Lets say you have a premium only cafeteria plan for converting employee contributions for health plan benefits to pre-tax instead of post-tax contributions and your health plan is an insured plan. If the employer pays the entire premium for highly compensated employees but only pays a portion of the total premium for every other employee, do you have a discriminatory 125 plan? Obviously, the HCEs don't need the 125 plan and won't use it. We could gross up the HCEs (ie increase there salary so that they must elect like the nonHCEs) but we don't want to do that if we don't have to.

the non-trustee partner would like to become the rep (and recieve commissions) on the companies 401(k) plan). The company provides brokerage/advisory services to their clients and this is the companies own plan. Are there any prohibitions? Is this a conflict of interest? Thank you.

In June 1998, I converted a traditional IRA, then made a $2,000 1998 Roth contribution to the same account. I want to make a 1999 Roth contribution in the near future, but there is a (small) chance that my 1999 AGI will exceed the limit. I assume if my AGI did exceed the limit, I could convert my 1999 Roth IRA to a traditional IRA. Should I go ahead and make the contribution now, but to a separate IRA account? Thanks for any advice.

Am I correct in assuming that once a plan year has ended and an employer decides he wants to change the match formula for his 401(k) plan for the plan year that just ended, that he has 2 1/2 months after plan year end to make that amendment?

We currently use the SunGard STATs recordkeeping system and are considering converting to a new system.

All of our plans are balance forward, but we are planning to go daily in the future.

Any pro/con comments for Quantech, Datair or whatever else you use would be appreciated. Thanks.

The company is a C corporation. The ESOP purchased stock in 1994 with the proceeds of a loan. The ESOP again purchased stock in 1998 with the proceeds of a loan. The ESOP used dividends paid on the 1994 stock to make payments on the 1998 loan. Obviously the dividend is not deductible. However I also believe that the use of such dividend would be a prohibited transaction. But I am getting mixed answers.

The exemption for ESOP loans under 54.4975-7(B)(5) does not allow dividends paid on company stock other than dividends paid on the collateral stock for such loan to be used for debt payments. IRC 404(k) expands acceptable sources of repayment without violating the prohibited transaction exemption to dividends paid on allocated shares purchased with the proceeds of the loan being paid if other requirements are met. Therefore, does the use of such dividends cause a prohibited transaction? If so, what should be done to correct the problem?

What benefits does your company offer its executives who may be working outside the US (Europe)but continue to be US citizens? Who are the vendors?

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Thank You. Jodi

Where can I find additional help in determining just how much tax I will pay when converting my tradional IRA to a Roth?

I am trying to find some type of convient form or way of figuring the tax.

I know some of the basics behind Roth IRA's but I have a question that may seem a bit stupid. Where can a Roth IRA be opened?

I have a traditional IRA of my own that I was thinking about converting to a Roth for my new daughter of 5 months.

I need to be pointed in the right direction in my search for a replacement to an existing 403b plan at a church. Does anyone have a list of vendors they would recommend?

Thanky you for your help.

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Rich

In a situation where a Plan Sponsor fails to make timely deposits (and fails to correct):

1) What are the penalties/sanctions that might be levied against the Sponsor?

2) If individual employees and officers of the Company are trustees, do these individuals have any personal liability?

I have been working with 403(B) plans and as far as I know the distribution rules are a little different. Could someone answer me the following ?

1. Is the mandatory 20% rule waived ?

2. If a participant requests a hardship w/d or an in-service w/d...what money can he/she take out ? Is it only Employee contributions and no accumulated interest ? Also, is it only post or pre 1989 contributions ?

Thanks for any help you can give me !

Sec. 457(B)(3) allows for increased employee 457 contributions, up to a possible maximum of$15,000 per year, in the 3 tax years prior to year the employee "attains normal retirement age under the plan." When an employee can retire under the state government's standard retirement plan with 25 years of service and reaching 55 years of age, but can stay on indefinately beyond that time before actually retiring, when is the 3 tax years prior to the year the employee "attains normal retirement age under the plan" when the catchup provision can be used?

I am having trouble interpreting Notice 98-52 in regards to offering a forfeitable match in addition to the safe harbor basic or enhanced match formula.

If you are using one of the safe harbor match formulas, can you also offer a forfeitable matching formula of up 6% of comp (up to 4% for discretionary match)that is over and above the amount of the safe harbor match? Or, are the two considered to be cumulative to a total amount of only 6% of comp?

Also, my firm's attorney is taking the position that, if you use the safe harbor non-elective contribution, then you are still restricted to the 6% matching compensation limit because the non-elective contribution is assumed to satisfy the limits of the basic matching requirements. I, however, do not agree a per Section V.B.2. Please comment.

[This message has been edited by RMassa (edited 02-10-99).]

Our participant count was overstated on our PBGC Form 1 for 1998. I am completing an Amended 1998 Form 1 that will reflect an overpayment of premium.

I have read that the PBGC will issue a letter confirming the credit/refund. Does an employer have to wait for the confirmation letter before applying the credit to future payments. (For example, our 1999 Form 1-ES is due March 1, 1999.) Can the company take the credit from the 1998 Amended Form 1 and apply it to our 1999 Form 1-ES now, or do we have to wait for the confirmation letter.

When a participant requests a copy of the filing of the Form 5500-C/R for a particular plan year, do they receive the whole filing, including attachments, or should they only receive the pages of the 5500 itself?

I converted my IRA's to a Roth Conversion IRA account in 1998. I was told then that the Roth conversion accounts and the Roth contributory accounts had to be separate. Now, I understand that this may have been changed and I can contribute yearly amounts to my Roth Conversion account. I would like to know if this is true so I can make my 1998 contribution into just one account.

Health care coverage has historically been tied to employment for most Americans. (Medicare and Medicaid are obvious exceptions.) Should this arrangement be continued? Are there better arrangements? Is the current arrangement too entrenched to change? Will mandates result in even less employers, particulary smaller employers, offering coverage to employees?

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Ray Berry

A participant terminated employment 10/98 and the employer wants to make the distribution based on the 12/31/97 valuation report, and then pay out an "additional amount" (not defined), after the 12/31/98 valuation has been completed (in 10/99). The participant's final vested percentage has increased since 12/31/97, so is it more appropriate to wait until the 12/31/98 valuation has been completed to make the distribution? How would this "additional amount" be calculated? Shouldn't the participant's employer and booster account monies be based on their current value and the final vested percentage? What happens to any gains (or possibly losses)that occur during the first nine months of 1999, while the participant awaits the completion of the 12/31/98 valuation and their money sits in the plan's pooled account? Once the employer knows the number of units in the pooled account belonging to the partipant based on the 12/31/98 valuation, doesn't he calculate their current value (as of 10/99) and then make the distribution (no supplemental payments being needed and the value being current)? I appreciate any assistance with this issue. Thanks!--A

Does any one have or know where to find sample approved plan and SPD language to accomodate "negative elections"?

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Alan Mock