maverick

That's what I like about this site, someone always has a good idea. My brain must be addled, because I didn't even consider cashing out the life insurance policy. The participant did mention that he did not need the insurance, so that 's the way we will go. Thanks mjb.

Situation: Former employee has a substantial account balance, which includes a life insurance policy (cash value = 20,000). He wants to roll the non-life insurance assets to an IRA, but does not want to take a distribution equal to the cash value of the ins. policy. In addition to lump sum payouts, the plan document allows annual installments. Can he roll the non-life ins. assets to an IRA (2002 annual installment), then take the policy as his annual installment in 2003? Other: He does not have the cash to pay in to the plan to replace the cash value. Yes, I know he might be able to take a policy loan and use the proceeds to pay the taxes. I luv life insurance in qualified plans. Thanks. Maverick

Any takers on this question? Thank you for your support, Bartels & James

Just received the p.s. 58 cost info from an insurance carrier. In addition to the "cost of one year term" they provide "waiver of premium" and "accidential death benefit" amounts. I read somewhere that the 1099-R p.s. 58 amount reported in block 2a is the total of these 3 amounts, but have not been able to find the reference. I think the rationale for including the waiver of prem and AD benefit $$, was these items are "extras," not pure insurance Can anyone help me? Thanks. Maverick

One of my co-workers attended Corbel's advanced penson conference in Chicago last month and asked one of the presenters "Who is responsible for maintaining a plan document after a client leaves?" (i.e., we no longer do the record- keeping). She may have misinterprepted the answer, but here it is anyway. If a client leaves and has tpa X do the recordkeeping, we are responsible for maintaining the plan doc (assuming they don't adopt another sponsor's doc)!! He went on to add that this responbibility goes on for several years (3 or 5, I forget which). Now here's how I think this works, someone please give me a sanity check. - Once a client leaves, he's on his own re: the document. BTW, I have been telling departing clients this in writing. - If a plan terminates, we would make sure the doc has been amended for recent law changes, i.g., GUST, and that's it. Thanks fellow soldiers in the great ERISA war. Maverick

I know I've seen this somewhere, but just can't come up with the reference. Turned 50 in June, so this must be my first "senior moment." Anyway, Joe X works for employers A and B. Can he defer 11k into each plan? Also, is there a separate $40,000 415 limit for each plan? Thanks all. Maverick

Monster, very nice. I'm a car nut, hence the username (own two Mavericks, 1 in pieces, 1 totally restored). As kids we used this expression to ask what's under the hood/how many horses/is it souped up? "How many does she sleep?" We picked this up at a local marina -- one cabin cruiser owner was asking another the berthing capacity of his boat. Time to go home for the day. I'll be able to make it home much faster cause I just got my car's muffler bearing replaced. Maverick out BTW, my car has those factory original floormats, they really make the car fly!

A 57 year old retired client took a 200k distribution from his IRA earlier this year, then "replaced" it within 60 days. A few months later, he took another 200k distribution, and again tried to re-deposit the $$ within 60 days, but the broker refused to accept the funds. The client was told that only 1 of these transactions is allowed per year. Does anyone have a cite that addresses this situation? Thanks. Maverick. p.s. He took the distributions to invest in the market.

Going back thru the old files, I discovered several plans that have been terminated (assets = $0) without being amended to pick up GUST provisions, some going back to 1997 and 1998. Is it too late to have the former plan sponsor sign something like the Ohio Key District's GUST wording? I doubt that we'll be able to bill for this work, but I'm just wondering if this is a "better late then never" situation. Thanks for the help. Tom

Calendar year MPP, client does not want to fund the 10% formula contribution in 2001. Since it's past the date when full-time ees have worked 1,000 hours (non-std plan with 1,000 hour and last day provisions), I don't think he can amend the plan to reduce (or change to 0%) the formula. Is there some way to do this that I may have missed? If not, has anyone ever gone the IRS waiver route, and was it successful? Thanks. Tom

Personally I don't feel life ins. "belongs" in retirement plans. I've worked on d.c. plans at 2 banks and 2 CPA firms, and have had admin problems dealing with life ins. in each job. e.g., - Policy year does not equal plan year - Requirement to complete Schedule A for each policy when preparing the 5500 - Difficulty in getting ins. company / agent to provide policy info necessary to complete schedule A and period-end valuations - If p.s. 58 costs involved, a separate 1099-R must be issued - Accounting for life ins. as a separate investment Ideas if you have a plan that allows life ins. - Charge an initial set-up fee (especially if you have to liquidate other investments to pay initial and/or annual premiums) - Charge annual maintenance fee First post, sorry for long response. That's my 2 cents. Tom