How long does it take for a retiree to receive their first check (lump sum or annuity) after their retirement date in your plan. We are currently involved in a dispute with the company over this issue and comparative data will help our case. We are a union representing the pilot group.

Thanks.

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Karen L. Browne, C.E.B.S.

Benefits Specialist

Air Line Pilots Association, Int.

In '98 my wife & I rolled over our regular IRAs into a Roth. Line 15b will be approximately $ 30k for four years. We now learn our '98 AGI is $ 102K. In '98 we made a $ 2000 (each of us) Roth contribution. Does the $ 100K maximum for a Roth exclude or include our Roth Conversion income of $ 30K ? If I need to undo this, please advise what is needed. THANKS.

Does the employer have a choice whether or not to contribute in a 401(k) plan, and what are the pros and cons of contributing?

Hi,

I had 2 IRAs in 98, one Contributory IRA and one Rollover IRA which was funded from a 401K plan at an old employer. My contributory IRA had a cost basis from some non deductible as well as deductible contributions but my rollover had no cost basis since it was all pre tax money. I ended up converting all of my Contributory IRA but didn't convert any of my Rollover IRA to a Roth IRA.

On form 8606, it says that I need to include the value of ALL my traditional IRAs. Does that mean that I need to include my rollover as well? If so, then my basis gets spread between the value of the rollover and the value of the new Roth and I can't deduct my entire cost basis from my Roth conversion even though all the non deductible contributions took place in that traditional IRA that was converted to the Roth? Is this the case? Seems a bit unfair to me? Or am I missing something here? Also, that would mean that I would have a cost basis for a rollover IRA which technically shouldn't happen since all of that money came from tax free money in a 401K plan in the first place?

Thanks in advance for the help.

I do not find anywhere nor have I seen in my years of administering the 125K flexible spending account, where both husband and wife employed by the same employer can or cannot be enrolled in both the spending accounts in the same plan year. (health care and dependent care. Would appreciate any comments!

A client would like to spin off a portion of its defined benefit plan and allocate the excess assets entirely to the old plan. The old plan would then cover a group of participants whose benefits are already fully annuitized. The old plan would then be terminated and the annuities distributed. The excess would revert to the employer.

Is there anything wrong with this picture? I know gov't plans aren't subject to the excise tax on reversions, or to the requirements of Code section 414(l). How about the requirement in the Internal Revenue plan termination handbook that the new plan must be fully annuitized in a spin-off/termination? They don't want to do that.

Has anyone had experience with reversions from gov't plans?

Owner and sole participant in a defined benefit plan is 70 1/2 in 1999. Wants to roll his entire account to IRA now and take Minimum required distribution from IRA by 4/1/2000 for both 1999 and 2000. Is this OK or must he take the 1999 distribution prior to rolling to IRA?

Would a requirement that an employee not go to work for the employer's client constitute a substantial risk of forfeiture, for purposes of a nonqualified deferred compensation plan?

This is not technically a non-compete requirement as discussed in section 1.83-3(B)(2) of the regs.

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If an employee is a more than 1% owner and earns more than $150,000, he is a key employee for top heavy purposes. If his wife is also an employee and makes less than $150,000 is she a key employee through the rules of attribution of section 318?

If a C-Corp or LLC taxed as a C-Corp has only one employee (a HCE), can the company set up a Health FSA? While on the surface it seems ok, I remember reading somewhere that since the HCE was getting 100% of the benefits, the plan failed discrimination. Thanks.

Is there any way to get away from annuities as the preferred investment product of 403(B) plans? No serious investor regards annuities as an efficient investment product given everything else that's on the market today.

I'm working in the nonprofit sector and will be contributing to a 403(B) plan.

(1) Can I opt for mutual funds of my own choice at the outset, or do I have to go with my employer's existing choices?

(2) As I don't have an account yet, can I bypass my employer's broker and set up my own account?

Lyric

How does (did) this election work?

It is my understanding that such an election had to have been made prior to 1/1/84. How exactly was it made? A special form on an individual's tax return?

Could someone elect pretty much anything? For example, could someone elect no distributions until age 100? Were there any restrictions.

Thanks for your help.

I work in the nonprofit sector, and I can contribute to a 403(B) but not a 401(k).

(1) Can anybody spell out for me the essential differences between a 403(B) and a 401(k) in terms of both the sources of (and limits to) contributions and the tax implications?

(2) I know that nonprofit employers don't match contributions to 403(B) plans, but that aside, why am I getting the feeling that they are much less efficient than 401(k) plans, offering a very limited choice of investment products (mostly annuities)? What's the rationale for focusing on annuities?

Lyric

A 73-year old owner-employee establishes a profit-sharing plan on 12/31/98 with an effective date of 1/1/98. The initial Plan Year contribution is not made until 3/15/99. What,if any,is the minimum distribution requirement for this owner-employee for 1998?

Thanks for any assistance!

In determining ownership, are shares owned by participants in an ESOP considered? For example, if a company stockholder owns 10% of o/s stock and then is allocated an additional 5% in the ESOP plan, is he considered to own 15%? Do voting rights have any effect on this?

Rev.Rul. 98-1 Q&A7, Step 2, if ret age<62: in general sections 415(B)(2)(E)(i) & (v) require the $ limit is the min of that calculated using plan interest & mortality (or tabular factors) and that calculated using 5% and applicable mortality. 415(B)(2)(E)(i) says to use the greater of plan rate and 5%. Where does 415 mention the calculation usiing plan factors? If the plan interest rate is 7%, it looks to me that this equivalence should be calculated using 7% and the applicable mortality table with not calculations using plan factors. Can anyone clear this up?

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Michael Spaid

I'm looking for the total dollar amount US companies spend annually on tuition reimbursement plans--not company-by-company, but all companies in the country as a whole. An estimate will be fine, as I don't think anyone systematically collects this information. I've checked with the BLS--couldn't find anything on their Web page and my phone message is as yet unanswered (although it hasn't been *that* long!). Any thoughts about sources for this bit of information? Thanks!

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Jim Vaseleck

Is there a deferral limit on contributions to to Health Flexible Spending Account? I know day care is limited to $5,000, but I can find no limit on heath care. Thanks

For health insurance and life insurance, can an employer co-pay at higher levels for the highly compensated group than for the non-highly compensated group? For example, can the employer co-pay 100% of health and life insurance premiums for vice-president and above and 50% for all other employees? What effect does this have on discrimination?

What practical solutions are there for the following situation? Buyer is buying all of the outstanding stock of a corporation, most of which is held in the ESOP. After the closing, the ESOP will hold cash. However, the plan, as required by 409(h), gives participants the right to demand their distributions in the form of employer securities. How can the plan eliminate the right to receive employer securities without violating 411(d)(6)? The new employer does not want to make the one-time offer to demand employer securities on a termination described in 1.411(d)-4, Q&A-2(B)(2)(iii). It just wants to terminate and distribute cash.