Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, July 17, 1995 TAG: 9507180122
SECTION: MONEY PAGE: A-8 EDITION: METRO
SOURCE: MAG POFF
DATELINE: LENGTH: Medium
I have attached letters and court orders that I have received relating to my situation, letters that are ``gobbledygook'' to me.
In the 1970s, I worked for Colonial Stores Inc. in Norfolk. I was vested in its pension plan at the time I left the supermarket chain in 1979.
Sometime in the early 1980s, Colonial Stores was acquired by Grand Union in an unfriendly takeover. It was contested in the courts, but Colonial was swallowed up and was no more. Grand Union operated the distribution center in Norfolk and the stores under Colonial's name of Big Star for a while. Then Grand Union closed the whole ``shebang,'' distribution center and stores, and disposed of everything.
Can Grand Union, after acquiring all of Colonial's assets, now rid itself of Colonial's pension obligations? I started receiving a check for $86.71 each month when I turned 65. I am now almost 77 years old, and this small check is a big help to me.
A: Donald J. Potter Jr. of Financial Strategies, a Roanoke pension and investment consulting firm, read your papers and discussed them with you. He said you were required to receive the notices and court orders, which are difficult to interpret, because you are a creditor of the company. The proceedings do not affect your pension, which you have, in fact, continued to receive.
Potter said the law requires that pension funds today be set up in a trust separate from the corporation. The pension money is safe from personal or corporate creditors, and it is administered by a trustee. Under current law, even a bankruptcy does not affect the separate pension funds.
He concluded that your pension is in no danger.
Self-employment in question
Q: I work for a nurses' registry that gets me all my jobs. They say we are self-employed, but we have to pay them 10 percent of what we make, and we are responsible for all taxes. This is putting them on the easy road. I don't believe this is legal. Is the 10 percent still considered our wages to be claimed on our tax forms, or what? I believe this money is being claimed twice, by me and by the registry. Since the payees call the registry for our services, would it be better for them to pay the 10 percent to the registry and not include it in our pay? Then we would not have it on our yearly income since it's not ours to spend to start with. I would also like to know how the payees are required to pay Social Security and Medicare taxes but not to take out federal and state tax nor my share of Social Security.
A: You should call the federal Wage and Hour Administration to discuss whether you are an employee or self-employed in light of the specific circumstances of your case. The phone number is in the United States Government section of the telephone directory under Labor Department. Two tests of self-employment are whether you can accept or refuse a job, and whether you work without specific direction.
The money you pay the nurses' registry can be deducted as a business expense on your tax forms, along with other costs of being in business for yourself. If you are self-employed, you must pay estimated taxes each quarter. If you have trouble setting up your tax payments and record-keeping for expenses, you should visit an accountant one time for assistance in creating a bookkeeping system.
Qualifying for Legal Aid
Q: We are deciding whether to go to Legal Aid for help. What approximate income must we have in order to be able to use that service?
A: Linda Mann, spokeswoman for the agency that provides free legal services for low-income families, said the income limits vary with the number of people in the family. The guidelines, based on 100 percent of the federal poverty level, generally change each year to allow for inflation.
The 1995 guidelines are an annual income of $7,360 for one person, $9,840 for two people, $12,320 for three people, $14,800 for four people, $17,280 for five people and $19,760 for six people. You add $2,480 for each additional family member.
Mann said the figures include full household income.
The agency's telephone number for further information is 344-2088.
by CNB