Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, June 4, 1990                   TAG: 9006010737
SECTION: BUSINESS                    PAGE: A5   EDITION: METRO 
SOURCE: Mag Poff
DATELINE:                                 LENGTH: Medium

YOUR MONEY'S SAFE

A: Dominion Bank's situation is perfectly safe. It had a deficit for the first quarter because it transferred $70 million of its actual earnings into loan loss reserve. That money is still part of the bank's capital. It is in reserve to offset commercial real estate loans that could go sour. The bank is financially sound and exceeds all current federal standards.

The situation stems from tighter government standards on bank real estate portfolios. All banks will undergo this strict examination sooner or later. Dominion was merely the first to be audited in Virginia. Analysts believe the banking industry will be strengthened in the long run because of the new standards.

Not all savings and loans are troubled. The problems center in places like California and Texas. Only one thrift in Western Virginia falls short of new and higher government standards.

Even if none of this were true, your deposit would be safe up to the current ceiling of $100,000. Every financial institution in Virginia is insured by an agency of the federal government.

Figuring your pension

Q: If you have been employed where there existed a defined benefit retirement plan and then become self-employed and want to open your own retirement plan, what is the formula for deducting the amount in the earlier plan and determining how much you can invest in your self-employment profit-sharing plan?

A: W. William Gust, a tax and pension lawyer with Gentry, Locke, Rakes & Moore, sees no problem involving a deduction.

When you leave a job where you have a vested interest in a pension plan, he said, you can either retain the right to a later pension or receive a lump-sum payment.

If you are married, the payment would be in the form of an annuity.

But if your spouse consents - or if you are single - and if the plan permits it, you can receive the lump sum in a cash payment.

To escape taxes and penalties, you would have 60 days to roll over the money into an entirely new and separate IRA or into another qualified pension plan.

Because you are now self-employed, you can roll over any lump-sum payment into your own qualified plan, Gust said. You have 60 days to set up the plan and roll over the money.

If you fail to act within the time limit, you are liable for taxes and, if you are under the age of 59 1/2, a 10 percent penalty.

Even then, however, you can set up your own qualified plan and make contributions from your self-employment earnings.

Short-term advice

Two Roanoke brokers say they have developed the capability of giving their customers computer assisted short-term trading advice.

An answer in last week's column said no such service was available locally.

Brad Sneed and Gene Freedman, who work at the Roanoke office of J.C. Bradford & Co., have offered the service since last October. Their work is done here, not at the brokerage's home office.