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Employer uses "lottery" to select HCEs who must stop making


Guest SJPrince
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Guest SJPrince

Ooops I mispoke.

I now have the letter that went to these lottery winners in front of me. I see they weren't asked to sign anything specifically. The pertinent parts are:

...."the Plan has decided to cut-off the deductions for the HCE's for the remainder of the Plan year. Your deduction will automatically resume in 2001 at the percentage level you have you have currently designated unless you adjust it. You will receive information confirming the reduction of your contribution directly from...." (the Plan administrator).

This was only done to those HCEs who won this lottery.

And yes I agree that somehow this smells... You put exactly what I was thinking re: those who have deferred the most may be the ones protected by this lottery.

and Greg, you crack me up!

thanks!!!

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Guest SJPrince

Oh Tom... re: the bonus? Remember these are union employees.... the ones who werent elig for such a make-up bonus would SCREAM if they didn't get one also haha.

I see what you mean though. If there was a way to make it up that would be great. But I don't see how the union ees would let that happen. Of course everyone would prefer the company kick in some QNECs haha.

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  • 2 weeks later...

So employees were forced to stop deferring without signing an election to change their deferral percentage to 0%?

And this was done at random- with certain employees who had already reached their deferral limit for the year probably at the $10,500 limit making the decision to put this "lottery" in place...

Keep in mind this is the same group of people who would receive their deferrals returned first... (as refunds are made from the top dollar amount not the top deferral percentage...

I'd think you should be able to contact the DOL and have this resolved saving yourself the attorney costs or perhaps you could contact the "board" that made this decision and let them know you are considering contacting the DOL.

I'll be interested to see how this turns out.

Stephen

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Guest SJPrince

Actually Stephen they had not reached the $10,500 limit yet... just were HCE's chosen at random to stop deferring.

Thanks though

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