I have a client who incorporated mid-1998 from a sole prop. The client wants to continue the plan on behalf of his corporation. Does his Keogh Plan (P/S), a prototype, need to be terminated or can it be amended by restating it as a plan sponsered by a C-corp effective as of the day the business entity is changed? This question seems to come up quite often, but I can find no consistent answer.

Thanks for the help!

Our company has a full flex section 125 cafeteria benefits plan. We are interested in setting up a mass transit benefit pre-tax. I realize that this can not be set up as a flexible spending account in the 125 plan, but would appreciate any information on other ways to set up this benefit for our employees. We do not wish to purchase the transportation passes for employees, we just wish to offer the pre-tax savings as a benefit.

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Betty Taylor

Director of Human Resources

RHD, Inc.

I cannot find specifics about "qualified" deductions for education expenses. I would like to use my Roth IRA funds to help fund my kids' college tuition in 10 years but I can't tell if my kids' education qualifies. A Yahoo! contributor writes: "The expenses must be incurred by one of the following: you, your spouse, your spouse's children, your grandchildren or your spouse's grandchildren". What about MY children?

Are there any inherent advantages or disadvantages of different investment classes (i.e. growth vs. value funds, large vs. small cap funds, bond funds, reits) when used in a Roth vs. a Trad. IRA. Also, are prefered stock funds apropriate in IRA's

(1) As a general rule, are there any benefits to be derived from converting a 401(k) to a traditional IRA?

I'll be getting a share of a 401(k) as part of a divorce settlement. If I were to convert this it would be penalty-free in the context of a QDRO. But it might not make financial sense.

(2) Would there be any long-term benefits to then reconverting the traditional IRA immediately to a Roth IRA? There would certainly be a tax liability on this (going from a tax-deductible to a non-deductible plan), but would this "second" conversion incur a penalty because it is too far removed from the QDRO? I'm thinking that some of the tax liability would have to be paid from these assets (though not all), and this might constitute an "early withdrawal".

I would appreciate any clarification of these two issues.

Thanks!

If a plan sponsor returns any excess contributions by March 15 but does not adjust the returns for any gains/losses is this a valid return? Is the excise tax still due on the excess contributions?

Is the termination of a 457 Plan much the same as the termination of a plan qualified under 401???

Also, can a 457 Plan be frozen, i.e., no more deferrals allowed, and the assets held in the plan distributed as per the terms of the plan???

Any help appreciated,

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Does anyone offer continued health benefits for surviving spouses, other than COBRA? Is there a fee involved? If the employee would have been eligible for post-retirement medical, is the surviving spouse offered continued medical as if the employee had already retired?

Thanks for any help provided.

We are a quasi-governmental Authority that has been participating in our State government's 457 plan for several years. We now want to set up our own 457 plan, but we are concerned about the impact on our employees' current 457 assets. Our employees would not be able to continue to participate actively in the State plan. Can anyone tell us whether we will be required to transfer all of the current accounts into our new 457, or will we be able to allow our employees to choose when, and if, their current accounts will be transferred? We view our accounts as:

1. Active accounts owned by active employees;

2. dormant accounts owned by active employees;

3. dormant accounts owned by terminated employees; and

4. accounts with current benefit distributions.

Because we will have 3 vendors, each will up to 10 investment vehicles, we would prefer to allow our participants to choose when and where their assets are transferred and then have the State transfer the funds as elected.

Please take a look at the "Retirement Plans in General" message board. Look for the topic: "what qualifies a distribution for rollover treatment"?

Is there anyone out there that disagrees with the Court? Thanks, JOEL L. FRANK.

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I am interested in getting feedback on what the perceived impacts of managed care external appeal legislation will be . I would appreciate any thoughts!

In a recent magazine article, which I can no longer locate, it talked about a parent opening a Roth IRA for a child at the age of 16 who had not made the $2,000 and based on certain guidelines of investment would end up with a pretty good sum upon his retiremetn. Our financial planner thinks I'm crazy and does not know of anything like this. Please send me in the right direction. I'm really not that nuts.

If a plan document was never submitted for a determination letter and the plan is amended and restated for the 1996-1998 changes (GUST, would there be any problems in submitting it for a determination letter (the document has no unusual plan provisions)?

What should I be aware of in investigating whether to merge a money purchase pension plan with a 401(k) plan? How is this done?

I just read the "Inheriting a Roth Ira" list of 11 messages and found it confusing. I don't think much has been said about inheritance issues for people in the 40s 30s that have substantial Roth IRAs. What are the key issues? Thanks

I am a public worker with access to deferred comp., but I have chosen not to participate in it because I don't like the limited choices for investment. Because I have this option I believe I don't qualify for a traditional IRA (at least I can't deduct the contributions). Does this make a Roth IRA a no-brainer for me? Also, is it too late for the 1998 tax year, or do I have until the 15th?

Three months ago, I rolled a 401k into an existing IRA which already had monies in it. I now read that one should keep these separate and not comingle! Since I have deposited the monies, I have also purchased stocks and mutual funds with some of those monies, and I can't distinguish the monies. What does one do now? Does it really matter as 401k will all be after tax by definition?

[This message has been edited by SusanS (edited 03-28-99).]

In 1998, I signed papers to roll over my Self-Employed Retirement Plan money into an IRA and then convert it to a Roth. (I am Roth-eligible.) My retirement money is all in a brokerage account. I subsequently took distributions in 1998 to pay for qualified educational expenses.

I just discovered that my broker incorrectly tried to rollover the funds directly into a Roth. He now has to open a traditional IRA and then a conversion Roth. This all has me thinking that I may be better off deferring the tax liability completely and just keeping my money in the Traditional IRA. (The liability isn't much but I am currently a student.) If I decide to keep the money in the Traditional IRA, does it sound like I will have to recharacterize?

[This message has been edited by susan036 (edited 03-29-99).]

What kind of options does a person have to avoid the 6% penalty on non-deductable contributions. I have about $4,000 of a $40,000 Trad. IRA that I had to pay a penalty for when I filed my 1998 return. Can I convert just the non-deductable portion to a Roth, or do I have to convert the whole IRA to a Roth?

Can employer adopt treasury rate and

use 1984 mortality table or use PBGC rate and adopt treasury table and use thru 12/31/99? i.e. Never use both applicable interest rate and applicable mortality table until required.