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If the author is trying to say loans aren't double taxes his does a very poor job of it. Here is what he says right before the part quoted above: Example Loan origination: $10,000, no tax impact Loan payback: One $10,000 payroll-deducted after-tax payment. $13,333 in gross earnings needed to realize the $10,000 after-tax payment resulting in $3,333 in taxes attributable to the payment. Distribution of this $10,000 at retirement: $10,000 taxed at 25% resulting in $2,500 in taxes. The total taxes paid on the $10,000 used for the 401k plan loan and then distributed at retirement are $5,833 (58%), more than double the amount of $2,500 (25%) that would be paid on a $10,000 distribution at retirement. I think any reasonable read of the whole thing leaves you believing that your effective tax rate of a loan is 58% vs 25% if you had not taken the loan. If he thought those numbers were wrong he can have said they are wrong and why in the next paragraph. However, sorry if this guy is upset that he is getting so much attention after his web page got noted in your newsletter. I fully admit I sent him an e-mail calling out his math. My intention was not to get a guy mad at Benefitslink.

who's on the "plan committee"? HCEs who are deciding whether they give themselves a contribution? Or peers with HCEs are telling the committee what they personally would choose? Or subordinates to HCEs who could be influenced? Is the plan committee truly arm's length away when deciding which HCEs get the contribution? As for age, as long as there isn't disparate impact (say you chose the lowest comps and those are all or mostly youngest, that would still be age discrimination just indirectly). Because changing the group of NHCEs can still get discriminatory if you aren't very very careful. But honestly I think is too aggressive and wouldn't suggest it. Just too many places for this to go wrong.

Dont get me wrong, I have nothing against HR or the function they fill. I'm not saying they do it maliciously or even because they want to. It is just their responsibility to nip things in the bud. Which in BGs case happens to be butt nekkid rolling in cash