I converted a traditional IRA to a Roth IRA in 1999. While I am eligible to do so, incomewise, the tax liability is too much for me. Can I recharacterize it and, if so, how? Thanks for the help.

I have a question for anyone who can direct me. Is there any requirement (federal or state, specifically Washington State) to allow new employees a grace period to select their initial health benefit plans? This concerns whether or not a company can require that enrollment forms be submitted immediately (i.e., 3 days) or is there some other time frame? This question does not go to eligibility, just how much time an employee must have to submit their enrollment forms.

Thanks!

If I read the PWBA Press Release correctly, it is clear that the 7/31/00 deadlines that would normally apply for calendar year plans is extended to 10/15/00 without the need to file for an extension.

Be careful that they are NOT extending an 8/31/00 deadlines (for 2/1/99-1/31/00 plan years) to 10/15/00 without the need to file for an extension. These plans still must filed for extension; of course, the extension can be to 11/15/00.

This caveat also applies for 3/1/99-2/29/00 (deadline 9/30/00) and for certain short plans years as well.

I represnt a LLP with a 401(k) plan. The plan failed the ADP test for 1999. The firm was slow getting the census to the administrator, so the excess has not yet been distributed to the partners. Does anyone have any ideas for avoiding filing a 5330 and paying the 10% penalty tax. I can't find any way to avoid it but thought I would ask. Thanks.

A final 5500 is being prepared for a plan. The plan merged assets into a successor plan with the assets transferring in June of 1999. A dividend of $35.00 posted to the account after the asset transfer. The dividend is still in the account. Can the final 5500 be prepared based on the asset transfer and can the late posting dividend be ignored? What should be done with the late posting dividend?

Employee of company "A" resigns to work for company "B"in a like employement postion. At his date of termination from “A” he is 80% vested (six years of service) in the company “A” 401(k) plan and takes both EE and ER vested matching funds in an IRA rollover. After six months at company "B" he enters the company "B" 401(k) plan. 4 months later company "B" his current ER agrees to buy company "A" his former ER for stock. In the purchase agreement company "B" agrees to recognize all years of service for all employees at company "A". The transaction is completed 14 months after the employee left company "A" and joined company "B". However company “B” now says that only current company “A” employees will have prior years of service credited. We contend that since the employee went from A to B directly, the employee should be credited with all years of service at both A and B and therefore 100% vested in all ER contributions. Any ideas? Is this not common? It would not be a major concern however the outcome is $15,000. to the participant.

I have a sticky situation that needs some insight.

A 401(k) plan that my firm advises recently changed third party administrators. When the new TPA reviewed last years activities, it was discovered that a terminated EE received approx. $10,000 too much. It was also found to be a human error by the former TPA.

The clients point is that the TPA needs to put the money back in the plan and if they choose to attempt to recover, it's on the former TPA. The former TPA is balking, claiming the plan sponsor needs to recover the money.

Anyone with advice or experience?

I have a fully insured 412(i) plan which is terminating this year and the client will not pay the annual premium. All insurance contracts are annuities with about a 4% return.

To be a 412(i) plan, premiums must be paid timely and therefore this plan no longer satisfies 412(i) and is therefore no longer exempt from the minimum funding standards.

My question is what about the actuarial valuation and Schedule B.

If I run an actuarial valuation, I'll have to select a funding method and use reasonable actuarial assumptions. If I select Individual Aggregate and use a 4%interest assumption, the normal cost would be about the same as the premiums. Is it reasonable to use a 4% interest assumption since all $ are invested in annuity contracts paying about 4%?

Is there anything else I need to consider?

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We have several instances where employees are wanting to add their children to benefit plans who are currently residing in another state (Mexico) and are coming to live with the employee. Often times the employee is not married to the father of the children so there is not a custody change or divorce situation. I believe this qualifies as a qualified status change under the "change in residence" provision.

Question is: What type of documentation can be asked for that would be credible and proove that the child(ren) will be relocating on a more "permanent" than temporary basis? We wish to eliminate the situation of having dependents bouncing back and forth and in and out of coverage.

What do others currently do to obtain this type of proof?

Any suggestions would be much appreciated!

Help!!

My dad wants me to start up a Roth IRA, and I don't know where the best place is to do it! What are good companies to go through and are there advantages/disadvantages to any of these companies?

Thanks so much ...

Following up on an earlier strand, is there recent word from the IRS that it now agrees with the Martin v. Comm'r case (96 TC 814) and will leave unchallenged NQDC plans which allow participants to wait as long as possible during the deferral period before electing the form (e.g. lump sum or installments) in which distribution payments will be made?

A client has indicated to me (without any citation or other direction) that this may be the case. Anyone have any input?

Hello,

I am a recent college graduate and I don't have much experience with IRA's. While I was able to put a lot of money into Mutual Funds as I was growing up, this is the first year I have money that I know I will not need for school, or whatever life throws my way. I wanted to convert $2000 of my Janus Mutual Funds into a Roth IRA, but when my dad did my taxes for me, he found that I was only able to get a regular IRA. Can anyone tell me why?

Here are my circumstances, I was in school until May of 1999 and I had a paid internship from Jan. 1999-July 1999 where I earned about $6,000. I earned an additional $1,850 at a job at my university, and about $1,600 from Nov 1999-Dec 1999. I have no student loans, everything has been paid through scholarship or part-time jobs. I was married in August, the marriage isn't going well so we are filing our taxes married filed seperately. He made about $17,000 last year. So all in all, I estimate that I made about $9,500 last year, plus whatever I made from my mutual funds. With capital gains taxes I'll have to pay about $700 in taxes, but if I do the regular IRA I will get about $300 of that back. My question is-what is preventing me from getting a Roth IRA? This is what I would prefer. Thank you for your help!!

We are trying to find general policies concerning cell phone use. Many of our employees are given phones as part of their benefits package. Does anyone have any good resources for policies for a high-tech internet start up?

We recently assumed administration for a sponsor's mpp and p/s plans (separate documents). Their accountant has been filing one 5500 for both plans, using combined data. Should we start filing separate returns? If yes, how would we do this? Show assets being transferred out and into the other plan? Won't the IRS ask questions?

We have a Section 125 plan for FSAs and premium reduction for the health plan. If an employee experiences a status change, such as divorce or child reaches maximum age, but doesn't notify us until after the 31 day window, can the spouse or child be dropped when we are notified? Under our self-insured health plan, the former spouse and over-aged child are no longer eligible dependents for coverage and claims won't be paid. If they are dropped from our health coverage, can the employee contribution changed be changed (or is that their punishment for late notification) What type of documentation should we keep in the event of an audit by the IRS of our Section 125 plan?

Plan sponsor has a mppp with assets managed by a bank trust department. The sponsor paid the management fees directly. The manager failed to bill the sponsor for over a year, and the fees were automatically deducted from plan assets. Now the sponsor wants to reimburse the plan for these fees. I know that there are some restrictions here, but cannot find supporting documentation. The deposit would not violate contribution limits, but obviously would cause the plan's formula to be exceeded. Also, I believe such reimbusement must be allocated according to the plan's formula. Any ideas and references would be appreciated.

What limitations are there for establishing a SIMPLE IRA or SIMPLE 401k in 2000 if the company already has (1) a defined benefit plan, and/or (2) a profit sharing plan?

I have a dentist with an integrated mppp and a cross-tested p/s plan. There is only one HCE and, therefore, one rate group. The p/s plan passes the 401(a) nondiscrimination test by the ratio percentage test. Since the average benefits test is not needed, I assume I do not need to include the mppp for testing. Am I correct?

I have a client that is switching investment vehicles. Previously, he had a pooled account with six or eight mutual funds, mostly no-load.

Because of the time needed to administer the plan, they're switching to an insurance company product for investments, statements, etc.

The Trustee's only concern is that the employees will be absorbing an "invisible" charge at the switch. Basically, their account balances get invested in mutual funds at a slighly inflated share price.

Anyway, the Employer is amenable to making up roughly half the hidden charge. It'll be about $10,000, so the employer wants to allocate $5,000 on an account balance basis.

I've seen some cases where IRS has allowed additional contributions to true-up a fiduciary breech and the like. Is this do-able?

I'm fairly sure that highly comp'ed employees have larger account balances, but also may be smaller in proportion to pay.

Doest the term eligible rollover distribution include lump sum payouts of long term disability benefits pursuant to an LTD insurance policy, or is it limited to distributions from qualified retirement plans due to a participant's disability.

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