Help, need an actual example of a defined contribution plan used in an actual collective bargaining agreement. Anybody with good examples, please help and email me at: doniec@hotmail.com THANKS!

In 1998 I converted a $10,000 traditional IRA to a Roth IRA, and elected to spread the income over 4 years ($2,500 each year). Therefore, on my 1998 tax return, I paid tax on $2,500 of the $10,000 at the 15% tax rate [10,000*.25*.15] = $375.

In 1999, I recharacterized the entire conversion back to a traditional IRA. On my 1999 tax return, how do I reclaim the $375 I paid in extra tax last year? Or do I just make my traditional IRA "basis" $2,500?

What are the consequences (tax, penalty, etc.) on taking out 100% of my Roth IRA? I converted in 1998 and paid the first 1/4 taxes in 1999. I have earnings of approx. $20,000 from investing it in stocks. Are these earnings taxable? Is the 10% penalty on the principle or the whole amount (75k)? Is there any exemption for taking the money for business start up capital? And lastly, if I really need the money now, am I still crazy to take it out, considering all the penalties?

Could someone please explain to me the difference between W-2 wages and 3401(a) wages? Does 3401(a) wages automatically include Sec. 125 contributions?

Individuals who work for two unrelated companies during a year get two 415 limits, or up to the lesser of 25% of pay or $60,000.

Three shareholder doctors in Service Corp A and three sharholder doctors in Service B (unrelated) dissolve their corporations as of 2/28 and form Service Corporation C effective 3/1, with the six identical shareholder doctors. Can they exceed the $30,000 415 limit based on comp in the two companies, or are Corps A, B and C considered related?

Since 403(B) plans are not subject to being top-heavy, can I safely conclude that 403(B) plan balances are not used in determining whether or not other DC plans of the employer are top-heavy?

How does one go about setting up a Section 125 Plan???

The EEOC recently sent a client a request for voluminous and detailed information related to the client's cash balance plan. Has anyone else received a similar request? If so, have you been willing to voluntarily produce all of the requested information, or have you drawn the line somewhere? Any thoughts or suggestions would be appreciated.

Participant elected to not participate in the 401(k) plan yet contributions were deducted from his paycheck. This occured in 1999.

I would recommend that the excess contributions plus earnings be distributed back to the participant in the form of a refund with a 1099-R issued for 2000. Can this be done any other way?

A nonqualified plan has two distribution options upon retirement or separation from service: annuity payments and a lump sum. When is the latest that a participant may make an election for the annuity without violating the constructive receipt rules?

Facts: Bank holding company has four separate banks as subsidiaries in four locations in two states. The insurance benefit plans are all fully insured.

Each bank and the holding company offer employer sponsored health, LTD, life, and dental plans to employees. Currently, each bank and the holding company has offered different plans to it's employees.

The holding company has been told ERISA requires all banks under the holding company to offer the same benefit plans.

Can anyone give me verification or refute this advice and a place to go for back up?

Thanks for any information.

Facts: Doctor Group "X" has three valuable and talented management level employees. Other doctor groups realize the value of these employees and would like to utilize their management services as well. Idea is to form a new corp. "A" that would be owned 50/50 by Doctor Group "X" and another unrelated Doctor Group "Y". The three employees would move to A and would perform management services to X and Y on an ongoing basis. (Physically, the employees would remain where they have been). The employees will also perform these services for other doctor groups on both on-going and short-term basis.

Lots of issues.

"A" does not really want to set up its own retirement plans unless it has to.

First, A may be a management service organization with respect to both X and/or Y such that A's employees could participate in either of X or Y's retirement plans. Any thoughts on whether it would constitute an MSO when performing these services for other companies as well?

Second, the employees (after performing these services for one year) could be considered leased employees if the work is done on a substantially full-time basis. Can you be a leased employee of more than one company? I assume not (ie, that you can't be working substantially full time for more than one company).

Third, it could be that they are really independent contractors performing management services to various companies such that A would need its own retirement plan.

I realize that this is very facts and circumstances oriented and that there are no clear answers. I would just like some thoughts on how others may choose to attempt to structure this.

Thanks in advance for any comments.

Do any of your DB Plans reject the request of an alternate payees (AP) for distribution at ERD if the participant is not in pay status? If the ERD distribution is met for the AP, how are the Participant's benefits adjusted once he/she commences benefits? Has anyone amended their plan to offer options to immediately payout APs in a DB Plan pursuant to a QDRO? If so, how does it work?

Can you convert a SIMPLE 401K plan to a Safe Harbor 401k? And if so can it be done this year (2000) even if cnt have been made since 1/1. THis is a calendar year plan. Do they still have until 5/1 to make decision and give notice to ee's then convert the simple to safe harbor and roll the assets over into the safe harbor plan?

I’ve got a client who had involuntary cash-out distributions processed in calendar year (plan year) 1999. Several distributions were mailed to the last known addresses. FIT was submitted to the IRS by the plan’s recordkeeper (a bank). About 20 of these distributions were returned due to bad addresses. This happened after the plan year-end. The bank refuses to offer help to recover the submitted FIT, which the sponsor has now funded back to the plan out of pocket. Has anyone had experience with this? Any suggestions??? The sponsor is working with a major accounting firm currently. Any other ideas?

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if you don't mind taking the time to e-mail me some of the problems with the recent article that appeared by Peter R. Orszag.

This was on the Benefits Link Newsletter dated Mar 3-6. We are trying to compile a list of the problems to forward onto ASPA.

please e-mail me directly with your responses.

for example, the author fails to mention that the maximum contribution has remained at 30,000 since 1983. can't really say that has kept up with inflation, can we?

Following are two sample letters to send to your representative regarding the issue of cross tested plans. One is for business owners, the second is for administrators.

Our office works very closely with ASPA, and this is their suggested letter.

contact me directly and I will e-mail the actual word document to you.

Thanks for your help in this matter!

March 12, 2000

The Honorable _________ Senator_________ The President

U.S. House of Representatives U.S. Senate The White House

Washington, DC 20515 Washington, DC 20510 Washington, DC 20500

Dear Representative (Senator or Mr. President) _____________,

As a small business owner in your district, I am writing to express my outrage with the regulations affecting small business retirement plans currently being considered by the Department of the Treasury. It has taken years to build my small business into a successful enterprise. I am proud of the fact that my small business can afford to provide meaningful retirement benefits to its employees. However, if Treasury issues the regulations being considered, it will no longer be economically feasible to offer a retirement plan for the employees of my small business.

Treasury has a history of interfering with my small business retirement plan. In 1994, Treasury attacked my small business retirement plan with a legislative proposal. Fortunately, Congress rejected that proposal on a bipartisan basis. Now, Treasury is attacking small business retirement plans again. But this time they are trying to go around Congress. These repeated attacks make it even more difficult for my small business to offer a retirement plan to its employees.

I would like to continue to offer substantial retirement benefits to the employees who work for my small business. I hope you take action to stop Treasury from issuing regulations that will leave me with no choice but to terminate my small business retirement plan.

Thank you for helping me to continue to offer retirement benefits to the employees of my small business.

Sincerely,

[small Business Owner(Principal)]

....................

March 12, 2000

The Honorable _________ Senator________ The President

U.S. House of Representatives U.S. Senate The White House

Washington, DC 20515 Washington, DC 20510 Washington, DC 20500

Dear Representative(Senator or Mr. President) _____________,

I am a retirement plan professional in your district that helps small businesses establish and maintain retirement plans for their employees. I am writing to express concern with regulations currently being considered by the Department of the Treasury. If Treasury issues these regulations, many small businesses in your district will terminate their retirement plans for their employees.

Small business employees already have few opportunities to save adequately for retirement. Presently, only 20 percent of small business employees are covered by a retirement plan. This coverage gap is significant given that small business now employs over half of the nation’s private workforce.

Treasury just announced that it is reviewing its nondiscrimination regulations and their application to “cross-testing” and “new comparability” methodologies. Since 1981, Treasury guidance has permitted qualified plans to satisfy nondiscrimination regulations by allowing these testing methodologies which compare the real value of contributions to a defined contribution plan at retirement taking into account the ages of the participants.

In 1994, Treasury tried legislatively to repeal these methods. Fortunately, Congress rejected Treasury’s proposal on a bipartisan basis. Now Treasury is trying to accomplish by regulation what it could not achieve legislatively.

Given the pressing need to expand small business retirement plan coverage, and the great complexity of this issue, great care must be taken to ensure that action by Treasury does not result in small business plan terminations. However, the notice issued by Treasury suggests that they will dramatically change the regulations affecting small business retirement plans. In fact, the approach suggested in the notice would clearly discriminate against small businesses merely because they have a small number of employees.

I am asking you to stop Treasury from taking action on this issue. Many of these plans legitimately rely on “cross-tested” or “new comparability” plan designs, which have been permitted since 1981. Now, without any previous indication, Treasury has issued a notice indicating they are seriously considering changes to these rules and asking for comments in 75 days. If they rush to propose new regulations in this area, it could potentially lead small businesses to terminate their retirement plans leaving their employees with no retirement plan coverage.

Thank you for helping small businesses to offer retirement benefits to their employees.

Sincerely,

[This message has been edited by Tom Poje (edited 03-09-2000).]

Our county mental health was recently dissolved from co. dept to an Authority. As a new Govt entity we can opt out of Soc.Sec. (except Medicare portion) if we have a Qualified Retirement Plan. Our current plan is a EE 457 and ER 401(a) match up to 5% of what EE contributes. Plan is optional, but over 70% of employees contribute 5% and get 5% match. First, does our plan "qualify"; and secondly, is there a minimum EE and/or ER contribution percentage requirement to be out of Soc. Sec. I've heard 7.5% minimum. Where does that come from? Can that be a combination of EE and ER?

We've just been notified by our client that their 401(k) plan is to be audited in April. It's our first audit and we don't want to miss any important steps in preparing for it. We're told it will focus on distributions and loans for the '98 pye. If anyone can assist with tips, suggested reading, etc. I'd greatly appreciate it!

I converted a traditional IRA to a Roth IRA in 1998. For 1999, i made contributions of $1350. Now, in doing my taxes for 1999, it looks like i am $70 over my contribution amount as my income came up to almost $110,000. Do i recharachterize this amount, or say it will count for next year's contribution?