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.)

Any help with this question:

1. List 4 reasons why it is difficult to determine if a vertical partial termination has occurred.

2. Why might two practioners come to different conclusions concerning whether there has been a horizontal partial termination?

3. Identify the procedure that a plan sponsor can take to be assured about whether or not a partial plan terminattion as occurred.

Any help with this test question:

Compare a cash balance plan with a traditional DB plan with respect to the following:

A. Calculation of accrued benefits.

B. Earnings on plan assets.

C. Actuarial funding.

D. PBGC coverage.

You must also describe the concept of "definitely determinable benefits" when applied to cash balance plans.

Help!! Beginning attorney with the responsibility of updating and amending plan documents. Any suggestions on where to find information (books, websites, seminars, etc.) concerning the entire process (i.e. what do I do?)My firm sponsors a regional prortype but no seminar or training has been announced yet.

[This message has been edited by DennisT (edited 05-19-99).]

I have converted two IRAs to Roth IRAs, each at a different financial institution. One IRA was a traditional contributory IRA with both qualified and non-qualified contribtions. The other IRA was an ESOP (employee stock ownership distribution). I have transferred the ESOP Roth to the other financial institution and combined it with the other Roth.

Will there be any IRS complications from having combined these two different types of Roth conversions? The institution where I have combined them (Charles Schwab) said this was OK to do.

Thank you.

What typically are the benefits of a Church Plan?

What specific types of programs are you refering to - Dependent Care Assitance? Adoption Assistance?

Recently, my previous employer was acquired by another company. COBRA continuees were not notified of the plan conversion and some received an invoice in the mail charging almost 3 times more than the previous plan charged, this is how they found out that the plan was changing.

Can you help me identify the rights COBRA continuees have in this scenario? Thank you.

[This message has been edited by VFernandez (edited 05-19-99).]

may a participant make a distribution from his 401k plan after he reaches normal retirement age but is still working?

what if the plan doesn't allow for pre-retirement distributions (normally 59 1/2)?

The plan sponsor of a DB plan that currently only covers the sole prop owner wants to transfer a mutual fund into the plan in order to satisfy the minimum funding requirements for 1998. Is this a prohibited transaction as laid out in the Supreme Court ruling of IRS v. Keystone. This case involved truck terminals and property in Key West. This mutual fund is highly liquid. To me this transfer of the mutual fund would be a prohibited transaction as described in PWBA Interpretive Bulletin 94-3. I cannot believe that I have never encountered this situation before.

Is there any federal law which requires that maternity benefits be included in a group health plan?

I am new to this area so forgive me for asking fundamental questions but...under ERISA, what is the definition of a trustee? Under a self-funded plan, is the trustee always the employer? or the plan administrator? or both? Can a trustee be something or someone else than these two entities?

I would be greatly appreciative if a citation could be provided.

Our 401k plan includes a company stock fund. In voting the shares, the plan document specifies that the trustee will vote the share in accordance with participant instructions. The plan document is silent on what is to be done for shares of stock where no voting instructions have been provided. Is there a problem with instructing the trustee to vote these remaining shares proportionally in accordance with the instructions received? Should the shares be unvoted?

Has anyone seen a sample 401(a) that is written specifically as a governmental plan without all the ERISA language? I have the list of what is applicable and what is not, but it would be nice to see it all in one document.

Client has assets as follows:

IRA 1,000,000

House 400,000

Lots, cash 200,000

Total Assets $ 1,600,000

This is a married couple, community property. When the first spouse dies, which assets would you put into the Bypass trust?

If it is the house, the opportunity to not pay income tax on gain at sale is lost.

If it is the IRA - I didn't think the IRA could be put into a trust because it was already a trust. Wrong? And if the trust is named as beneficiary what are the consequences?

How would you fund this bypass trust? Or what steps would you take now to insure that it could be funded properly when the time comes?

Appreciate any comments.

This may be more of an administrative question than a Quantech question, but who better to answer than Quantech users.

In an ANNUAL money purchase plan, an employer makes a quarterly contribution for eligible payroll. The plan has a provision that you must be employed on the last day of the plan year in order to receive a contribution. The employer contributes all year for employees that are not employed on the last day of the plan year and is not allocated a contribution. What happens to those monies? Do they just appear on the plan's financials as over-contributions? Are they returned to the employer? Do most employers keep track and not contribute for those? Is the Quantech "Suspense" account utilized for these types monies. Should these monies be included in the allocation of interest?

If EAP benefits are considered medical benefits, are they portable? Have smaller employers been receptive to this portability (from job to job and from job to home)? How are EAP "benefits" funded when they are subject to COBRA?