Does anyone have experience with company contacts/hr staff that just seem incapable of understanding the plan process? We have one contact that calls at least once a day (frequently more often) to ask the same question she asked the day before. We pride ourselves on delivering high quality service but we're spending an inordinate amount of time with this one contact and are extremely frustrated. We met with her at our office when she was hired and explained how the plan works, and now, over a month later, she's still every bit as confused as ever. Not sure how to handle this without making the owner mad but we're a small firm and this lady is eating into time we just don't have. We don't bill by the hour and we're wondering if this is just one case where we're going to have to accept the loss as part of doing business this way.

[This message has been edited by Crystal (edited 03-11-99).]

[This message has been edited by Crystal (edited 03-11-99).]

I converted from traditional IRA to ROTH IRA in late Dec 98. The MAGI limitation for married taxpayers is $100k. Does the MAGI include taxable income from ROTH IRA??

I'm attempting to determine the maximum contribution to a Roth for my self-employed son. He was 1099 (Misc.) for 2000 for modeling which is his total earned income (He had some dividends as well.) Can he contribute 2000 to a Roth? or can he only contribute his AGI? He must pay 283 in self employment tax which 142 (half) is deductible, reducing his AGI. Turbo tax seems to be using the AGI.

We've heard a lot about electronic HR/benefits communication, but I'm curious to know who is really doing it and how. What companies are using it with their employees and what exactly are they doing? What firms are able to effectively help companies do electronic HR/EB communication and what and how are they actually doing it?

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Vicki L. Dungan, ABC

The Adobe Group LLC

Washington, DC

vicki.dungan@adobegroup.com

We've heard a lot about electronic HR/benefits communication, but I'm curious to know who is really doing it and how. What companies are using it with their employees and what exactly are they doing? What firms are able to effectively help companies do electronic HR/EB communication and what and how are they actually doing it?

I'm really looking for specific companies and specific applications. Thanks.

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Vicki L. Dungan, ABC

The Adobe Group LLC

Washington, DC

vicki.dungan@adobegroup.com

[This message has been edited by Vicki Dungan (edited 03-13-99).]

In plan year 1998 an EE contributed $12,500 in Salary Deferral. He must remove the $2,500 + gains of the deferral. The match went in per pay period. Does the match relating to the additional $2,500 (excess deferral) also have come out of the plan with the gain on the match? How many 1099R's?

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To protect against a stock market decline between the original due date of the tax return and the due date including extensions it is important to advise a client of the benefit of extensions. Failure to do this could cause your client to pay more tax than necessary with no hope of recovery except from his tax preparer!

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DAVID SNYDER, CPA

[This message has been edited by DAVETAX (edited 03-10-99).]

[This message has been edited by DAVETAX (edited 03-10-99).]

Is an early retirement plan which provides benefits for: five years, until the retiree reaches age 62 or until total benefits equal $40,000 -- whichever occurs FIRST, violative of the Age Discrimination in Employment Act (ADEA) or the Older Workers Benefit Protection Act (OWBPA)?

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Sheila Williams

I am new to EB, so forgive me if I use incorrect terminology.

I have a client that wants to set up a consulting business. After incorporating, he wants to create both a DB and a DC plan. He will be the sole employee and he is currently 57 years old. I understand that the super top heavy limitations for combined DB & DC plans have been eliminated for plan years after 1999.

However, my question is how these changes have affected the corporate deductions allowed under 404? As I read 404, the corp. will be able to take a deduction of the greater of 25% of compensation or the 412 minimum funding limitation. How high can the 412 minimum funding be? I believe he wants to pay himself over $150k/year and is looking to retire at 65. Would I need to determine what his defined benefit will be starting at age 65 and amortize that to determine the current minimum funding?

Many thanks!

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_______________________________________

Charles N. Griffin, III

Kirschbaum, Nanney, Brown & Keenan

300 W. Millbrook Road

P.O. Box 19766

Raleigh, NC 27619

Telephone: (919) 848-0420

Fax: (919) 848-4216

email: cngriffin@abanet.org

Licensed in North Carolina and South Carolina.

Practicing in the areas of estate planning and administration, tax, corporate formation, and

business and employment law.

This communication is merely informational and should not be relied upon as legal advice. No attorney-client relationship is intended or created through the use of this non-priviledged form of communcation.

What are the pros and cons of a governmental employer utilizing IRC section 420 to transfer assets out of a defined benefit plan to fund retiree health insurance costs? Traditionally employer has funded health costs on a pay as you go basis and subsidized some retiree health costs. Employer wants to begin subsidizing the costs of survivors of annuitants and is looking at IRC section 420 as a possible funding mechanism. Annuitants and their dependents currently receive some employer subsidy. Has any one’s clients attempted such a transfer. What was the experience like? Are there difficult administrative burdens? Is the immediate vesting requirement under IRC section 420 expensive actuarially? If this is generally a win-win situation, why hasn’t there been a rush for employers to use? Are there any good materials available either in print or on the web?

Things to consider:

if amount of contribution is never going to be a problem, the money purchase is probably the way to go.

Based on the comp figure provided, they could never get 30,000 a piece in a ps plan due to 15% limit.

since plan is top heavy anyway, consider a 3% Money purchase, and a profit sharing plan by group.

if doctors get 30,000 with 160000 in comp, they have received 18.75% of pay.

if you allocate 7% contribution to rank and file, a 10 year difference in ages between them and the docs is needed.

e.g. 1.085^10 = 2.26

2.26 * 7% = 15.827

with permitted disparity the value would come close to 18.75.

By the way, if you have a 20 year difference in ages, a 3% contribution usually works.

Confirm valid IRS Distribution Code Combinations based on IRS PUB 1220:

1 A, 1 D, 1 L, 1 P, 2 A, 2 D, 2 L, 2 P,

3 A, 4 A, 4 D, 4 G, 4 P, 7 A, 8 1, 8 2,

& 8 4.

I am trying to understand IRS Notice 89-110, which states that for plan years ending on or before December 31, 1991, dependent group-term life insurance cannot be included in a cafeteria plan without violating 1.125-2 Q&A-4(d)if such benefit would also be eligible for exclusion under Section 132 if offered outside a cafeteria plan. Does this mean you may never include dependent life insurance coverage in a cafeteria plan? Or, does it mean that you can include dependent coverage if it does not qualify as a de minimis fringe benefit under 132(e)? All opinions are greatly appreciated.

Can a plan trustee limit successor alternate payees (who are named in the QDRO as being entitled to receive benefits if the alternate payee dies before they are fully distributed) to the dependent children of the plan participant?

Currently I don't have any IRA savings &

I plan to save in Roth IRA. Isit possible & where can I get the info needed.Also, does my employer need to know about this? Can I transfer my savings from 401(k) to Roth IRA?

Please help!

My company makes a SARSEP contribtuion for me each year. Does this have any effect on my ability to make a Roth contribution?

Does anyone have experience with retroactively amending plan document to reflect plan sponsor's intent and actual operation of plan -- plan document states eligibility condition is 3 months of service, but plan sponsor intended 1 year of service and has consistently administered plan accordingly. I would generally recommend going through Walk-in CAP to amend plan document back to effective date (1/1/97) to provide for 1 year of service, but am concerned that IRS would not approve proposed amendment because it is not "most beneficial to plan's participants". Any thoughts?? Thanks.

I worked for about 3 years for the feds under Civil Service when I was a kid. So I took the CS cash when I went private. Then 15 years ago I put in about 8 years under FERS. I'd like to buy those extra years of service (when I was covered by CS)...no one can tell me what I get if I do, how much it will cost, etc. ANy help?

I contributed $2,000 to a traditional IRA a couple of years ago and converted that account, now over $4,000, to a Roth IRA last year. Soon after making the original contribution I lost my job and decided to return to graduate school. I am now finishing school and would like to pay off some of the bills I accumalated while studying. Can I make a withdrawl of the original $2,000, the whole $4,000 or nothing for five years without incurring the 10% penalty?

Two Controlled Groups of Corporations of 55 an 60 Participants ( Auto Dealerships)erronousley ommited a smaller controlled group 10 Employee Bank from the Nationally Sponsored Plan they adoped under seperate lines of business. Provided the Plan passes coverage is there a problem with the exclusion of the Bank? If the Bank were to sponsor a Plan could it be tested seperately?