A participant terminated in January 2000. We provided her with benefit elections forms after the January 30, 2000 valuation was completed.

She was paid by the Trustees in May 2000. Lo and behold, when we come to the September valuation we learn that she had been rehired in April. No one told us or told the trustee not to pay.

This is a 401(k) plan. She is 49 years old. She took the money in cash (less her $900 loan) and of course it's been spent.

What should happen now?

In setting up a NQDC plan (employee will have a hypothetical account balance, which is credited with earnings at a specified rate each year; account balance paid in installments following retirement, with lump sum death benefit if death prior to retirement), our consultant is concerned that the payment of the death benefit in lump sum will not be deductible in full in the year paid. Any thoughts? Thanks.

A Canadian citizen wants to sponsor a qualified plan for the U.S. corporation that he owns. He has a U.S. social security number and pays U.S. taxes. Although he owns a house in the U.S., his main residence is in Canada. He and his wife (also a Canadian citizen) will be the only participants in the plan and they would like to also be the trustees. Can they be trustees even though they are not U.S. citizens? Where in the regs is this addressed?

In 1998 I converted my Traditional IRA to a Roth IRA. I did this so I could spread out the taxes over the next 4 years.

Now I want to withdraw approximatley the amount that I have not paid the taxes on yet for a first time home purchase. Though, I have not yet fulfilled the 5 year holding period for the ROTH.

Can I make this qualified withdraw? Or do I have to recharactorize to not be penalized. Or am I out of luck?

I am working with a governmental employer that wants to establish a 457 plan. I am aware of a group in D. C. called ICMA that does a very professional job on these plans. Can anyone give me any other entities that can establish the framework/investments for such a program? Thanks for your help.

Multiple conversions from traditional IRAs in the same year are allowed. My question: Since only one recharacterization is allowed per year, can it be just one of the conversions?

Example: Three funds owned within same fund family.

Partial of fund A converted in January

Partial of fund B converted in May

Partial of fund C converted in August

If fund B tanks during year, can only fund B be

recharacterized in December?

Answer any different if funds were in different families?

Thank you

A client of ours has a top-heavy 401(k) Plan in which the key employees deferred >3% for 1998 and 1999. We took over the case recently and discovered that the top-heavy contributions to non-key employees were never made. We notified the client of this required contribution (about $18,000.00 for the 2 years) and they refuse to make this deposit.

In my opinion, this would result in the Plan losing its tax qualified status and the usual ramifications for the employees in the Plan.

Is there anything else?

I don't think there can be an excise tax for missed minimum contributions to a Profit Sharing Plan. Am I correct?

Thanks for any help.

When testing a DB under 401(a)(4) on a benefits basis and the measurement period includes future years, how is average compensation defined? It is clear that future salary increases cannot be assumed, but 1.401(a)(4)-e(e)(2) says that average comp must end in the "current plan year", whereas 1.401(a)(4)-3(d)(2) seems to imply that assuming continuation of pay at the current level is an acceptable assumption.

For someone years away from retirement, must average pay be calculated based upon the comp history to date, or may it reflect assumed continuation at the current rate, i.e. average pay=current pay?

Any clarification of how others interpret this would be appreciated.

Anyone know where I could find a ballpark of the percent of 401(k) that do an annual match versus those that put in the match for each payroll period (counting only plans that do offer a match)?

I have a client with a 401(k) profit sharing plan (a prototype plan) and he wishes to terminate this plan and start a SIMPLE IRA Plan. Should he file for a determination letter with the IRS? The prototype plan was adopted in 1/1/99.

Also, I was wondering if it was possible to start up the SIMPLE plan and then merge the profit sharing plan into it?

It seems that would be simpler.

Thanks for any help you can provide.

A terminated participant who reached NRA was given the paperwork to process her benefit from a DB plan. Subsequently she died (a couple of years later) before returning the paperwork. Is the plan obligated to pay back payments of the 50% J&S benefit from NRA to date of death to her estate (assuming she was married)? If not, does the spousal death benefit have to be based on the accrued benefit with an actuarial increase from NRA to date of death?

Can a Governmental Money Purchase Plan allow for in-service distributions of vested employer accounts. If they can, are they subject to the general profit sharing type rules that the money must have been in the plan for 2 years or 5 years of participation?

We prepare statements on a cash basis. Has anyone developed a contribution analysis report on a cash instead of accrual basis?

My situation is after i was injured on a govornmental

job, and forced out on disability my spouse aquired

medicare to supplement our self insured plan medical

coverage to limit our out of pocket medical expenses.

I pay for self insured benefits out of my disability

check, and my spouse pays for the medicare. My self

insured plan took the position that the medicare would

be primary, and that until we pay $1000.00 out of our

pocket after what medicare pays then the self insured

plan won't pay anything. We could go an entire year

and not accumulate enough bills to pay $1000.00 out of

our pockets, yet i am paying for coverage that i may

never get benefits from. Can someone shed some light

on this. It makes no sense to me.

I am just learning about Roth IRAs and have a couple of questions. My husband and I both work, have no children and earn under $160,000 per year. We are both 30, so it will be quite a while before we retire. I heard that withdrawals can be made from a Roth for any reason at any time without being taxed. For example, if one of us were to become temporarily disabled or I stopped working, could the Roth be used as "temporary" supplemental income?

This message concerns the IRS' announced plan to begin auditing school districts, etc., to ensure that they are complying with the statutory requirements re 403(B)'s. I first became aware of this plan of the IRS in December of 1999 when I heard IRS agent Robert Architect speak on it.

Has anyone out there actually been audited? Has anyone made use of the IRS' voluntary compliance program? Is this something I should stop losing sleep over?

Where can I find a copy of Notice 97-10? I'm having trouble locating a site.

Why is my ROTH IRA Contributory Account going backwards? I have contributed a total of $2000 for three years, which SHOULD add up to $6,000 Plus Interest and it's only valued at about $5600 today.

How do I get it out of control of the stockbroker and back into the control of someone who will make it GROW! After all, the purpose is to RETIRE, not put money into a sinking fund!

Thanks!

If an error, as similarly stated in questions 122, 123 & 129 under investment plan compliance, was first executed in 1997, but not found until 2000, is APRSC not available? Is the only recourse disclosure to the IRS through VCR, etc.?

Plan has been terminated all checks have been issued prior to the end of the Plan Year. However, two checks remain uncashed at year end. Can the Plan file a final 5500?