My company is starting a POP Section 125 in January. I was told that, in a POP, employees can make changes to their health coverages anytime during the year without a qualifying event provided the health plan provider does not have restrictions. The only time a qualifying event is needed is in a reimbursing account. This doesn't sound right to me. Is this correct?

I have a Roth IRA with 3 primary beneficiaries. Upon my death,

can each beneficiary elect to take distributions based on their own life

expectency or must each withdraw on the life expectency of the oldest

beneficiary? If the answer is the latter can I split the Roth IRA into

separate IRAs and have just one primary beneficiary on each IRA, so they may withdraw based on their own life expectency?

Can anyone provide me with some specific examples of how the Y2K problem might adversely affect a DB plan, assuming an employer's benefit systems are not Year 2000 compliant after 12/31/99?

Are tax exempt income and/or capital gains included in modified adjusted gross income (MAGI).

For example: An individual has salaries and capital gains equaling $90M. If tax exempt income is $50M, do they still qualify to CONVERT an existing IRA to the Roth?

I am getting ready to open a Roth IRA and was planning on transferring some assets I curreently have in a mutual fund. Is this allowed or do contributions have to be in cash? Thanks in advance.

I don't know much about 403(B) plans. Why would a 501©3 organization want a 401(k) vs. a 403(B)? Advantages and/or disadvantages?

Thanks for all responses.

mck

My agi will not meet the 100k limit for conversion of my current IRA to a Roth in 1998. Can i start a Roth in 1999, make my 2k contribution, and then roll over my older IRA somewhere down the road when i meet the 100k limit.

What if my client converts to a Roth IRA this year, but his net operating losses are disallowed on audit two years hence, and his AGI turns out to have been over $100,000--would he be able to retrench his converted Roth IRA into a regular IRA, even though it is past the extension date of this year's tax return? Or is he stuck with a taxable distribution?

I have a active SEP/IRA. I understand that I cannot convert the SEP portion to a Roth IRA. The investment gains in the account are a result of both my IRA contributions and my SEP contributions. How do I separate out the IRA side for the conversion process?

I'm installing my first Davis Bacon Plan (profit sharing). Does anyone have a plan that I might be able to review while I'm drafting mine? I understand that Davis Bacon plans must satisfy general requirements, but is there anything special I need to consider? Thanks. Ed

Can a 50 year old man w/draw from his IRA penalty free to build a home (not his 1st home). Converting to a Roth does not seem to make sense for this. I don't believe that there is a way. If he were able to pay the money back w/in 60 days

would this work?

I am hoping that knowledgeable persons could share with me any experience they might have had with IRC section 415©(3)©.

The scenario that I am in, is as follows. The plan in question has a participant that has left employment due to permanent and total disability. The participant has not worked at all during the current plan year. He has no W2 wages at all during this period.

The employer wishes to include this participant in the allocation of the year's employer discretionary contribution. My understanding is that IRC 415©(3)© would allow the employer to impute compensation for this participant at the rate that he would have earned had the disability not occurred. The particpant would then be able to receive an allocation based on that compensation.

The contribution is allocated based on a points formula. The formula gives points for compensation and for years of service.

Here's the rub. What the employer wants to do, is give the participant points for years of service but not for compensation.

My question is...can the plan's definition of compensation for the purposes of allocating the contribution exclude this compensation? This compensation would be taken into account for the purposes of determining the participant's 415 limit.

Any help would be appreciated.

This is something which I should know but... maybe because the sun is shining or maybe I'm having a brain cramp, I need some direction. If a client terminates a 401(k) plan to establish a SIMPLE IRA plan, can the 401(k) assets be distributed? Cite please?

The DOL Regulations provide fairly detailed guidelines on the definition of "adequate security" for purposes of employee loans. Unfortunately, the Regs do not specify the procedures for collecting the "adequate security" on a defaulted loan when the loan is greater than 50% of the participant's vested balance (requiring the participant to use both plan funds and other assets, unrelated to the plan, as security on the loan).

Additionally, the Regs do not specify when a plan is in default, other than stating that the plan's written loan program must establish guidelines as to when a plan is in default.

(1)Are the DOL regs enough to determine whether a participant is in default on a plan loan? Do you use other law, or is the plan document truly the authority on this matter?

(2)Do non-ERISA laws (e.g., bankruptcy, lending, tort, etc) affect the procedures for collection of a participant's "adequate security," especially when the participant uses assets unrelated to the plan as security? Am I missing something here?

Thanks in advance for any answers.

If a non-owner employee is 70.5 and elects to waive the RMD for 1998, is there a minimum number of hours the employee has to work before he/she has the right to waive the RMD? In other words, does the waiver apply to part-time employees as well as full-time employees?

Notice 98-52 provides guidance on new 401(k) safe harbors. Section V.B.1.c.ii, Restrictions on Types of Compensation That May Be Deferred, specifies that the definition of compensation from which deferrals can be made must be a reasonable definition of compensation under 1.414(s)-1(d)(2) (but need not meet the nondiscrimination requirements of -1(d)(3)).

Is this a requirement that is applicable only to safe harbor plans, or has it been the rule applicable to all 401(k) plans?

Heretofore, I have interpreted 1.401(k)(a)(4)(iv), Application of nondiscrimination requirements to plans w/CODAs, to say that general discrimination is met through the ADP test and that availability of deferrals is met through 1.401(a)(4)-4(e)(3)(iii)(D). This last section indicates that the availability of each rate of deferral is determined by calculating the deferral rate based on the plan's definition of compensation "regardless of whether that definition satisfies section 414(s), but also treating different rates as existing if they are based on definitions of compensation or other requirments or formulas that are not substantially the same."

I have interpreted this to mean that a plan meets the availablity requirement if the same definition of deferral compensation is used for all participants, and that the definition did not have to meet 414(s) in any part.

How does the provision in Notice 98-52 practically affect the definition of eligible compensation that plans can specify for deferral?

Can commissions be excluded under the "reasonable definition" of 1.414(s)-1(d)(2)? This section provides that "irregular compensation" can be excluded. Are commissions "irregular compensation?" (It is understood that the ADP testing definition of compensation will have to satisfy 414(s).)

As a sidenote, it appears that a 414(s) definition of compensation must be used in determining the amount of matching contributions, which could be a problem if deferrals are based on a non-414(s) definition. Still working on this one.

Does anyone have a good NASD approved prospecting letter they would like to pass along?

If I take a distribution of contributory or conversion assets from my Roth IRA, can I repay this amount back at a later date or am I limited to $2,000/yr. in contributions, no matter what?

Example: Suppose I roll over $10,000 into a Roth in 1998 and contribute $2,000 each year for 5 years. I then withdraw $20,000 to buy a second home. Am I limited to still putting just $2,000/yr. into my Roth IRA in the following years or can I exceed that in order to repay the amount I withdrew?

When there has been a separation in service can a 403 B account be transferred to self-directed IRA? Secondly, is there a way to

withdraw money from a 403 B account or IRA account into which the 403 B has been transferred without incurring withholding taxes? Thirdly, if there is a means of doing the latter what is the time frame for paying taxes on redemptions during the fiscal year?

Look at Publications 560 and 575 from the IRS at www.irs.ustreas.gov/cgi/websys_fmanage