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Bird - It has been studied with institutional endowments several times. The studies show that 50% of the replacement funds under perform the replaced funds. There are also several studies out there that look at skill vs luck of the investment manager (Eugene Fama's is one of the most recent). The studies find that only between 0.6% to 2% (depending on whose study) of the investment managers may be skilled, the rest may just be lucky.

Don't automatically think the spouses each "own" the other spouse's stock. There is an exception under 1563(e)(5) that may apply.

You can ignore the first 6% of eligible compensation contributed into the DC plan for purposes of the combined plan deduction limit, essentially allowing you to put in 31% overall. Assuming the eligible compensation is truly $2,300,000, and if they put in and deduct $420,000 for the DB plan (assuming that is not more than the DB maximum deductible), this leaves $293,000 for employer contributions into the DC plan. Lastly, if this $293,000 in the DC plan does not exceed 25% of eligible compensation in the DC plan, you are okay,

If you're in this business it would be silly not to do it now. We had a guy in our office and I said in 5 years you're going to kick yourself for not doing this.

Catch-22. I agree that the rules are very clear about SHNEC contributions being able to be made 12 months after the end of the plan year, and don't see it being reserved for extraordinary circumstances. I found Mike's reference to *not* ignoring Treas. Reg.1.415©-1(b)(6)(i)(B) here, the relevant part being: This 12-month rule does not change the rule under IRC 415, that employer contributions shall not be deemed credited to a participant's account for a particular limitation year unless the contributions are actually made no later than 30 days after the end of the IRC 404(a)(6) period applicable to the taxable year with or within which the particular limitation year ends. See Treas. Reg.1.415©-1(b)(6)(i)(B). I ignore it (shrug). I don't know whether they just didn't contemplate participants not having compensation in the year following the allocation year, or what, but that's one where I'm going to make them do something about it when they catch it. Plus now we have Tom's posted Q&A as support. (Not that it's a common or even a known problem for our plans, although I can think of one or two that do it "late.")

from the 2010 ASPPA Conference, page 4 (sorry the Q and As were not numbered that year) Q: An employer had a safe harbor election for the plan year 2008. The plan and company both operate on a calendar year. The plan is a trustee directed, balance forward plan. The required 3% contribution was, say, $15,000. Employer does not go on extension; employer puts the $15,000 into the plan in September of 2009. The contribution is not deductible for 2008 (they'll deduct it in 2009). However, under Section 415, it is not an annual addition for 2008, since it was not contributed within 30 days of the tax deadline. However, it is SUPPOSED to go in for 2008 and be allocated for 2008. Is there a failure to provide the safe harbor contribution for 2008? If so, how to correct? (Note, this could also be an issue anytime a QNEC needed to pass ADP or ACP testing is deposited more than 30 days after the tax return due date but within the 12 month correction period under IRC 401(k).) What if the deposit is not made until after 12/31/09 - that is, more than year after the plan year end to which it applies? IRS Response Contributions made after the Section 415 timing date of 30 days after the tax return due date are considered to be annual additions for the following year. However, if consider the contribution a self-correction under EPCRS, it is permissible to relate this back to the earlier year. If the contribution is made after 12/31, you are clearly under EPCRS. [One of the exceptions to the 415 timing rule is an erroneous failure to allocate. See Treas. Reg. 1.415©-1(b)(6)(ii)(A). EPCRS clearly treats post-415-period deposits that relate back to a prior plan year as an annual addition for the year to which it is meant to be paid, but EPCRS applies only after the 12/31/09 deadline. Therefore, there is a lack of guidance for the period between 30 days after the tax return due date and the end of the 12-month regulatory correction period.] ............. Basically I think the IRS representatives were saying if it is a required contribution it is probably reasonable to apply the 415 to the year required, no matter when deposited. Otherwise, you would simply wait until after 12/31 and make the deposit and then you would be ok. this logic of course in many ways makes little sense. If the contribution is discretionary I think you have problems because of the timing.

I think this is another example of how ridiculous the IRS position on this is. Personally, it does not bother me in the least because this can only INCREASE a participant's own savings and INCREASE their match. To prohibit this is so contrary to obvious public policy it is ludicrous. I would love see the headlines. "IRS disqualifies plan for adding auto enrollment and dramatically increasing the retirement readiness of their employees." Could you imagine?? This falls in the same camp as amending the plan to eliminate a 1 year wait for the plan. I truly think prohibiting these sorts of changes is so bass ackwards it's not funny. It's downright scary.

I'm not 100% sure but I think the answer is no as it would change the information in the previously distributed safe harbor notices.

I don't think this is an "ERISA" matter - it's one of state law. A POA grants the holder the right AND power to act on behalf of the grantor of the power (to the extent of the language in the POA). If it is a VALID POA - then the person who hold it, FOR ALL PURPOSES ALLOWED IN THE POA AND UNDER STATE LAW -- *IS* THE SAME PERSON AS THE ONE WHO GRANTED IT. The questions to ask are 1) is it a "valid" POA?; 2) Does the POA grant authority to manage the 401(k) assets (either specifically, or as part of a "general" grant; 3) Is there anything in "sate law" that limits the grant of authority (doubtful, but I haven't research all 50 "quirky" states); and finally 4) Is there anything in ERISA that preempts state laws on POAs with respect to a plan (not that I know of, and virtually all of the service providers I've worked for had "POAs" for some participants - usually a financial advisor).

He may not be a control freak. He may be unemployed, and lazy. (I've seen it.) But to your question, the plan/employer does not make decisions about a POA. Isn't that a matter for the court? No in this case, it's not, because the question really isn't about POA; it's really about the husband asking for rights to control the account (directly). Seems unlikely the plan permits that. (As my momma told me, don't look for ways to help fools make fools of themselves.)

Fidelity's documents allows all sorts of exclusions for all sorts of things. IT's a table where the rows are the comp items (bonus, overtime, etc), and the columns are the sources, with check marks as applicable throughout the grid. There is one column entiled "401k and SH Match", with separate columns for each of profit sharing, Safe Harbor Nonelecitve, Non-Safe Harbor Match, etc.