor on monthly basis? (I think they can). And also, can the employer (which currently shoulders the burden of the total plan cost) use the accumulating interest during these months to help pay for the plan costs, thus avoiding the burdensome task of allocating this interest?

I terminated my employment in May of 2000. Plan year ended June. I am still waiting for my distribution check which my former employer is continuously delaying and only giving lame excuses. (Latest being the brokerage house is moving). The employer has received all of my signed distribution documents which were required.

Also, I have contacted the DOL as I have been trying to clear up other issues with this pension plan and employer, and was told they don't handle Pension Plans - only the PWBA does. What's up with that?

Thanks for any advice.

Have a client who has a girlfriend and IRS problems. His only visible asset is a Defined Benefit Plan and his goals are to make sure the girlfriend has income for her life and afterwards to set up some sort of charitable deal in his deceased son's name. Can he buy life insurance in the plan and name a CRT as beneficiary with his girlfriend being the income beneficiary of the CRT. If the IRS doesn't go after the assets while he is alive will they probably just go get them after he dies?

Thanks

Matt Tuttle

Can a family owned or closely held corporation deduct LTC premiums for non-employees who are significant shareholders (spouse / children)? If the corporation pays for the LTC, is that taxable to the employee? Or would the tax treatment be similar to health insurance for family members?

I have a 100% owner of a company who wants to invest his 401(k) account balance back into the company. He has already maxed his personal loans from the plan. Currently there is no company stock in the 401(k) plan. My quesions are: What are his options for investing his account into the company? What options does he have without it being a prohibited transaction?

A QB became eligible for COBRA coverage Aug1. They elected and paid one months(Aug) premium on Sept17. On October 20 he paid another months premium(Sept) therefore catching up within the 45 day time frame. When do I start counting the 30 day grace period for the October premium? I am assuming he must pay the October premium by October 30 or his coverage will be cancelled October 1. Thank you for any help!!

Can a decedent's death tax exemption include his IRAs?