I cannot locate a refernce that discusses the Scheudule C or SSA. Part I and Part III of Schedule A tie to question 25 of the 5500 and this 5500 Questions is not answered for a 403(B) plan. Part II deals with trustees and 403(B) plans are non-trusteed. Thus it seems that the Schedule C is not needed. Is this true? Is there an IRS or DOL reference on this topic?

Alas, it seems that that the SSA would still be required. Does anyone have a reference that states SSA's do not apply to 403(B) plans.

When do the affiliated service group rules (414(m)(2))come into play when you are dealing with service organizations such as law firms? We have a situation where law firm A is opening a new law firm B; ownership in B is 50% by firm A, 25% by unrelated individual, 25% unrelated individual. The firms will not refer business to each other. I thought there would be no affiliated service group issue, but an example on some materials I have makes me question that since there is ownership between the two.

this is a nongovernmental plan, do they have to file form 5500? I know governmental 457 plans are exempt, what about nongovernmental?

I love these message boards as I think that they provide a useful interchange of information. However, for the second time I have been told, essentially to research the topic myself!!

I have thoroughly searched all old messages, benefits link itself and the IRS through BNA, CCH, etc.

Is anyone familiar with the current IRS position on orphan plans--plans with no sponsor. In 1985 the IRS indicated that they might be issuing some TAM's on this issue. Did they?? Anyone have a cite??

Thanks--and excuse my frustration!!!

A client posed an unusual problem. He contributed $2,000 to his $7,700 traditional IRA in January, 1998. In November, 1998 he converted the entire account to a Roth. No election to recharacterize the contribution was made before the transfer. The broker sent him a 1099 showing the entire account balance as a distribution. He thinks he can deduct the original contribution to the traditional IRA and then pick up what the broker showed on the 1099 over 4 years.

I would have thought that he would not take the contribution into income under Section 408A(d)(6)(a) and that the broker's 1099 was wrong, but then there was no election to recharacterize. To get the deduction I would have him elect to recharacterize the contribution as one to his traditional IRA by the time he files his return (I put him on extension).

He (retired lawyer) suggests that 408(d)(6)(B)(2) implies that he could deduct it.

Any thoughts on how this should shake out?

------------------

As a new subscriber to BenefitsLink, I am interested in knowing if there are any working or ad hoc groups of HR/Benefit professionals that have an interest in and regularly discuss issues relating to Integrated Disability and Absence Management. In paticular, are any members migrating to the full integration of WC, STD and LTD benefits and what "best practices" and benchmark standards have you set for your organization. Lastly, what other internet based resources might you recommend that I explore. Thank you.

------------------

Robert J. Ayers

Regional Director

Integrated Disability and Absence Management

GatesMcDonald

800-423-1846, ext. 3581

Is anyone familiar with the current IRS position regarding plans with no sponsor, sometimes referred to as orphan plans?

In order to be a participant in the plan, an employee does not have to contribute to the Plan, UNLESS his/her job classification is covered by a collective bargaining agreement between the Plan Sponsor and one of the unions that represents some of the participants.

The reason I ask is that our client wants to offer an early retirement window benefit, but Treas. Reg. 1.401(a)(4)-3(B)(2)(iv) states "no employee contributions. The plan must not be a contributory DB plan." Does the fact that some of the participants "contribute" to the plan due to a collective bargaining agreement cause the plan to be a contributory defined benefit plan? I have tried to find a definition of contributory defined benefit plan, but have been unsuccessful.

I would appreciate anyone's guidence.

If I gift stock to my church can I purchase the same amount back & receive a step up in my basis, or do I have to wait 31 days (wash rules) to purchase it ? Thanks !

If I remember correctly, there are ERISA rules surrounding how many days an employer has to respond to a participant's request for a benefit calculation, an SPD, or a plan document.

Can anyone point me to where I could find the details on these timing requirements?

Q&A-6 states that in an asset sale, "the sale" is the qualifying event. What if the employee doesn't actually terminate employment until later? The buyer is buying the operating assets and hiring the employees at these locations. Some headquarters employees will continue to be employed by the seller for several months to wind things up. The seller has terminated its health plan, and the HQ employees are claiming that buyer must offer COBRA to them as of the date of the sale, even though they have not terminated employment yet. The statute says that "termination" is the qualifying events. Are the regs just sloppy language? Any thoughts?

Is it true that religious non-profits can "noncomply" with IRS regs on for example, a defined benefit plan, with impunity. Or, can they be brought to the DOL like any other for-profit for noncompliance??

Participant X died w/ $1,000 plan loan outstanding. X's account ($10,000 including the $1,000 loan) distributes equally to two beneficiaries. Should the 1099R to each bene be (A) for $5,000 or (B) for $4,500 w/ a third 1099 for $1,000 going to deceased taxpayer/estate?? Thanks

I know that the Simple 401(k) plans do not have to worry about the ADP/ACP testing, however what tests DO they need to worry about? I know that the Section 415 limits apply and I think that the 410(B) test applies ... any others?

Can I "borrow" my original investment amount from my Roth IRA? If so, do I have to replace it within a certain time frame?

Can anyone tell me where to fine the results of the 1997 and 1998 US Chamber of Commerce benefits survey? This survey shows each benefits item as a percentage of payroll. Thanks for any assistance anyone can provide.

After considerable analysis, my wife and I decided that conversion of a sizable portion of our IRA holdings to a Roth IRA made sense -- the thought of tax free distributions seemed to dance through our heads. Around the time of our conversion, however, I started doing some reading, and having conversations with others, about the various alternative "income tax" systems (e.g., flat tax, national sales tax, VAT, etc.) being considered as a replacement to our current mess.

Without getting into all of the pros and cons of each alternative, let me say that the National Sales Tax (NST)intrigued me because as a tax on consumption, instead of income, it should go a long way toward capturing the current lost taxes on unreported legal, and illegal, activity. I believe that this unreported activity is easily 25% - 33% of what is reported today, and therefore if "collected" would lower the tax burden for the rest of us who pay taxes on everything we earn (assuming overall tax revenues collected remain the same).

The problem with this NST is that my dollars being distributed from a "tax free" Roth IRA look and spend just like any other dollars, and as such will be taxed via the NST when I go out to buy a car, or a shirt, or a Coke. I have not heard or read of anyone to date raising the issue that I have raised here, and I would like comments or ideas as to how you might see this being handled (perhaps someone is aware of something in the Roth legislation that covers this possibility). I'm not trying to be cynical here, and I don't give a very high probability to a NST replacing the current income tax, but I certainly don't want to find myself contributing to the "tax bag" with my Roth distributions.

------------------

If the employer wants to be able to vary the contribution percentage why not just put in a profit sharing plan?

Can someone give a simple example of the advantages of funding employee (current, not terminated employee) life insurance through a 419A(f)(6) plan than through any other method?

How often must a 401(k) participant be allowed to change the amount of (or discontinue) their deferrals? If a plan is only valued once a year and has only one entry date (first day of plan year nearest completion of requirements), can the plan only allow participants to change their elections or discontinue deferring as of the first day of the plan year?

------------------

Michael Spaid