Our TPA cut checks to 2 participants in 12/98 for their 1998 MRD's. They never got the check or a 1099 so did not consider it when filing 98 taxes. (The distributions were small, $50-100 range.)

This is just coming to light now and our plan has cut replacement checks and recommends that the participants consult a tax advisor re: refiling 98 tax returns.

Our participants are livid, they don't want to refile taxes for money they never received and had no way of knowing to expect.

Our attorney advises us that even though the checks were cut in 98 if the participants never got the money it's too late to count it as 98 income and that the 1998 1099 should be reversed and issued for 1999. Our pension company says this will put the participant at risk for not receiving a MRD when required. Help.

Does anyone have experience with ADP or Trustar as TPA's for defined contribution plans? Your opinion is appreciated.

I am confused as to how a QTIP works. I have a married client-both she and her husbnd have children from a former marriage and no children of their own-who is the participating spouse of an IRA. We are in CA, so the husband has a community property interest in the IRA. They would like the IRA to ultimately be distributed 1/3 to his kids and 2/3 to her kids. I understand that the only way to do this is through a QTIP trust, because otherwise the surviving beneficiary is free to change the beneficiary desination after the death of the first spouse.

If I make the QTIP trust the beneiciary of the iRA, then if the wife dies first, the IRA goes into the trust, pays out all income to the husband for his life, and then goes to the children as agreed.

Question 1: At the wife's death, does all of the IRA go into the QTIP, or just her interest?

Question 2: What happens if the husband predeceases the wife? She is still the record owner of the account. Does any interest pass into trust, or does she keep the account in her name? If so, couldn't she still change the beneficiary designation after his death (providing he died before the RBD)?

Get in touch with a large no-load mutual fund group. Tell them your story. They will send you the paperwork to effectuate a Direct Rollover of your former 401(k) account to an IRA. I suggest an S&P 500 index fund. ROLL THE MONEY OVER FIRST TO A TRADITIONAL IRA AND THEN TO A ROTH IRA. DO THIS AN YOU WILL BE AN I WITNESS TO THE MIRACLE OF COMPOUND INTEREST.

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I am ready to start a Roth IRA, but I wonder. Is a Roth set up similar to a 401k plan where you decide to invest funds? If so, do you recomend a great place to open the Roth where you have the greatest range of choice, return, and access? Thanks.

We use Quantech for DC administration and Pentabs for DB.

What software is available for aggregating a DB and DC plan for the general test? I could add the EBAR from the DC plan to the normalized benefit from the DB plan in an Excel spreadsheet, but imputing permitted disparity is the problem.

Is there software for doing this?

Can anyone guide me to any information on issues to beware of concerning 401(k)plans when a company with a k plan buys another company with a k plan?

Is a plan administrator free to change carriers or to change from an PPO to an HMO pursuant to his or her discretion?

I've got an S-Corp as a client. They want to adopt a "premium only" cafeteria plan. I understand that 2%+ shareholders are treated the same as sole proprietors and partners (i.e., they can't benefit from tax-free treatment for medical insurance, and a cafeteria plan won't help to make the cost of coverage tax-free).

I've heard it said, however, that if the spouse of an owner is a legitimate employee, then the spouse can buy coverage tax-free through a cafeteria plan, because the spouse is not an owner-employee.

This seems too easy. Shouldn't the spouse be treated as an owner, as a result of the attribution of ownership rules under code section 318? (e.g., spouses are always treated as key employees as a result of 318.)

RIA's research service seems to confirm my reading. Has anyone heard of this back door approach? Have you seen any thing published by IRS that would support this approach?

Has anyone seen the actual IRS memo (a request for technical advice) which has been all over the press recently? I have been trying to find a copy of the memo but have been unsucessful.

An employer wants to have a 401(k) plan that meets the profit sharing safe-harbor, but wants to exclude part-time employees. Is it permissible under Notice 98-52 to have a one year 1,000 hour requirement for part-time employees but a 3 month requirement for "regular employees? I am not aware of any prohibition but would like confirmation if possible.

Based on my conversations with support on Friday, the new 5.0 disks will be mailed shortly. (I assume this will be true unless something else is discovered in testing)

Currently (at 5.0), if you code someone "Term and fully paid out" the system will treat him as 0 vested. This was a change from previous logic. Supposedly they will go back to the old logic, and retain vesting on such employees. That is good news for those of us who run distributions followed by forfeitures on annual plans. I was not clear if this will be on the new 5.0 disks, or if it will be a later 'fix'.

I work as a recruiter for a staffing company, and I'm trying to find some information for one of my clients on the average employee contributions for medical, dental and vision benefits? Also what is the average amount of sick and vacation pay/days offered in the first year of employment? Ideally this information would be most beneficial if it was derived from the following demographic information; Chicagoland area, and manufacturing industry/ 5-20 million in sales,and employees around 50-200. Thank-you this has been difficult information to find.

Can an employer require employees to pay for benefits while on FMLA (paid or unpaid)?

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RJ

A Roth is similar to a traditional IRA in that it is a way to set aside the lesser of $2,000 or your earned income per year for your retirement. Both accounts offer certain tax advantages and both offer certain penalties for accessing the money before retirement. In order to contribute to either a Roth or a traditional IRA, you must have earned income. There are additional restrictions on contributions to Roth IRAs if your income is too high.

The general benefit of a traditional IRA is that the contributions are often tax deductible when made. You then pay taxes on the money when you withdraw it. (The theory was always that you would be in a lower tax bracket when you retire than you are when you are working.)

The benefit of a Roth IRA is that, although you don't get a tax benefit when you contribute, if you follow the rules and allow the money to stay in the IRA and grow, you pay no taxes on the money when it comes out. No taxes on any of the capital gains, dividends, earnings, interest, etc... AS LONG AS YOU FOLLOW THE RULES!!!!

The IRS puts out a pulication 590 which you can download from www.irs.ustreas.gov. There is also a web site dedicated to Roth info. I think it's just www.rothira.com[/url. Any mutual fund group, broker or bank can provide you with more information if you need.

Welcome to the world of saving and investing!

[This message has been edited by Kathy (edited 09-07-1999).]

[This message has been edited by Kathy (edited 09-07-1999).]

Health care coalitions are playing more of a role throughout the country in helping to reform the health care systems in their geographical region. As the coalition movement evolves and expands, it is important to better understand what coalitions are all about, how they are structured, what they have accomplished, who their members are, and how they might benefit you as an employee or employer. To this end, we dedicate the Health Care Coalition message board to serve as a means to provide information, encourage dialogue, and answer questions related to this important movement.

Jerry Custer (Jerry99)

Heartland Healthcare Coalition

Have run across an old ('70's) Welfare plan that includes lifetime grouplife insurance death benefits, with premiums paid from VEBA assets. Does anyone know where the law or regs on this Sec. 79 program can be found? The employer is a public school district.

A client's attorney asked an interesting question. "Are there any downside issues related to the use of ERISA prototype plans relative to local government and public school employers?"

The question relates to a case which we are mutually reviewing which requires the public agency to sign a fully ERISA qualified document, including top heavy tests, etc. The plan is an insurance company defined benefit "window" plan used as an incentive to retire older employees. If anyone has seen a case where a downside of any nature, please respond.

I am retired and do not earned income from a job. I do sell some cows and have income from this that I pay taxes on. Can I contribute this income to a ROTH IRA?

A new comp plan has the following classes:

Class A - Owners

Class B - Non-owner division X employees

Class C - Non-owner division Y employees

Class D - Non-owner division Z employees

If the plan fails the ADP/ACP and the employer wants to contribute QNEC to correct, can the document be worded to allow different QNEC contributions to different classes.

Example:

Class B - 2% QNEC

Class C - 1% QNEC

Class D - 0% QNEC

If this is OK, would the document (volume submitter) wording be something like this: The Employer Qualified Non-Elective Contribution used to satisfy the Actual Deferral Percentage tests will be separately determined for each of the classifications of Participants.