Felicia

Can IRA assets be used to purchase past service credit in governmental pension plans? If so, could it be done by trustee-to-trustee transfers? How would it be reported? Cites would be helpful.

To avoid the 10% penalty, an employee must separate from service after 55. Do this mean that, in order to aviod the 10% penalty, he must wait until he is 55 to leave employment ? That is, if he leaves employment at age 52 but waits until he is 55 to start taking distributions, can he avoid the 10% penalty?

A sole proprietor established a SIMPLE IRA, completed the salary reduction form and made elective deferrals and matching contributions throughout the year 2002. His accountant has now adivsed the sole proprietor that he had no compensation for the year 2002 and therefore he was not eligible to make contributions to the SIMPLE. What are the options & tax implications? Does it make a difference if the plan was not in existence for 2 years?

If a participant takes out a loan and dies before the loan is repaid, can we write into our documents that the loan is in default immediately upon the participant's death? Cites would be helpful.

If an employer offers health coverage, is the employer required to offer the coverage to part-time employees who have over a certain number of hours? If so, what is that number of hours? Cites would be helpful. Thanks

When an aco****holder dies and the beneficiaries request that assets be put into separate accounts for each beneficiary, how are you doing this? Are you requiring each beneficiiarty to sign paperwork? How do you do that without running afoul of the fact that non-spouse beneficiaries cannot treat the account as their own? That is, how do they sign paperwork setting up the separate accounts and at the same time not treat the account as their own?

Is it OK to use the IRS Model Tax Notice issued early 2002 or does it have to be modified to reflect the proposed regs which were published May 2002?

Please advise your thoughts on how to correct excess contributions/overcontributions to a 457 plan. For example: are they returned to the employer? the employee? And, how are they taxed? Using 1099s? Thanks.

If a participant designates non-spouse beneficiaries for his 403(B), upon the participant's death prior to his Annuity Starting Date, may the assets remain in the plan? If so, can separate accounts be set up for each beneficiary and each beneficiary's life expectancy be used to determine the amounts to be distributed?

Is it permissible to "roll over" MSA monies that are not used by the end of the year into an IRA? If so, please provide cite(s). Thanks.

Do we have to file revised SPDs with the DOL or any other governmental agency? I found two proposed rules issued by the DOL in 1999 saying that the SPDs and SMMs no longer need to be filed with the DOL. Were these finalized?

Assuming that the employee maintained the SIMPLE account for over 2 years, may an employee rollover his SIMPLE IRA into a ROTH IRA (assuming he meets the AGI requirements)? If so, how would this work? Is it automatically considered a conversion ROTH?

Are pre-K costs covered by an Education Savings Account (formerly known as an Education IRA)?

Is it possible for an institution to maintain a Title I 403(B) and a non-Title I 403(B) for the same employees in the same year? An employer that already has a Title I 403(B) is contemplating establishing a non-Title I 403(B) for salary deferrals based only on bonuses.

Are after-tax contributions that are in a 457 plan "Eligible Rollover Distributions"? Cites would be helpful.

Do amended and restated Custodial/Trust Agreements and Disclosure Statements have to be mailed to existing accountholders under Rev. Proc. 2002-10? If so, assuming the Model IRS custodial/trust agreement is used (the documents for new business need to be revised by 10/1/02), when do the documents have to be mailed to clients who established accounts prior to 10/1/02? Cites would be helpful.

Not all state laws automatically conform to changes made in federal law. With this in mind, I'd like feedback about how practitioners are handling the limits in those states which need to adopt conforming laws. Are you going on the assumption that the states will conform? Are you being cautious and not permitting participants to take advantage of the increased federal limits until the state actually adopts conforming laws? Are you still calculating limits using the 3 tiers even though EGTRRA eliminated the MEA portion?

A husband and wife are each covered by their own 403(B) plans. They are getting divorced and will have a court order (not a QDRO) to divide their respective 403(B)s. In 2002, will each ex-spouse be able to roll over his/her alternate payee distribution into his/her own 403(B)? Would the answer be the same if there is a QDRO? Cites would be helpful.

How are the following overcontributions in a SIMPLE IRA corrected 1. employee contributions for current tax year; 2. employer contributions for current tax year; 3. employee contributions for prior tax year; and 4. employer contributions for prior tax year? Cites would be greatly appreciated.

We are a designated financial institution that uses the IRS Model Form 5305-SIMPLE. Therefore we are obligated to file reports with employers by October so that the employer can distribute materials to their employers. One way (and the simpliest) is to send the employer a copy of the IRS Model Form with the Model Notification to Eligible Employees and the Model Salary Reduction Agreement. Based on these documents the employees make decisions as to how much they will contribute next year. The model forms have not been updated for EGTRRA (compensation and salary deferral limits). Has anyone heard when and if the IRS will be updating these forms in time for financial institutions to meet their obligations? Will the dates be extended until the IRS does publish model language? If the IRS doesl not publish in the near future, can we change the Model Notification to Eligible Employees and Model Salary Reduction Agreement to reflect the new limits? I'd also like to hear how other financial institutions are planning on handling this.

Are employers required to permit employees to pay back loans that are in default(that is, loan payments were not made on time and were not made during cure period)? If so, what are the repayment requirements? Cites would be helpful.

Are SEPs and/ or SIMPLE IRAs subject to ERISA?

An employer maintains an IRS Model SIMPLE IRA with a designated financial institution. One of the participants dies. There is a nonspouse beneficiary. The non-spouse bene does want to take distributions over his life expectancy. Is the employer OBLIGATED to keep the participant's account in the plan and permit the beneficiary to take distributions over his life? If so, what is the employer's responsibility with respect to that bene? Keep the account in the deceased's name? Must he track the bene's whereabouts? Give the bene annual statements? If the employer goes out of business or terminates the plan, doesn't that specific plan account need to be terminated along with the others?

If a 403(B) is funded using custodial agreements, is the custodian required to give participants a disclosure statement (similar to disclosure statements required for IRAs?) If not required, is it common practice to do so? Cites would be helpful.

Not if it's a governmental plan or another plan listed under ERISA Section 4(B).