mbozek

Y: the restriction on in service distributions prior to 59 1/2 does not apply to withdrawals of employer contributions from a 403(b) annuity contract. The restrictions on withdrawal apply only to employer contributions to mutual funds (403(b)(7)) and employee salary reduction contributions (403(b)(11).

Making payments under separate IRAs based upon the life expectancy of the each beneficiary is permitted if the decedent's IRA beneficiary designation created separate shares in the IRA for each beneficiary. Otherwise the MRD must be paid based upon the age of the oldest beneficiary.

The withholding tax on withdrawals from a deductible IRA is 10% of the taxable distribution which equals $211. This means that either you or the custodian are mistaken as to the type of account that was opened. You need to check your doucments. See IRS pub 590 for details on withdrawals. The fees are goverend by the terms of the investment agreement.

The fees vary depending on the co and the type of account. For example Schwab charges a $45 annual fee if the IRA has less than 100K and then charges for each trade. Vanguard charges $10 or $15 annual fee for mutual fund accounts under 50k or so. You need to shop around for the best deal for you.

By part of the mortgage do you mean as an itemized deduction? To be deductible under IRS rules the plan loan would have to be secured by a mortgage obligation of the employee, e.g., a formal written document giving the plan a security interest in the residence. This not the same as a promissory note of the employee to pay off the loan. However, the loan amount could not be attributable to employee salary reduction contributions.

Aside from the question of why an employee would turn down a contribution to a retirement plan, there is no prohibition on an employee waiving out of a plan, provided the plan permits an employee to waive. The only question is whether the plan would meet the 410(b) participation standards after the waiver (if this is a NP employer. A public er is not subject to 410(b)). Is the employee a member of a religious order who has taken a vow of poverty? The plan would have to permit the ee to make salary reduction.

EAKarno: This is how I understand the rules apply to LI which is paid to the bene of the employee: 1. If the employer owns the LI and is beneficiary under the NQDC, the proceeds paid to the employer are exempt from income taxation. The payment by the employer is taxes as income to the beneficary and the emplyer claims a deduction. This includes LI held in a Rabbi trust since the employer is the owner of the trust. 2. If the employer owns the LI policy outside of a SD plan and the employee designates the beneficary then the premiums will be taxed as income to the participant and the proceeds will not be taxed to the beneificiary. 3. If the employee owns the LI policy in a SD plan and the employer contributions to the LI policy are not SD loans then the employee is taxed on the premiums to the extent the employee is vested in the premiums and the proceeds will be exempt from income tax to the beneficary. Cite: Final and prop. Reg. 1.61-2(d)(2)(a)(ii); IRC 101(a) I dont see any authority in the regs to support your statement that the employee is taxed only on the economic value of the coverage if the employee is not the owner of the policy. If the final SD regs have a different answer please let me know.

Is this a corp plan? If so how will the plans sponsor be able to claim a deduction if another party makes the contributon? There is no prohibition against another person making the contribution, but the employer's deduction will be disallowed.

If employee was not vested when terminated then benefits will be forfeited and are reallocatd under the terms of the plan. If the employee was vested then he has a right to the accrued benefits- what ever they may be based upon the facts, e.g, only pay for one job can be credited. Conviction or settlement with employee will not cancel benefits. Rev. Rul 81-141(?) holds that vested benefits cannot be forfeited for any reason other than suspension of benefits for rehired employee. Employer could obtain a confession of judgment and have employee assign benefits when they are payable from the plan under the non alienatoin regs.

I think that the payment of the life ins proceeds by the employer to the ee's beneficiary is considered to be the payment of taxable income under IRC 61. However, I dont understand how the payment of LI premiums by the employer under an endorsement split dollar policy where the employer has no interest in recovering any portion of the proceeds is not taxable to the employee. Reg. 1.61-2(d)(2)(ii)(a) provides that life insurance premiums paid by an employer on the life of an employee where the proceeds are payable to the employee's beneficiary are part of the gross income of the employee. Under the proposed SD regs under the above citation the employee is taxed on the payments by the employer to a SD policy where the employee is the owner to the extent vested, if the payments are not SD loans, but I have not reviewed the final regs.

Call the local Employee Benefit Security administraton listed in the phone book under US Dept of labor. The fact the that your employer is not returning calls is a sign that there is something wrong. If the money has been transferred to the trustee or record keeper, then the employer would not delay in letting you know. You can also retain counsel although it will cost you money. By the way what business is your employer in?

I thought that in split $ the employer retains some interest in the proceeds. Can an endorsement $ SD policy be used where the employee's beneficiaries get 100% of the proceeds?

Why cant the attorney stick around to sign the doc. Otherwise check state law for authority of corporate officers to sign on behalf of employer after co is liquidated.

There is no statute of limitations for filing a claim for benefits under ERISA, e.g., missing participant can return at any time and demand payment. There are ct. decisions that allow a plan to put a time limit on the commencement of a law suit after a claim for benefits has been denied by the PA.

I dont know what you think is complicated in filling out a 5500-EZ unless its a DB plan. It isnt rocket science.

I cannot imagine how an individual investor can have any advantage in investing in options when there are so many professionals to trade against. Individual investors do no have the time or dedication to constantly review all the financial information necessary to invest in options. They are much better off investing in less volitile investments such as index funds. You can get good advice on index funds by reading books by John Bogle, the founder of Vanguard funds. I have seen too many clients crash and burn because they fell for some investing fad such as day trading, tech stocks or momentum investing.

I dont know what the answer is but I dont know why he doesnt want to file a 5500-EZ- it takes about 5 minutes to prepare.

Is this offerred to public employees who are in a govt retirement plan?

The amount of the co pay is governed by the providers contract with the HMO or health provider. The provider cannot add an additional charge to the co pay any more than a merchant can add additional charges for a credit card payment. I have had several disputes with providers who tried to force patients to pay additional amounts above the co pay to make them whole. If the provider accepts payment from the HMO then the provider can only charge the deductible specificed in the HMO agreement.

It is my understanding that LI proceeds used to fund a NQ plan are exempt from income tax when paid to the employer and the proceeds are taxed as wages when paid to the beneficiary under the terms of the plan. Is there any way to avoid taxation, e.g. can the proceeds be paid to the employee's beneficiary or paid to an irrevocable life ins. trust for the employees beneficaries if the employer owns the contract?

I thought that 500B was to be this yrs deficit, nbot next yrs. but then who is counting. As far as revenue gain, the tax gains from conversions will be offset by the amount of revenue lost over the next 10 years from distributions and earnings that will not be taxed under the regular tax and 10 % penalty tax.

So What? Yesterdays NY Times carried a front page article which reported that the Pres. would not push for an expansion of retirement savings accounts in the 05 budget because of an estimated 400B deficit for 05. This type of proposal is deliberately put into the FY 05 budget so that it can be eliminated at a later date. There is less support to pass this legislation this year than there was last year. This topic comes under the doesnt have the chance of a snowball in hell category.

You need to consult counsel regarding your claim since you indicated that you signed a release of your rights in return for receiving a severance benefit. If the release is valid you may not be able to make a claim for additional benefits. And as previously noted you would have to prove that the plan violated age discrimination rules or was less than the minimum value prescribed by the IRS. The fact that you received less than you could have recieved under the traditional plan is not in itself a sufficient basis for a claim.

In the unlikely event that the plan is forced to return the profits, the plan would have earned 0% on the funds. If the investment is deemed to be imprudent under ERISA, the fiduciaries would be liable for amount the investment would have earned if it was invested prudently. In otherwords a loss under ERISA does not require a negative result. A loss includes the amount that could have been earned if the funds were invested prudently. If the plan could have earned $20,000 on a prudent return and instead earns 0 because it had to return the entire profit then the fids are liable for a loss of 20k.

Why would the cash surrender value be less than premiums paid? I assumed that the contributions were invested in an annuity policy owned by the er which returned some positive rate although if premiums were invested in a VA then the FMV at the time of nonforfeiture could be less the the premiums. The policy was assigned to the employee at its FMV after terminaton. Are u assuming that the plan took the amount deferred and purchased an annuity contract for the employee after the deferral became vested? If this is a DB plan, the plan should have some formula, e.g. 50 % of pay and the interest rate and mortality table should be in the plan. The PV of the future benefit can be computed on a HP-12c from the factors, e.g, life expectancy can be the 401(a)(9) Life expectancy and interest can be the federal rate. Of course you can always pay an actuary to do the calculation.