Has anyone any thoughts (citations appreciated)on whether an executor or executrix can convert a traditional IRA into a Roth IRA on behalf of the deceased? Would the answer change if the executor(trix)were not the beneficiary of the tradirtional IRA?

When do Section 125 Premium Only Plan Documents need to be amended for Treas Reg 1.125-4T?

Also, we would like to start offering Section 125 Premium Only Plan installation and administration service. Does anyone have a source for Plan Documents?

An employer maintains a NQDC plan. The employer has also establisged a rabbi trust. Currently insurance contracts are held by a trust company and employer pats trust company a custodial fee. Employer is interested in either (i) taking physical control of life insurance policies or (ii) permitting its law firm to take physical control of insurance policies. Is this ok? Any thoughts? Tanks. Ed

Any drafting tips for a trust which will be the designated beneficiary of an IRA and Roth IRA?

I need drafting tips for a qualified trust which will be the designated beneficiary of a IRA and Roth IRA. Please advise.

I have an approved disability claim. Coverage paid by employer. Plan book says I am entitled to 60% of my income. Employer reported income that is $40,000.00 short of what my income was and paid a premium based on the wrong income that is $40k lowere than actual. Carrier says its employers problem and employer says I have to deal with carrier. The monthly benefit difference is substantial. Question: As a group plan, isn't the "plan" responsible to pay in accordance to the "Plan" regardless of administrative error in reporting less income than I really had?

Here's the situation:

1) An employee signs a deferral election six months in advance of his eligibility date.

2) The personnel department files the election and then fails to put it into effect when he becomes eligible to defer.

3) In 1996 and 1997 the employee receives a statement from the plan showing a Profit Sharing allocation but no elective deferrals or employer matching contributions. He also receives W-2 forms for both years showing no 401(k) deferrals and his pay stubs also indicate no 401(k) deferrals.

3) In October, 1998 the employee finally notices that no deferrals are being taken and asks the personnel department for an explanation. Upon review, personnel advises him that they erred in not placing his 1995 election into effect, and that they will permit him to defer as much as possible with an equivalent match to the legal limit in order to "catch up" the contribution.

4) Employee responds with the threat of a lawsuit.

Is there some point where the responsibility for this shifts to the employee? He did, after all, receive paystubs for 2 1/2 years which clearly indicated no withholding, he received statements of account and w-2 forms for 2 years and didn't notice until the end of the third year.

Is this all the employer's responsibility? What is a reasonable period of time to elapse before the employee shares some of it?

Is there anything to prevent one from contributing to a regular IRA (say $2000) in '98, then converting it to a Roth. This would appear to allow a '98 deduction for the IRA contribution ($2000) while only requiring an add-back to income of $500 in '98. Of course, you'd have to add $500 to income in each of the three subsequent years.

An individual (Mr. X) has two businesses.

Business #1 is set up as a sole proprietorship, with a 1040 Schedule C. No other employees other than himself.

Business #2 is set up as a corporation (Corporation M), with Mr. X as the sole employee.

He is setting up a 25% Money Purchase Plan. How can he set up the plan so that income from both the sole prop as well as his W2 salary from Corporation X is included for determining his contribution.

(Of course, the $160,000 pay limit applies to both businesses combined.)

If the plan covers both businesses, what EIN is used for the 5500 filing? If the total earnings exceeds $160,000, which business takes which deduction?

Ideas? Thanks..

When recharacterizing a Roth IRA back to a Traditional IRA, what distribution code is used on the 1099-R?

An employee went on workers' compensation during February of 1998. The plan provides that only employees actively employed on December 31, 1998 are entitled to receive an allocation. Is the employee entitled to receive a proportionate share of the employer profit sharing allocation?

My initial thought is provided the employee has not officially terminated employment he is eligible to receive a share of the employer profit sharing allocation. That contribution would, however, only be based on the compensation received by the employee prior to the date he went out on workers' compensation.

Any thoughts?

What about a 23-year-old adult, U.S. citizen who is working for a foreign company outside the United States for all of 1998 and earns overseas more than $2,000 but below the amount that would trigger any U.S. tax liability on earnings. As a result, the wages are not subject to U.S. tax and not included in AGI on the individual's 1040. (This person still files a U.S. tax return because of some interest, dividends and capital gains.) Assume further that AGI (both as reported and adjusted to include overseas earnings) is low enough that this person could clearly set up a traditional IRA or a Roth IRA if the wages had been earned in the U.S.

Question: Can this person make a 1998 contribution of $2,000 to either a Roth IRA

or a traditional IRA?

What is the consensus in the benefits community as to a sponsor's ability to satisfy DOL regs regarding the provision of an SPD to plan participants by posting it on a designated web site? What is the consensus of the community with respect to the ability of a plan sponsor to satisfy 404© requirements by delivering 404© information solely on a website, with no manual/paper delivery of 404© information to participants?

We serve as a corporate trustee for retirement plans. This includes the issuance of distributions to paricipants and corresponding federal tax withholding. Some recordkeepers have informed us certain states have mandatory state tax withholding on retirement plan distributions and we (the trust company) must submit these taxes on the participant's behalf. Is this true? If so, which states require state tax withholding?

If an employee's work schedule changes from day shift to night shift, and childcare expenses are no longer necessary would this constitute a CIFS and allow the employee to drop the childcare deduction?

What action may be taken by an employer that has a SARSEP but now his employees exceed 25. Can he keep the plan?

A member of a professional corporation signed a one-time, irrevocable waiver of participation in the corporation's money purchase pension plan. He had previously participated in the plan for several years. The member then terminated employment and was rehired a year later. He signed an additional opt-out form upon completion of the eligibility waiting period. However, he "revoked" his irrevocable waiver and entered the plan shortly afterward. The plan is now under IRS audit, and the agent has said that minimum funding deficiencies may apply. Is there a way to proceed so as to minimize potential penalties?

an investment company that manages 2 funds, not publicly traded, has just started a 401k plan and is offering its 2 funds as investment choices to its employees. they are waiving any management fees associated with the investment of these assets.

would this be considered a prohibited transaction?

What procedure to follow or what laws help the disabled person to get benefits from insurance company that keeps denying benefits

I am looking to obtain sample copies of employee surveys which other companies have utilized in questioning employees as to their level of satsifaction with their company's current benefit and compensation package(s). If you have sample surveys which you would be willing to share please send to me via e-mail at 80karlor@menasha.com or via fax at 920/751-1418.

Thanks in advance for your help!

[This message has been edited by Lori (edited 12-21-98).]