I will resign my fulltime employment

position this June in order to return

to school for an MBA. I have a 401k plan with my current company.

(1) Is it possible to roll my 401k

funds over into a Roth IRA?

(2) If yes, is this a good move?

(3) If yes, I am interested in invest-

ing my 401k money into a mutual

fund Roth for high return possibil-

ities over the long-term. Any rec-

ommenations on a good fund company through which to establish my new Roth IRA account?

(4) Should I set up the IRA first with

personal funds? Or should I start

with an initial infusion of funds

directly from my existent 401k?

Which is easier?

(5) Are there any tax consequences from

rolling over from a 401k to a Roth

IRA? Or is it a transparent pro-

cess with no reflection until I

withdraw from my Roth?

An employer is testing the 1998 plan year for the ACP test and would like to consider using part of the elective contributions made to the Plan to pass ACP, as is permitted under 1.401(m)-1(B)(5). The employer uses prior year testing. Is there a way to use elective deferrals under prior year testing? Which deferrals are used for NHCEs? Notice 98-1 only sets forth rules for using QMACs and QNECs.

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GBM

We have a self insured retiree supplemental Medicare plan with approx 200 participants and a paid-up retiree life plan with approx 500 participants. The retirees are in NY. We would like to find a TPA (in NY) to outsource these plans to. Any ideas?

Companies A and B are NOT in the same controlled group (or affiliated service group, etc.) However, there is overlap among these two companies, for historical reasons.

Company A and B each sponsor calendar year pension plans. Management of Company A "administers" both plans. (Don't worry, the named Plan Administrator is the plan sponsor of each plan.)

An employee of B terminated employment and was paid a lump sum -- out of Plan A's assets. Oops! The lump sum represented about 0.01% of Plan A's assets and 1.5% of Plan B's assets. Quite minor.

Now, how to correct? APRSC? VCR? Other? Any time restrictions? (It happened around October 1998; we just discovered it.)

(There is no history of errors or abuses, both plans are properly administered; just "an inadvertent screw-up").

Husband H is a 50% owner of business X. Unrelated person A owns the other 50%. There are several employees.

Wife W is a 100% owner of her own sole proprietorship Y; there are no employees.

X and Y are completely unrelated with no overlap of employees, work, etc.

Both Companies are in California (Community Property State).

Question: Are X and Y within the same controlled group? (i.e., can the wife have a pension plan without affecting or being affected by what plan her husband's business has?)

We have a client that is a publically traded company (NYSE) and has 5,000 employees. We need to find an organization that can provide a complete outsourced solution to a stock purchase plan for employees (not a stock option plan). Ideally the "administrator" of this program could provide participant account information either via the internet or through voice response. Does anyone have the name of a company that does a decent job in this area?

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Bob Jocelyn

Western Pension Service

bjocelyn@westpen.com

We will soon be installing the 5.0 version of Quantech which we understand is still in BETA test mode. Could anyone offer some advise on possible problem areas we should be aware of? Also if anyone has a listing of the enhancements that the 5.0 version offers, that would be great. Any information you have about version 5.0 would be greatly appreciated.

Thank you!

Suzie Thalls

We are new Quantech users, in fact we are still in the installation process. We have a question regarding system upgrades. When you receive a system upgrade, what is your testing process? Do you load the upgrade directly into your production environment? Or do you have a testing region? If you use a testing region, do you have any suggestions how to get around this, as we do not have a separate server for a testing region. Any suggestions you could offer would be greatly appreciated.

Thanks! Suzie Thalls

MultiEmployer Plan with over 300 employer groups. Each Employer forwards payroll information and deferrals on a monthly basis to the recordkeeping company. Who is liable if an individual employer does not send the deferral money in within the required time period? When answering the question on Form 5500 regarding late deposits, is it the "Plan" that is late or the individual employer. Should the plan send delinquency notices to the employers.

I have a first year 401(k) plan that failed it's ADP test. I am preparing to return excess deferral. Employer wants to send 1998 matching contribution.

Is 1998 matching contribution based on actual deferral and subject to excess matching contribution, or is match based on deferral after return of excess? Thanks for any assistance.

I've read the PLRs dealing with situations where an employer may make a restorative payment to a qualified plan. Under certain circumstances such a payment is not considered a contribution subject to 401(a)(4), 404, 415 and other requirements. The PLRs all seem to indicate that a genuine controversy must exist (threat of lawsuit, DOL investigation) What about when a plan sponsor knows of a potential fiduciary breach. May plan sponsor make restorative payment when no participants are aware of potential breach? Any thoughts? Thanks. Ed

IRA owner, age 62, dies in early 1999. Surviving spouse will be 59 1/2 in November 2000, before the end of the year following the year of death. SS would like to take penalty free death distribution(s) before 59 1/2 and then make it her own IRA before the end of 2000. Can she do this? In other words, does a taking a death distribution mean she has irrevocably elected to treat it this way?

SS does not want to start a 5-year substantially equal periodic payment plan.

Thank you.

[This message has been edited by Steve Palmer (edited 03-05-99).]

Client has stock available to employees and is seeking software to record ee name, date of purchase, cost of stock, etc. Does anyone know if such software may be available in the marketplace?

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We have a cafeteria plan that allows pre-tax employee contributions to pay premiums for third-party health insurance policy. The cafeteria plan also has a flexible spending arrangement to reimburse proper medical expenses not paid for under the health insurance policy.

Election forms under the FSA must be submitted by 4/30/99. At some later date, we anticipate that we will change to a different health insurance plan that carries a lower premium, but requires greater employee payment of expenses (i.e. higher deductibles and co-pays).

I believe the new "cost changes" reason under the '97 proposed regulations for making an election change allows an across the board adjustment to the amount deferred under the cafeteria plan for the lower premium under the new health plan.

The question is whether employees can make a mid-year change to increase FSA deferrals. The "cost changes" rationale would not seem to apply because that deals with an increase or decrease in premiums for a third-party health insurance policy.

I question whether the "coverage changes" provision of the proposed regulations (or any other proposed or temporary regulation) would allow a mid-year change of the FSA because the "similar coverage" actually would be provided under two plans - the new health plan and increased FSA deferrals.

Any thoughts would be appreciated.

Is anyone aware of a proposal system that would be compatible with Quantech?

The 415 limit is a personal limit by employer. As long as your guy owns a certain percentage (I think 50%, but I'm not sure) of the Corp., then for 415 purposes it's the same entity as the Sole Prop. and the service could count. You should be careful with the DB accruals because the 415 $ max (130,000) still requires 10 year PARTICIPATION in the DB plan to get it.

Are stepchildren considered "children" under the definition of "family member"? There is a specific reference to "adopted children" being considered "children", but i cannot find any reference to stepchildren?

If the employer contributes 3% can HCEs defer $10,000, or are they stuck with the 125% of NHCE percentage? The 3% does not push the HCE over 15%.

Thank you.

An employer would like to establish a nonqualified deferred comp. plan for an executive, with a 10% of annual comp. deferral. However the employer would like to allow for an additional deferral of a "bonus" in the first year of the plan, in recognition of the executive's prior service to the company. Provided that the deferral election is in place prior to receipt of the bonus and the bonus is subject to the withdrawal conditions that apply to regular deferrals (i.e., term. of employment, death, disability, etc.) does this pose a problem?

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My employer gives the employees their 401(k) employer contribution match usually just once a year. My question , Is the employer restricted to a time limit as to when to deposit such funds? I am guessing the limit to be either 6 months or 1 year but I really don't know. Thanks

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