Appleby

BISYS has indicated that their online reference center is currently being overhauled and should be completed in February 2004. They will provide us with access to the Demo at that time.

In the year of death, the RMD is calculated as if the retirement account owner is still alive, i.e. using the Uniform Table or if the spouse is the sole primary beneficiary and more than 10-years younger than the retirement account owner, the Joint Life table.

I have been using the BISYS (formerly known as Universal Pensions) reference material for 6-years (3 years online). I also use the Panel Answer Books (Panel Pension Library Deluxe)- never leave home without my online access information. The Panel Answer Books may be more suitable for sjb’s needs—i.e. experienced TPAs who need in-depth reference material on Plan Administration etc. among other things… because of the information it includes about non-qualified plans, ERISA litigation and the numerous examples of Precedential Decisions etc. etc. The BISYS reference material is more ideally suited for an IRA Custodian and/or Prototype sponsor that provides technical and administrative support (including 1099-R and 5498 filing) on their IRA and qualified plan products in a call center or Bank environment. The BISYS material includes information from “ How much I can contribute and/or deduct”—“How can I establish an IRA or a QP” to explanations of controlled group, SLOB, testing. BISYS will be sending me information on a Demo and has given permission for the access-password ( to the Demo) to be posted on this site. I should receive it shortly.

I agree. Treas Reg § 1.401(a)(17)-1(b)(3)(iii)

You are right…For the combined defined benefit and MPPP, the maximum deductible limit is the greater of the 25 % (for the MPPP) and the amount required to fund the defined benefit plan…as far as I know, there is no way around paying the 10% excise tax on the non-deductible required contribution to the MPPP…

Absolutely. Contributions and deduction limits will then be based on compensation paid during the fiscal year. As you may know, the applicable compensation cap is that which is in effect in the calendar year that includes the beginning of the fiscal year. For example a plan that operates on a May to April…for the plan year May 2003 to April 2004, the compensation cap of $200,000 would apply- not the 2004 compensation cap of $205,000

The target date for posting the final is 15-DEC-2003

The draft version is available http://www.irs.gov/pub/irs-dft/dw4p_04.pdf ...

The TPA is correct. The only assets that can be contributed to a SIMPLE IRA are SIMPLE contributions and/or transfers or rollovers from other SIMPLE IRAs. Notice 98-4 For SIMPLE 401(k)s, only SIMPLE 401(k) contributions are allowed… 401(k)(11)(B)(i)(III)

In the spirit of the season... http://www.investopedia.com/articles/00/xmas.asp

Some additional info http://benefitslink.com/pr/detail.php?id=36755

Here is the URL to rev proc 2003- 72 http://www.irs.gov/pub/irs-drop/rp-03-72.pdf

Further, the IRA Custodian is required to report SEP contributions in the year they are received, regardless of the year they apply to (IRS Instructions for filing form 5498). mbozek...Isn’t the correction be available under the VCSEP program- namely the Exclusion of eligible employees from employer contributions . Also, the IRA Custodian should be able to accept in excess of the $40,000 for the year. Remember, even without the correction, they should be able to accept $80,000 for 2003, given that contributions for 2002 and 2003 can be made in 2003, and contributions must be reported in the year made. The contributions must be adjusted for earnings. Tell the Custodian the reason for the contribution, better yet- write them a letter of explanation; include a reminder that the administration of the SEP is the employer’s responsibility, not the Custodian’s and that should they stand in the way of correcting any plan defects…etc.etc.

Agreed. The resident alien is treated no differently from the US citizen for withholding purposes. Therefore, if the distribution is rollover eligible, 20% federal tax must be withheld if the distribution is not processed as a direct rollover….Remember that Pub 515 applies to non-resident aliens ---for withholding rules for resident aliens see Form W-4P instead. Only a non-resident alien may waive the 20 % withholding at which point, he/she will be subject to the treaty rate, providing the requisite documentation is provided. I am curious about the W-9. Usually these are not provided for retirement plans- only non-retirement accounts; although there is no rule against obtaining it as certification of the TAX ID # as far as I know... Are you requesting it just because the individual resides overseas?

The BISYS reference service is good too-especially if you handle the operational aspects of IRAs and qualified plans. Very user friendly. Excellent for beginners and seasoned professionals. http://www.bisysretirement.com/catalog/eresource.asp

Your are right. No penalty will apply for 2003 providing the excess is removed by the 2003 tax filing date. Bear in mind that excess Roth IRA contributions are deemed allocated to the next year’s contribution until removed or the total is allocated. So if the individual was eligible for a Roth IRA contribution for 2002 and did not contribute, then $3,000 (or the amount he/she was eligible to contribute) would be deemed a 2002 contribution. Therefore, the individual may leave the $3,000 in the Roth IRA, remove the remaining excess, and will owe penalty on the excess – the 2002 contribution

Don’t you hate the fact that they issued this so late? Most IRA practitioners already completed their programming for 1099-R. Hopefully, their rules engines were built with soft rules which can be easily modified

You are right. It will be treated in the same manner as if you purchased the security today. The period during which it was held in the IRA is disregarded.

WDIK is right. A partial rollover is allowed. Also, making up the taxes that were withheld is optional. Rolling over only the net amount received just means that the amount withheld for taxes will be treated as ordinary income, subject to income taxes and the early distribution penalty – unless an exception applies. The rules regarding rollover of IRA assets to qualified plans were also changed under EGTRRA. It is no longer limited to conduit IRAs (IRAs holding assets that were distributed from a qualified plan and have not been commingled with other assets). Amounts that cannot be rolled from an IRA to a qualified plan include non-taxable amounts, amount representing RMDs, or other amounts that are not rollover eligible- for instance an ineligible (or excess) contribution to the IRA

The rules were changed under EGTRRA 2001. After tax amounts can now be rollover. If the after-tax amount is being rolled over to a qualified plan, it must be done as a direct rollover. Regarding deleting to repost- I understand the need to correct – but it does make the person/s who responded to your first post appears to be crazy as it seems they are responding to/commenting on a comment that was not made here. It may be better to edit your post ( before a response is made) and if a response was already made to your comments, you may consider posting a follow-up or clarifying comment

See Treas Reg § 1.416-1, Q&A T-17

Participant in a 457 plan does not result in one being an active participant . IRC 219(g)(5)

The ineligible rollover to the IRA becomes an IRA excess contribution and should be corrected as such- i.e. a distribution (return of excess contribution). The 1099-R for the IRA will reflect the amount as non-taxable (zero in Box 2a). However, if earnings accrued on the ineligible rollover amount while it was in the IRA, that amount must also be removed and is reported in Box 2a as taxable. Losses are also taken into consideration; which means that the amount removed from the IRA could be less than the value of the rollover.

For Roth IRAs, excess accumulation would occur only for beneficiaries. For instance, if a beneficiary inherited the Roth IRA assets and elected the five-year rule for distributions, then assets remaining after the expiration of the five-years would be subject to the excess accumulation penalty. For 1.408A-4 Q&A6 , see the final Roth IRA regulations at http://www.rothira.com/rothregsf.htm

For free at www.72t.net and with more features than most of those that costs