I left a company. I requested a lump sum of my benefit. The lump sum was calculated based on age nearest birthday (plan historically administered this way) at time of distribution. My age nearest birthday increased by a year prior to the distribution date. However the plan administrator paid my lump sum based on my younger age. I submitted a claim stating that I am entitled to an additional lump sum payment, since my age increased by time of distribution. Any thoughts. P.S. payment was made about 9 days after I attained my next age nearest birthday.

When amending a pension plan to be a cash balance plan, are there any known restrictions w/r to determining the present value of benefit in order to arrive at an initial account balance? One plan used a rate of 9%, which seems high, considering that when a plan pays a lump sum, there are maximum allowable rates.

Ok, I have two questions.

1) I'm graduating in May and starting my new job on May 17th. My company's 401(k) matches $.50 for the first $1500 I contribute, not matter how much I contribute. I was planning on contributing 15% to my 401(k), but since their matching is so low, I decided to do it this way:

First, I'll contribute $1500 to 401(k).

Then, I'll save $2000 to put in a Roth IRA. Last, I would contribute the rest back to the 401(k) plan.

For example, if 15% of my salary was $15,000 (it's not), I would contribute $13000 to my 401(k) ($1500 + $11500) and then the other $2000 to the Roth.

Does this seem like a good idea?

2) If I get paid 15 times at my new job (once in May, twice a month in June through December) and I save $268 each month, I'll have the $2000 to put in to the Roth. What I don't understand is this: Can I open up a Roth with nothing in it and make monthly contributions of $268 (up to $2000) or do I have to open and/or contribute to a Roth between Jan. 1 and April 15th? That I guess is what is confusing me.

Thanks for any info.

We are seeking health coverage for individual manager of our Condo Association. He has had health problems and we cannot secure individual coverage. Any Suggestions? Are there any Associations which he can join and obtain Group Health Coverage?

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William, I am not sure about the settlement money. The average rate of return on a Roth IRA depends on what financial vehicle you invest it in. Wether it be mutual funds, stocks, bonds etc.... That is the great thing about the Roth. You are in control and you decide how your money will be invested.

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Gordon

In 1998 I had converted a 401k from a previous employer to a Trad. IRA to a Roth IRA. After doing taxes I discovered our AGI was 106,000 (I thought 150,000 was the magic number) due to a car allowance from my employer which was included into my AGI but was ment to take care of car expenses for work. The payment was always given as a seperate check. Without this amount we would have been under 100,000 with no problem. What must I do now ? Are there any clauses that can help me keep my conversion where it is?

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Gordon

Four doctors each own 25% of a medical practice. They have a Profit Sharing Plan. They terminate the plan and sell their practice to Company A in 1996.

All assets are distributed from the plan in 1998. In 1999 four doctors buy the medical practice from Company A, each with 25% ownership. Three of these doctors are the original owners.

The new owners want to start a 401(k) plan. I'm having trouble deciding whether I need to include the prior PSP in my top heavy calculations. Any ideas?

thanks

mck

I'd like a method for computing my taxable IRA distribution. The method needs to take a recharacterization into account.

Intuitively it should work like this:

[1] First conversion: taxable amount is the distribution from the original IRA to the Roth IRA.

[2] After recharacterization: The Roth IRA is transferred back to the original account, erasing the original conversion. It is then converted into a Roth IRA once again. The tax should be on this new distribution from the original IRA to the Roth IRA.

My mutual fund company sent me horrible paperwork, and there was some lag time between when my Roth IRA was "uncoverted" and reconverted, so it is not clear what the distribution was. The phone reps have not been too helpful; I received conflicting information. The 1099-R form looks as though all distributions have been added together.

So, how do I do this?

Thanks,

Mike

I terminated employment 12/31/97 after 15 years of service. Employer says I will receive profit sharing plan lump-sum distribution 10/99 with interest for 1998, but nothing for 1999. I thought benefits had to be paid in less than 60 days. What to do??

[This message has been edited by Bob Mohar (edited 02-27-99).]

How did the test case states fare with enrollments... was their lots of confusion... did many seniors fail to make a choice... are their LOTS of complaints... what are the complaints?

When is the latest you must send notice to a participant that will be receiving a distribution? I've read the regs and I'm still unsure.

I have two issues I need some help with:

1) For those of you whose company has an employer match, do you mandate where that match be allocated (eg. company stock fund) or can the employee request that the match be invested in any of the Plan funds?

2) If your company's plan offers loans, do you charge an administrative fee when a loan is applied for and annually thereafter for as long as the loan is outstanding?

Assuming they are properly drafted, are prenuptual agreements binding on nonqualified deferred compensation plans?

I was a flight attendant for American Airlines for 20+yrs. and medically retired in 1992. How can I find information on the current status of my retirement benifits? Contacting "AA" has not been very helpful... and do not know the current program administrator. Can anyone help. Thanks in advance.

We have a client who would like to allow their employees to defer their bonus at the end of the year. However, they do not want to match this specific deferral. Am I correct in understanding that this would result in having to have two definitions of compensation, therefore resulting in a nonstandardized plan? My other question is, can I attach an amendment that makes a plan non-standardized and not file a 5307 until a new adoption agreement is done 1 year from now?

An employer issues PS check and deducts by tax filing due date. The check is sent fedex to administrator. Trace on fedex package shows that administrator received, however it becomes MIA after that.

Can the employer reissue a check and still be okay with deduction rules concerning timing of contribution?

Self employed person deferred $6000 in '98 but now doesn't have $6,000 of earned income.

Is there any way to return the excess?

How is it reproted on the 1099R?

Does anyone know where I can find on the Internet the location of IRS Notices as soon as they are released? I have looked at the IRS Web Site and can't seem to find them there. I would like to have access to the notices announcing the Current Liability Interest Rate Ranges as soon as they are available. Thanks for your help.

For testing for the plan year ended 12/31/1998, the plan is testing employees who otherwise could be excluded under IRC 410(a) separately. In other words, those with less than a year of service (including any entry date assumption) and those under age 21 are tested separately.

An employee was hired April 1997, earning over $80,000 during the rest of 1997, and became eligible to participate in the 401(k) plan on 5/1/1997. The employee terminated employment February 1998. For the 1998 testing, is this person considered as having < 1 year of service because he terminated employment before 1 year of service, or is this person tested with the group of employees with at least a year of service because that's what he would have had at the end of the plan year? Alternatively, is either interpretation reasonable considering the vague regulatory guidance on this issue, as long as we're consistent for all employees in that plan?

Yes, I realize the rules change effective for 1999, but my question relates to the 1998 rules.

I am very interested in learning how other companies handle vacation policies for commission-based employees. I am familiar with policies for hourly and salaried employees; however, I would welcome any information you could share regarding commission-based employees. Thank you.