smm

My understanding is that if you have multiple IRAs - some with pre tax, some with after-tax, and some with both, you cannot pick and choose which ones to convert to a roth, but have to aggregate them all to determine the taxable/non-taxable portion of the amount that is being converted. In other words, if I have 3 IRAs - one with 10,000 after tax contributions and 2,000 earnings and one with 8000 pre tax and I want to convert the 10,000 after tax to a roth, then I would pay tax on 5000 on the conversion. Is that correct? If so, where is the authority for this in the code and regs. Again, if correct, when is the total value of the IRAs determined? At the end of the year, time of conversin, etc. Thanks.

Hello - For 403(b) purposes, compensation under 415 is defined as "includible comepsnation". Includible compensation for ministers is in turn, defined in the 403(b) regulations as earned income under 401(c0(2). That section refers to 1402 which in in subsection 8, includes the housing allowance. This is inconsistent with everything else that I have read, including the 2001 plr (which was issued before the change by EGTRRA) and is discussed on another thread. Can anyone confirm if I am reading this correctly/incorrectly? Thanks.

I need some assistance in determining a grandfathered amount in a non AB plan. Plan provides that participants receive a pro-rata share of an aggregate amount (determined pursaunt to a very complex and non-discretionary formula that is set forth in the plan). The formula is based largely in part on the compensation paid to all participants in the year prior to the year in which installment payments from the plan begin (which is on termination of employment). (I'm paraphrasing, of course) Plan was in existence during 2004 and all participants were fully vested at all times. Regs say that it is determined as if the participant voluntarily terminated w/o cause on 12/31/2004. Thanks.

NQDC plan says that executive receives an amount in his "account". Each year, account is "credited" with an amount determined pursuant to a formula. Service provider is fully vested -no SRF. Parties want to "amend" the formula? Is that a permissible change? If so, what is the authority? Thanks.

Is anyone aware of a special rule for determining the COBRA premium for a high deductible health plan. I'm thinking of a scenario that takes into account the deductible if it is paid by the employer. Thanks.

I am relatively new to church plans. Why would a church 403(b) plan file a Form 5500 if they are not to do so? I did a search on freeerisa for archdiocese and found 32 that have filed form 5500s - many of which are for 403(b) plans. Thanks.

My guess would be that he did - my sense is that as a current investor, he was happy with the overall return. Why else would he have bothered to apply for an advisory opinion from the DOL on the PT issue?

Why is the church 403(b) plan be exempt from the written plan requirement?

Any insight on whether an extension is on the way. My clients are being bombarded with form documents (many of which are outdated and incorrectly drafted - one actually refers to the "exclusion allowance" and the 402(g)(8) limitation - these documents are being distributed by national consulting companies, REALLY!!). The employers are not being advised of the obligation to make deferrals available to union employees, and those that are, cannot comply in a timely fashion. Small non-profits do not have the manpower or budgets to hire fancy law fims to interpret these documents. I think that the purpose of the regulations was a good idea, but the implementation requires more time and education. An extension was granted for 409A - which was much more complex. It goes without saying that an extension is necessary. Bob Architect, are you reading this?? Also, for those of you who missed the videos, Bob's videos on You Tube are great!!

Bob Architect has a FAQ column on the IRS website. It says that: Churches that sponsor 403(b)s where the obligation to either establish the 403(b) or amend the 403(b) plan itself is an outcome of a church convention. So merely because a 403(b) is sponsored by a church does not, in and of itself, mean that it’s going to experience a delayed effective date but rather, where the authority to amend or establish the plan would be with the church convention. First, what exactly is a "church convention" ( Note, I am about to research this on my own, but any advice would be much appreciated.) Second, I represent several stand alone legitmate churches and synagogues that have a 403(b) annuity and/or custodial arrangements for their employees, who for the most part are not members of the clergy. Is a written document required for these arrangements effective as of 1/1/09? Thanks.

thanks, I thought that was the case but wanted to make sure.

In Notice 2007-62, the IRS announced its intention to issue regulations under 457. I don't recall seeing any regulations. Are they out yet? Thanks.

Thanks for your reply - especially on the July 4th weekend. Why wouldn't a change be subject to the 5 year delay? According to my reading of the regs., elections by both participants and benis are subject to the subsequent election - 5 year dalay rule. Also, if this is a new plan and the participant does not participate in any other plans, isn't the 30 day rule applicable? I agree about the default and if death occurs post separation during distribution.

I'm reviewing a "relatively simple" (LOL!!) deferred compensation plan that will pay employee $XX,000 per year for 10 years when he terminates employment following NRA (no issue there). If he dies before the NRA, the agreement provides that beni gets either the sum of $XXX,000 paid as a lump sum, or $XX,000 per year for 10 years, as elected by the employee. Is such an election permissible?? To the extent it is (and I'm not sure), presumably it must be irrevocable. Maybe it is permissible if made w/n 30 days of becoming a participant in the plan b/c this is a new plan. Any tthoughts on this?? Thanks.

thanks!

Hello! Can someone tell me the most recent version of Corbel's 457(b) document. I'm looking at a 2003 version (copyright 2003 - 9/2003), but I'm sondering if there is a more recent version. Thanks!!

Thank you, MJB, my sentiments exactly. This amendment was generated by a TPA who thinks a 403(b) plan is a 401(k) plan, and is "insisting" that the amendment be adopted to comply with the changes necessitated by the 415 regulations for the treatment of certain types of "severance" payments for qualified defined contribution plans. On a related note, those components of the 415 regulations have been included in the 403(b) regulations and it appears to me, at least, that they apply to all 403(b) plans without the need for the plan to affirmatively elect to apply them (cf. 401(k) plans). Any additional thoughts are appreciated.

I understand that some TPAs (who quite frankly don't understand 403(b) plans) are insisting that their clients adopt a snap-on amendment to comply with the 415 regulations? Has anyone seen one of these? What are you doing about them?

That is an excellent point. I apologize in advance for asking you this, but where does it say that safe harbor plans are deemed to use current year testing. I know that is the correct result, and will look for (and post!!) the cite if you do not know it off the top of your head.

The 401(k) regulations specifically preclude you from permissively aggregating 401(k) plans with inconsistent testing methods (safe harbor and non-safe harbor) for testing purposes. Perhaps this is obvious, but does this provision preclude you from permissively aggregating the plans and test ing them on an aggregated basis using the the ADP test - In other words, ignoring the safe harbor provisions??

Do catch-up contributions receive matching contributins - what does the plan say?

Based on some Q&As that I located online, it looked to me like the IRS said that you can use dual entry dates for disaggregated plans, but not for early participation. I also saw a response at an ASPPA Q/A session from 2004 or so that said that the issue was going to be addressed in the final 401(k) regulations, but it doesn't seem to me that it was. I like the idea of using dual entry dates b/c it makes it cleaner to carve out the group.

401(k) plan with immediate eligibility flunked the ADP test. We are going to retest using the early participation rule and the otherwise exclucable rule to see if either helps. My question is do we use the plan's entry dates to determine who is in the lower (less than one year of service) group for the or can we use the maximum enntry dates under Code Section 410(a)(4). Is the answer the same for both tests? Thanks!!

Your analysis is quite thorough. You mention that the the plan could require the continued participation of the former employee, thus suggesting that the employee is "required" to continue to make contributions in order to tap his prior contributions. Could the plan simply allow the former employee to tap his prior contributions w/o requiring him to make additional contributions? If so, is he limited to the amount of his prior contributions or the entire amount that he elected to defer for the coverage period.

I guess the follow up question is could the Health Care FSA "voluntary" include such a spend-down provision for participants? The employer would be more generous than the statute/IRS requires it to be.