posted 12-14-98 03:51 PM ET (US)            

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Query: Employer has an existing 401k plan. Approx 12 participants. He wants to terminaet the plan because he is sick of the high costs and wants to start a simple ira. in 1999. I see a problem due to reg 1.401(k)-1(d)(6) rules applicable to distributions upon plan termination. If the Employer terminates the plan (which is considered a distribution event) and makes a distribution he will be prohibited from starting a simple ira for the 12 months following the distribution. My research has led me to the possibility of coverting the 401k to a simple 401k, creating a SEP, or waiting a year to start the simple IRA. Bottomline my clients wants to save money. Do you see any way around the 12 month prohibition and immediately starting a simple ira? One more question. If the Employer does start a simple IRA, one year later, can you rollover into a simple IRA from a SEP or simple 401k? Thanks for any help you can provide.

This is not a specific 401k Q, but, I have a new client with 5,000+ employees and they would like for the employees to make better personal financial mgt choices, thereby reducing loans, hardwhip withdrawels, garnishments, etc. They are willing to provide Employee Financial Education Workshops.

I am looking for "off the shelf" tools to use at the workshops, ie, workbooks, overheads, etc. etc. We invision a 6 - 9 hour workshop over 2 -3 meetings.

Anybody know of such tools??

To assist in tracking nondeductible IRA contribution, these were transferred to Roth. Is this a nontaxable event? Do earnings on these nondeductible contributions have to be transferred?

If I have an employee who was injured on the job and is on workers comp, should I place them on FMLA leave as well?

Can anyone direct me to a fairly recent article (e.g., CCH, BNA, RIA, ASPA) on responding to an IRS audit of a qualified plan? Any other recommended resources? Thanks.

Any input would be helpful. Creative ERISA tax attorney asking about the creation of new DC or DB plan to accept $5,000,000 rollover. A private annuity would be created for older participant. Upon death of participant, funds would be used to either fund DB or DC. Goal is to avoid probate of this major asset. Any observations, methods, etc. would be greatly appreciated. I am drawing blanks. My feeling is NO CAN DO.

I've had an IRA for 5 yrs. If I convert to Roth and want to withdraw $$$ under special provisions (say school, or 1st time house buying), do I have to wait another 5-yrs from date of conversion?

If yes, is it more beneficial to stay in IRA and be able to redeem a.s.a. needed, although having to pay taxes on redemption?

How are TPA's handling plan forfeitures for daily plans that allow for immediate distributions?

We have just converted our daily plans from Trustmark to Quantech. In Trustmark, there was a Mr. Forfeiture in each plan with the social of 999-99-9999, however it was not a relational database so this was not a problem. After a distribution, we would transfer all nonvested $ to Mr. Forfeiture and allocate once a year.

We are debating over the following 2 options:

1. Leaving the forfeitures in the participants account until the end of the year. Does the fact that the participant still has voice response access and can make changes cause a problem ? And I believe we would need to do a transfer from the participant elections to a balanced strategy? Also, we are doing quarterly statements and we don't want terminated participants with nonvested balances to receive statements. In a big plan it would be a pain to have to manually take out the statements of terminated non-vested participants.

2. Setting up "fake" social security #s. I know this can cause a significant problem in Quantech. If we opted to do this, obviously each plan would have a unique social for Mr. Forfeiture and we would maintain a master list of any "fake" socials. As far as how to get the money from the participant to Mr. Forfeiture, could we just forfeit the terminated participant as if going into suspense and post a forfeiture to Mr. Forfeiture only ?

We are wondering how other TPA's who use Quantech are handling this. Any input would be helpful.

Judy Diamond is a service that provides basic information about DB Pension Plans and the plan sponsors. Does anyone know of a less expensive way to obtain this type of information . i.e. plan name, contact person, funding level, plan liabilities, etc.

As most of you know, my Employee Benefits Legal Resource site contains resources for everything from updated lists of section 415 and other inflation-adjusted limits to how to find out whether participants you cannot locate have died. For anyone who is interested, I have just added a new feature which enables visitors to take a tour of the site.

As most of you know, my Employee Benefits Legal Resource site contains resources for everything from updated lists of section 415 and other inflation-adjusted limits to how to find out whether participants you cannot locate have died. For anyone who is interested, I have just added a new feature which enables visitors to take a tour of the site.

Assume $400,000 is converted from a traditional IRA to a Roth IRA in 1998. This means that $100,000 will be included in income for 1998,1999,2000 and 2001. For federal income tax purposes, can the income be considered to be received uniformly over the three years following 1998, so that estimated taxes are paid each quarter on 1/4 of the income. Or, must the income be considered as all received in the first quarter of these years, so all the estimated tax on the $100,000 will be paid in the first quarter of each year?

I am working on how much of my portfolio I can afford to convert to a Roth IRA. A few thousand is in an IRA that was created with non-deductible funds, the great majority is in several IRAs formed from deductible contributions. I've noted that some kind of balancing must be done for conversion to Roth IRAs but don't know how to do this.

Are long term capital gains from the sale of rental property included in modified adjusted gross income (MAGI) for the purposes of Roth IRA's?

What is MAGI?

Anyone know where I can get PBGC rates for present values for single employer plan terms, prior to 1994?

A plan provides the following for post 65 accruals. Age 65 benefit is to be converted to a lump sum, then increased with interest to actual ret. and then converted to a equiv ben @ actual ret. The first question is, this actuarial increase doesn't seem to comply w/ regs. The regs seem to instruct us to compare the act equiv w/ the actual accrual after every plan year and then at actual ret. Any thoughts? Anyway, trying to interpret the plan, I have the following questions. If age 65 lump sum is accum w. interest to actual ret, s/ it be accumulated w/ the lump sum interest set forth in plan or act equiv. for all other benefits? And lastly, when the benefit is converted @ actual ret to an equiv annuity, (it doesn't specify) s/ benefit be converted using lump sum rates or act equiv rates for plan benefits other than lump sums?

I am 23 years old and I am ready to start investing for my future. I will openly admit that I am not the greatest when it comes to finances; but I have heard many good things about Roth IRA's. My question is where is a good place to look for information about Roth IRA's that even a dummy could understand? Also is this a good place to start for young investors, or would a mutual fund be better?

Thanks

What section of ERISA Code details trust fund requirements?

Does the state of California require tax withholding on lump sum distributions from qualified plans?