A strange question was posed to me. Here are the facts:

Decedent prior to death received a distribution from an IRA. Decedent stated intention to "roll over" the amount to a new IRA. The decedent completed all forms for rollover (including beneficiary papers)and was about to fund new IRA when he died unexpectedly. He died prior to the completion of the 60 day period. Can the estate fund the new IRA based on the intent if done prior to completion of the 60 days?

I need a colleague who has been through the wringer on a proxy solicitation to provide me with some rough solicitation documents for a Trustee to solicit voting instructions on a fundamental corporate transaction-merger.

Any help would be appreciated.

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Michael D. Hughes

412-392-5590

Company would like to have the plan pay the cost of a vendor search (being done by an outside consultant). Is that permissable?

Also, does company have any flexibility to spread the recognition of the expense over a period of time rather than take the entire hit at the point in time when the bill arrives?

A Participant receives a hardship distribution in mid-1998. The employer fails to suspend the participant's deferrals. The error is discovered in 1999. What would the appropriate correction method be and how would it be reported to the participant. Additionally, the 1998 deferrals had match credited for 12/31/98.

Other than altering the SPDs and 5500 are there other areas that should be addressed to update a welfare plan name? We have medical plan, part insurance - part self-funded, that's been reported on 5500 for years under a plan name that incorporates a prior insurer's name. HR doesn't want to send SARs to employees because of name.

What is the annuity starting date in following situation under the following facts??

1. Corporation dissolved on date X;

2. Corporation X froze PSP and MPPP prior to dissolving;

3. Prior to freeze the two participants executed waivers (with spousal consents) of the QPSA with respect to MPPP;

4. 5500's have been filed annually since the freeze and the plan documents have been kept in compliance;

5. Participants elected to not take distributions from the plans;

6. Request for Determination Letter filed with respect to termination of both plans as of 4/1/99;

7. Both participants have been taking required minimum distributions.

The issue is that the IRS Specialist reviewing the 5310's wants to know if the spousal consent requirements of 401(a)(11) have been met. 417(f)(2)(A)(i) defines "annuity starting date" as "the first day of the first period for which an amount is payable as an annuity." My initial thought is that the "annuity starting date" has not rolled around yet. The participants have not consented to nor directed that their account balances be distributed. It would appear that the QJSA notice/waiver/consent forms would need to be provided within the appropriate time period before the date of distribution of the assets on termination.

Has the plan administrator missed the boat on failing to provide QJSA notice/waiver/consent forms earlier, or has the annuity starting date not yet arrived???

Any comments/suggestions appreciated...

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I'm researching what is being offered to staff who are paid on a commission basis only.

What benefits are provided? Who pays? How are the benefits that are based on salry handled and coverage amounts? Risks?

If the plan document states a 60 day close-out that is the close-out for the plan and it can only be change for future plan years, not retroactively. A retroactive adjustment would disallow the entire plan, since it would be adjusting the Plan to accomidate one individual so they did not lose their allocation, this violates the "Use it or Lose it" rule.

Looking forward, it seems that the plan close-out period should be reconsidered, 90-days is more common. Also whatever employee notification system is currently being utilized is obviously not working.

Is a Roth IRA owned by an individual subject to probate and federal estate tax on death of the owner? If yes, how can these be avoided?

I understand how the employee contribution of health insurance premiums is pre-taxed under a cafeteria plan. What about the employer's paid portion? Can the employer have the employee pay the premium & reimburse the employee on a pre-tax basis?

It is my understanding that fiduciary liability for Y2K problems applies to ERISA plans. Is there a counterpart which subjects government plans to Y2K fiduciary liability? Thanks!

In regards to both employer & employee contributions to a 403(B) plan when must the payments be made. The fiscal year of the company is calendar. Employees do have monies withheld to be deposited into the plan on a semi-monthly basis.

OK - crunch time. I need an explanation with question #13 from 06/04/98 test.

Question:

What is the maximum deductible contribution on behalf of the sole proprietor for 1997 (rounded)?

- calendar year money purchase

- 10% contribution

- sole proprietor's earned income before any deduction for contributions and self employment tax is $150,000

- eligible compensation for employees - $47,360

-self employment tax is $12,000

Answer - $12,660

HELP!!

A Roth IRA is used to fund a credit shelter trust. Distributions are made from the Roth IRA to the trust. The financial institution issues a 1099-R, noting it is a Roth IRA. The distribution is not taxable since it is a Roth IRA. When the trust distributes the money to trust beneficiaries and issues a Schedule K-1 (Form 1041), is the distribution to the trust beneficiary taxable? Is this taxable or nontaxable status noted on the K-1?

If an Employer uses a nonstandardized 401(k) document (and also has an ESOP),

and chooses the Election Not to Participate option, can they include this option on their deferral election

form? Example: "Pursuant to Section 2.08 of the ABC Co., Inc., 401(k) Plan document, I do not wish to participate for the Plan year ending 12-31-99." Any

foreseeable repercussions?

We're debating whether to count earnings on rollovers for top heavy purposes. Arguments on both sides; regs allowing exclusion of rollovers from TH test don't mention earnings.

Any comments?

We're debating whether you count earnings on rollovers for top heavy purposes. The regs that allow exclusion of rollovers don't mention earnings on them. And with today's market, some rollovers throw off LOTS of earnings each year.

We have people on both sides. Comments?

I've done my homework and it's obvious what happens if you convert a traditional IRA to a Roth - then realize later that you're not eligible (recharacterize back to traditional).

But what if I open a Roth IRA, contribute $2,000 and then later find out that I do not qualify. Can I just cash out the contribution and gains - and pay taxes on the gains ??

Thanx in advance - Kingman

If a governmental defined benefit plan is terminating and wants to pay lump sums, are they subject to the 417(e) rates or can they pay at any reasonable rate?

Calendar year profit sharing plan. All employees are terminated toward the end of 1998. Business has filed for bankruptcy.

Profit sharing plan will terminate in June 1999, and file with IRS for determination. Client would like to hold off on distributing benefits until end of 1999, when favorable IRS determination letter is expected to be received.

Problem -- plan provides that benefits are paid at the end of the plan year in which the employee terminates employment. In practice, benefits have been paid early in the following year (between March and May), when the asset results are known and the allocation is performed.

Can the plan sponsor choose to delay payments until IRS determination letter is received?

(If all employees elect to receive their benefits now and are paid their benefits now, there would be no assets or participants included in the determination letter filing.)