What government agency oversees 401k

plans?

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roger pires

We have had a difficult time with our record keeper in allocating earnings and/or losses to an alternate payee's account between the date of division, e.g., date of divorce or date of separation, and the date on which the alternate payee's account is established. [it is not uncommon that the court will enter the purported QDRO several years after the date of division.]

The record keeper has indicated that few of their clients allow such allocation of earnings and/or losses and reject domestic relations orders that require such allocation. The record keepr would like us to reject domestic relations orders that require allocation of losses and earnings.

Does your plan allow the allocation of earnings and/or losses between the date of division and the date of allocation to the alternate payee? Or does your plan reject domestic relations order that require the allocation of losses and/or earnings?

Our record keeper has informed us that they cannot allocate earnings and losses from the date of division, e.g. date of divorce or date of separation, to the date of allocation. They indicate that few plans will allow this, but require that no earnings or losses be allocated. Does your plan allocate earnings or losses? or do you not accept dro's which allocate earnings and losses?

Do companies who are not yet profitable (but close) offer a 401(k) match as a competitive recruiting tool in small high tech companies?

Can an insurer terminate an employee's health insurance if the employee lied about prior medical conditions on the initial application? Does HIPAA prevent this?

For those interested, there is an NSCC link available through Vertical Management Systems, located in CA. Send me an e-mail and I can give you more details.

Does any one have any suggestion to transfer education IRA into any special

account other than UGMA? I have excess the education IRA limit. I already invested $500 in education IRA. I need

to remove excess amount from mutual fund.

Could someone please provide me with the name and phone number (and E-mail if available) of the contact person for the User's Group which meets in the Indianapolis, IN area? Thanks!

Does anyone have any comments or opinions on the IRA article in the 3/18 Wall Street Journal (front page section C)?

We have come across a situation where a participant/shareholder has named his company as beneficiary of his MP/PS benefits. There is no QJ&S issue and my question is does anyone feel this prohibited by Erisa.

Any thoughts would be appreciated

ok. Thanks for clearing that up for me. So to add to my original question, can the distribution be made to a conduit IRA, and then be moved into the living trust as a sub-account, so as not to commingle the assets??? I guess what I'm getting at is can the IRA continue on, status quo, as an 'asset' of the living trust?

I'm self employeed and make maximum yearly contributions to my SEP-IRA. The Roth IRA is obviously attractive because of its tax-savings. Can I have both a SEP-IRA and make contributions to a Roth IRA? Thanks for any information you can pass along.

My contact information is listed at the end of this message.

My question is with Minnesota state income taxes for 1998, 1999, 2000, and 2001 with a 401k to IRA to Roth IRA conversion. I am using the 4 year averaging federal income tax made for ROTH IRA conversions made before December 31, 1998. My conversions were completed before December 31, 1998.

First, I switched employers in July 1998 (one large corporation to another large corporation). At the same time, I switched residency from Tennessee to Minnesota, too, again in July 1998 (change jobs, new job in Minnesota, move to Minnesota for new job, etc).

Due to my switch of employers, I was allowed and I did roll my 401K plan to IRA and then to a ROTH IRA from my former employer. I did this in October 1998, after I established residency in Minnesota. To further complicate this, in May 1998, while I resident AND employed in Tennessee, I was allowed and did roll $20,000 from the 401k plan to a IRA and eventually to a Roth IRA (in May 1998). This early withdrawal was allowed in the 401K plan.

All the income contributed to this 401K plan was earned while I was a resident in Tennessee (1985 to July 1998). These were pretax contributions made to the 401K plan while.

The first $20,000 was converted to the ROTH IRA (via an IRA) was I was in Tennessee (May 1998). The final larger amount, $100,000 (not the real amount) was converted to the ROTH IRA after I established residency in Minnesota (October 1998).

How do I declare this on my Minnesota state income tax form? As a side note, I have already completed my 1998 Federal income tax forms and all asssociated forms. There is no confusion with how I declare this on my Federal income tax for the next 4 years.

1. I cannot find the correct forms or regulations for Minnesota for this. From my view, at least the $20,000 should not be included in Minnesota state income tax. I was not a resident in Minnesota when this was done. This income was also earned in Tennessee.

2. I am also trying to determine if the final $100,000 may also be excluded from Minnesota state income tax for the next four years. Why? I earned this income while a Tennessee resident. This pretax deduction reduced my Tennesseee taxes (pretax deduction in Tennessee). Tennessee state income tax only covers interest and dividends, not income from a job.

If so, what forms do I use for Minnesota. I have already searched Minnesota web site for forms and regulations.

On line 1 on the Minnesota state income tax, I enter line 39 from the 1040. This includes the amounts in 1. and 2. above. I cannot find how I can deduct this further down the Minnesota state income tax form on line 5 Subtractions. (I should be able at least 1. above -this occurred in Tennessee. Or how can Minnesota tax me while I was a resident of Tennessee on income earned in Tennessee?)

Here are even more details.

First, I have resided and only earned income in Tennessee from December 1985 to July 14, 1998, working at a job (paid Federal income taxes though on this income, withheld from my paycheck; it was a job at large corporations, normal W-2s, W-4s, etc.).

I moved to Minnesota and started earning income on July 27, 1998 (again a job at a large corporation in Minnesota, withholding for Federal and Minnesota state income tax, W-2s, W-4s,etc).

I established residency in Minnesota through a purchase of a home in Minnesota on August 15, 1998. I also sold my home in Tennessee on August 8, 1998 (sold just before I purchased my home in Minnesota). I also switched my driver's license to Minnesota, purchased and registered an automobile in Minnesota in August 1998.

While working in Tennessee from 1985 to July 1998, I participated in the large corporations 401k plan during this time - all pretax deductions for "Tennessee income", excluded from Tennessee state income tax.

Scott Bemis

Work Internet email: sebemis@bemis.com

Home Internet email: sebemis@access.webcombo.com

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Scott Bemis

Internet:

sebemis@access.webcombo.

net

What is the due date for a conversion from an IRA into a Roth IRA and make it count for year 1998? In other words, can I make a IRA conversion to a Roth before April 15, 1999 and designate it as a 1998 conversion and include it on the 1998 income tax return. I do understand that it will be taxable in 1998 and not qualify for the 4 year spread since it was not done by December 31, 1998. I do see several references that April 15 is the due date for a regular Roth contribution, and make it applicable to 1998, but I'm not sure of the date for conversion. Thanks for the help.

A union pension plan provides benefits based upon years of service multiplied by salary received. However, the formula does not include overtime worked; if overtime was included, the salary, and hence, the retirement benefit, would be significantly higher.

29 USC 1054 (B) (1) (A) seems to say that "a normal retirement benefit" is based on "average rate of compensation" during the consecutive years where an employee's salary was highest. However, these terms are not defined in the statute.

Does "average rate of compensation" include overtime, and is the failure of the plan to provide credit for such overtime actionable under ERISA?

Thanks in advance to all who respond.

I believe you could have simply "recharacterized" your Roth IRA as a traditional IRA. I don't think you needed to "roll" it back again, so the 62 days would not have been an issue. You can recharacterize your IRA anytime before filing date, including any extensions to which you are entitled. Lots of people will be recharacterizing their Roths if it turns out they earned too much in 1998 to be eligible for a Roth, or contributed more than $2,000.

Speak to an accountant or tax specialist about what steps you need to take and what penalties you might have incurred inadvertently. There may be a way out of this. The IRA's custodian may know too, but his/her concern is with investments, not tax issues per se.

If the retirement account is recharacterized as a traditional IRA, there should be no tax liability whether paid as a lump sum or spread over four years, because your IRA remains a deductible tax-deferred account as the 401(k) was. That's why one can't roll a 401(k) directly to a Roth, which is tax-free (taxes having been paid upfront on the original earnings). And the four year tax break was only good till December 31, 1998 anyway. Henceforth the taxes due on conversions to a Roth have to be paid as a lump sum.

Talk to a professional.

I will be getting a share of a 401(k) as part of a divorce settlement. I'm anxious to convert this to a Roth IRA for its long-term benefits, but know that I have to go through a traditional IRA first.

(1) No calculator that I've seen provides for the option of paying part of the conversion tax with outside assets, and the remainder with some of the IRA assets -- or in my case what would have been a 401(k). Does this mean the taxes have to come from a single source? I don't have enough ready cash to pay the whole tax burden, but I don't want to deplete the retirement account either.

(2) If the 401(k) is transferred to me and I roll it over immediately into a traditional IRA, and then convert this into a Roth, will both transactions be penalty-free because of the divorce situation, or only the initial transfer of the original 401(k)?

Thanks.

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Lyric

Husband purchases a joint & survivor annuity (not an employer plan). Wife dies 5 months after he does. There are no other beneficiaries. Q: Does the annuity become "worthless" upon wife's death, and therefore, value of zero is reported on her estate tax return?

Any assistance is appreciated.

We have a client that operates as a partnership. They asked us to calculate maximum contribution for 1998. They indicated that all four partners should share equally regarding wages for the common law employees. But the K-1 compensation is vastly different for each partner and indicates that partnership percentages are various.

I am not an accountant, but this arrangement seems questionable. Is this arrangement strange or normal?

If you have several regular IRA accounts, and want to convert, say one, and pay the tax all at once --- and then take a second IRA account and pay the tax using the 4-year spread, can you do this?