The two year old class action lawsuit against Nasdaq marketmakers/brokers has apparently been settled and checks were delivered this past week. Nice year ending surprise for those that signed and returned the forms. Apparently just a couple of trades got you a check for $25 and active traders could get $4,000+.

Question 1: Assume the check you receive is large and based upon trading activity in an IRA. The check indicates it was related to an IRA. Can these funds be deposited into the IRA as a kind of rollover? It would seem that the settlement represents a court view of your additional profit from the alleged pricing abuses. Therefore if the "abuse" had not occured, theoretically the IRA assets would be greater. I can remember a custodian accepting a misdirected dividend check (sent to residence and not the custodian... too long a story to explain) to be re-deposited to the IRA.

Question 2: What is the likely tax status of settlement checks? Many of the checks will be based upon standard brokerage accounts. The letter cites IRS Code 468B "whether a distribution to a claimant is included in the claimant's gross income is generally determined by reference to the claim in respect of which the distibution is made..." Wow, that must be clear to everyone!

Knowledge is great, but conjecture and analogies are also welcome.

Why did my company not offer COBRA to me, when I was told a few days ago that they had to?

I have a client who is getting ready to distribute funds to a terminated employee who owes the company money. The client asked if they could net the amount owed the company out of the retirement plan distribution. Has anyone had this situation before?

I have a profit sharing plan that terminated, distributed

and filed a final return as of 12/31/98.

The trustee of this defunct plan has received, as a result of a class action lawsuit, a refund of an intangible property tax ($4,800).

What does he do with it?

Do we file additional 5500s having already filed a "final" return?

If we allocate the funds based on the distributions made, on

what basis can these additional monies be rolled?

Confused!

Is there a prescribed method for determining the Participant's retirement age under Section 415(B) for adjusting the DB benefit limit to an age earlier than the Social Security Retirement Age? In other words, is there a required method of exact age, nearest age, etc?

Thanks.

I would like to establish a custodial ROTH for my sister. She is 25, but has no current earned income because she is in medical school. I thought I read somewhere that after a certain age, you may contribute to a ROTH without having earned income. Any assistance would be greatly appreciated - thanks!

Can a QDRO issues to a DB plan provide for an assignment of a flat dollar amount?

i worked for lukens steel for 30 years prior to bethleham steel buying the company out. i have since left the company, but have not yet retired. my pension is frozen, however i get burned by 6% for each year i am under the age of 62; currently 53. my worry is that bethleham will go under. will my lukens pension still be there.

In a recent discussion with another person in the pension business, I was told that a IRS 5305-SEP form COULD be used when a Money Purchase was combined with it but only if the SEP had been opened first. It is my understanding that if a SEP is to be combined with any qualified plan, that a prototype document must be used to open the SEP (or restate the SEP) to provide for the proper top-heavy contribution language. I'm not aware that it matters which came first the SEP or the QP. Can someone shed some light on this subject for me.

I am wanting to establish a Roth IRA for 2000 for my wife and I. I am curious what the final date is that I have to have the accounted opened, as well as when it has to be completely funded to count for the year 2000?

Do I have until April 15th 2001 to open and fund the account?

a small employer group(approx 20 employees) has an employee retiring on 12/31/00.

that employee is currently enrolled in the group health plan and elgible for medicare.

is the retiring employee eligible for COBRA programs since he is already eligible for medicare?

If a participant terminates employment with an outstanding loan balance and rolls the funds into and IRA, how many 1099-R forms should that participant receive and what are the distribution codes that should be reported on the forms?

If a participant terminates employment with an outstanding loan balance and takes a lump sum distribution, how may 1099-R forms should that participant receive and what are the distribution codes that should be reported on the forms?

If a participant terminates employment with an outstanding loan balance and rolls the funds into an IRA, how many

1099-R forms should that participant receive and what are the distribution codes that should be reported on the forms?

If a participant terminates employment with an outstanding loan balance and takes a lump sum distribution, how many

1099-R forms should that participant receive and what are the distribution codes that should be reported on the forms?

Work for a company that has esop. In April, company is changing to 401k. Can I roll over any of my esop now to any

other tax deferred plan. We were told we could roll over up to 70% now, and the balance before we put any money into 401k. Does anyone know anything about this? Please advise.

I am married and will file a joint return. We both have income of approximately $50,000. Can we both set up a Roth IRA and each contribute $2,000 to the Roth IRA?

I have discovered that a client of mine has reverted plan assets back to the employer. They claim that they "overfunded" the plan by estimating contributions throughout the year. After year-end, they simply write a check from the plan to the employer. Is this truly a prohibited transaction and if so, does it come with a 50% excise tax? Should they attempt to correct by putting those assets back into the plan? That would seem to compound the problem, but who knows? I would like to help put this client on the straight and narrow, but also minimize the correction costs. Please help!

I have a plan with a 401(k) piece - no eligibility, immediate entry. It also has a match and profit sharing piece with 1 year, age 21, dual entry. I want to set up 2 different plans, one for 4k and one for match/PS (due to the different entry dates). If I do this, how do I test ADP/ACP? The ADP test will have more participants than the ACP. Would I have to manually calculate the multiple use test if needed? Would there be a more efficient way of testing the plan? Let me know if you need further clarification.

Thanks for all information!

A retired participant in a DB plan is entitled to receive a monthly life annuity in the amount of his 415 limit. He started receiving payments a couple of years ago, but the amount paid was only half of the correct amount. How does the plan sponsor make this right? Pay the shortfall brought forward with interest based on the plan actuarial eq. definition? If so, is there any 415 concern in the current year when distributing the 415 limit plus the "make-up" amount?

Say you have 3 affiliated corporations (A, B, and C) which are considered as being within a control group under the IRS Code. They are located in separate states and maintain separate health plans. Corporations B and C file for bankruptcy and the health plans are canceled. Can the employees of the now defunct companies B and C demand Cobra coverage from company A's health plan (assuming that health plan provides coverage in the employee's state of residence)?

The IRS cobra regulations (Sec. 54.4980B-2) define an employer as a person for whom services are performed or any other person that is a member of a group defined in Section 414 of the IRS Code (i.e., a control group). This would seem to indicate that, for purposes of Cobra, company A could be considered as an employer of employees of companies B and C. Am I reading this section wrong? Does it apply only for purposes of counting the number of employees a particular company has to determine whether it is subject to federal Cobra, or does it mean that a control group company is obligated to offer cobra to employees of its affiliated companies?

An old, bearded shepherd, with a crooked staff, walks up to a stone pulpit and says . . .

And lo it came to pass that the trader by the name of Abraham Com did take unto himself a young wife by the name of Dot. And Dot Com was a comely woman, broad of shoulder and long of leg. Indeed, she had been called Amazon Dot Com. And she said unto Abraham, her husband, "Why doth thou travel far, from town to town, with thy goods when thou can trade without ever leaving thy tent?"

And Abraham did look at her as though she were several saddle bags short of a camel load, but simply said, "How, Dear?"

And Dot replied, "I will place drums in all the towns and drums in between to send messages saying what you have for sale and they will reply telling you which hath the best price. And the sale can be made on the drums and delivery made by Uriah's Pony Stable (UPS)".

Abraham thought long and decided he would let Dot have her way with the drums.

And the drums rang out and were an immediate success. Abraham sold all the goods he had, at the top price, without ever moving from his tent. But his success did arouse envy. A man named Maccabia did secrete himself inside Abraham's drum and was accused of insider trading. And the young man did take to Dot Com's trading as doth the greedy horsefly take to camel dung. They were called Nomadic Ecclesiastical Rich Dominican Siderites, or NERDS for short.

And lo the land was so feverish with joy at the new riches and the deafening sound of drums, that no one noticed that the real riches were going to the drum maker, one Brother William of Gates, who bought up every drum company in the land. And indeed did insist on making drums that would only work if you bought Brother Gates' drumsticks.

And Dot did say, "Oh, Abraham, what we have started is being taken over by others". And as Abraham looked out over the Bay of Ezekiel, or as it came to be known, "eBay", he said, "We need a name of a service that reflects what we are". And Dot replied, "Young Ambitious Hebrew Owner Operators".

"Whoopee!", said Abraham. "No, YAHOO!", said Dot Com.