I am doing some planning for my daughter's college expenses and have done some research on using Roth's after we deplete the Education IRA. According to the IRS, this is permissible for qualified expenses, but Publication 590 does not seem to distinguish between which "buckets" of money can be used tax-free.

I read an article in Kiplinger's, however, that says that only the amount contributed to the Roth can be withdrawn tax-free for qualified education expenses; any earnings withdrawn, while not penalized, are subject to taxes.

Is this correct? I have not been able to find this distinction at the IRS website.

Thank you in advance for any answers.

Tim Lovelock

PS: I am confortable with my existing retirement planning and I'm planning to use the Roth as a combination "college fund/addt'l retirement" account.

We have a takeover that the prior TPA missed that the plan was top heavy in 1995 and 1997.

When I calculate the earnings on the 1995 TH minimum contribution, at what date do I start the earnings? Do I use the latest date that the contribution could have been deposited for deductibility purposes?

Do I include the earnings in the 404 limit?

Are employee contributions to a governmental plan that are picked up within the meaning of IRC Section 414(h)(2) by the employer subject to FICA withholding?

Are all RX eligible for reimbursement thought the medical reimbursement plan? I understand weight loss programs are not, but what about weight loss Rx, Meridia? Is there a list of specific Rx that are eligible? Thank you

Has anyone ever seen a 423 stock purchase plan with a match (e.g., for every 2 shares purchased by the employee, the company would

contribute an additional 1 share). Arguably, the 2 shares could be treated under 423, while the additional share would be treated under section 83. The concern is that the employee would be viewed as having purchased the additional share along with the other 2 shares, thus resulting a violation of the 85% requirement. Any thoughts?

If a 403(B) plan is subject to ERISA, and it adds another vendor under 403(B)(7), is a new plan document required? The plan itself has not changed. I don't think we do, but the third party administrator who would produce quarterly statements says we do. I have looked in ERISA, the CFR, and various places on Benefits Link, but am unable to document my opinion that a new document is not required. Can someone help explain this to me and give me a cite if possible? Thanks.

You can e-mail me directly at

westenberg@nwf.org

Thanks

What are major implications of using short plan vs. "full plan year" during initial plan year? Example: Calendar Year Plan adopted 6/3/99. If first Plan Year starts 1/1/99 vs. 6/3/99, what are major implications and potential pitfalls?

Does anyone know if Social Security, Federal, State and unemployment withholding contributions should be/can be taken into consideration when employees are "acquired" through a company acquistion? (assest, stock or cash)?

Does anyone know if Social Security, Federal, State and unemployment withholding contributions should be/can be taken into consideration when employees are "acquired" through a company acquistion? (assest, stock or cash)?

What is the purpose of Q 7(i) on the Form 5500 and the Form SSA reporting? If a DC plan immediately vests participants, how is this related to a deferred vested benefit?

I have been trying to find information and/or the best way to extend a benefit to our employees.

We were thinking of adding vision care to our health plan but thought that a better way to give a benefit to all of our employees rather than just those with vision care needs, is to give each employee X amount of dollars per year that can be used towards vision care, health club memeberships etc.

I have spoken to my Flexible Spending Administrator without success.

Does anyone have a similar benefit set up and if so, how does it work?

Thanks in advance for any help you can give me!!

Where can I find a list showing how states treat non-ERISA 403(B) assets in a bankruptcy?

We have several former US employees with 401(k) balances now employeed by non-US subsidiaries (not on temp US assignment). As they are members of the controlled group we consider them participants. As they have no US income they can not contribute to the plan. Does anyone else have this issue and how do you collect payment?

PEP plans are hybrid plans. What general rules apply to withdrawals and distributions for tax purposes? (i.e. pre-59 1/2 withdrawal)

An employer has made an error in calculating and contributing to the profit sharing accounts of some participants in the 401(k) plan. The plan clearly states in the contribution/allocation formula that no amount shall be contributed in excess of the 415 limits. However, the employer was unaware of what the 415 limits were for these individuals and made the contributions to each participant's account. Upon performing the 415 test, the improper contributions were discovered and pulled out of the participants' accounts. The employer subsequently used these amounts as an offset to the next pay periods salary deferral and matching contributions. A spirited discussion has developed regarding the treatment of these erroneous contributions. Any imput or comments as to the various positions taken would be greatly appreciated.

Here are some of the positions taken so far:

1. The contributions in excess of the 415 limits are excess annual additions and have to be treated as such under the correction method stated in the plan document. The document doesn't say that salary deferrals will be refunded. It says that the excess annual additions will be used to offset future employer contributions to the plan. The person advancing this position claims that the use of such amounts to offset salary deferrals is a prohibited transaction since the offset amount exceeded the total amount of matching contributions that were submitted (ie, this was an improper loan to the employer).

Any thoughts on this matter?

2. The erroneous contributions are NOT excess annual additions because the plan's contribuiton/allocation provision specifically prohibits a contribution in excess of such amounts. Therefore, any contribution over the 415 limit for an individual is a contribution in error that must be corrected (but it isn't an excess annual addition). The money pulled out of participants' accounts in this regard can be used for any legitimate plan purpose, including the payment of salary deferrals, since this is a pre-funded unallocated employer contribution.

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Can someone remind me when it is required to choose your testing method for ADP & ACP testing purposes versus being able to use the "better of" current year or prior year numbers?

Does anyone have experience with crediting of service with a foreign affiliate for purposes of determining credited service under a DB plan with a benefit offset for benefits under the foreign plan attributable to the same period for which service is credited under US Plan?

See Reg. 1.401(a)(4)-11(d)

See Reg. 1.401(a)(4)-3(f)(9).

E.g. how did you handle the exchange rate issue?

Any examples of plan language?

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I know that there are IRS regulations regarding the 401k plans that an employer must offer to related or "sister" companies. Are there similar regulations issued by the Dept of Labor that require an employer who owns more than one company (that are related or are "sister" companies)

to offer the same benefits in each of these companies? Thanks.

Does anyone know of a survey or have general knowledge about the typical length of time from when an employee gets paid to when the 401(k) deferral is actually invested. We administer our own plan of approximately 3200 deferring employees with 11 different pay cycles per month. Have only missed investing on actual pay day 4 times this year and upper management is upset. Would like some ammunition.

Would there be any difference in treatment for retirement benefit purposes between a QDOT for a non-citizen spouse and any other form of marital trust being the Participant's Designated Beneficiary? I assume there is not and that the calculation of required minimum distributions, other payouts and options (including spousal rollover) would be done under the normal rules applying to benefits payable to trusts. Does anyone else have a take on this.

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