I am trying to decide between my company's 401(k) or 403(b). We have 401(k) matching contributions of 3 percent if we put in 4. Company contributions are not vested until 3 years of service. I do not plan on being here for 3 years. If I take the matching contributions and lose it when I leave, who gets to keep the earnings from the matching contributions? Will they get back only their contributions and not any money earned from it or do they get both?

Thanks,

Stacey

My company paid 100% of my tuition a year ago. Because I was a "temp" employee they were only supposed to pay 50%. I didn't know this until the next time I was reimbursed - about 5 months later. The HR woman noticed the mistake, but said it was their error.

Now that I am entitled to the 100%, and am waiting for payment on 2 classes, the same woman is trying to get the overpayment back from a year ago because they were audited. She also cannot show me in writing where this is legal. Is this legal? It was their error, and it was a year ago. Is this legal?

A little birdy told me that for purposes of eligibility to participate in a 403(b) plan, TIAA-CREF will credit prior participation in another TIAA-CREF-related 403(b) plan. In the context of a plan with a year of service requirement, this alleged policy would carry over years of service under another, unrelated plan and credit them against the service requirement in the new plan.

I am confused by this because I am not sure how TIAA-CREF can impute years of service from one employer to another, unrelated employer, at least not for purposes of their plans (which, despite the long arm and undue influence of TIAA-CREF, are nominally sponsored by other entities, not TIAA-CREF). I guess it is possible (or maybe not--haven't thought it through) for an employer to count years of service for unrelated employers towards its plan's service requirements, although I suppose you'd have to do so uniformly. Not sure why you'd want to do that, unless you wanted to let a new employee into the plan more quickly. Dollars to donuts, that new employee would be highly-compensated, too.

All I can come up with is that TIAA-CREF would prior credit years of participation in TIAA-CREF investments toward any eligibility requirements that it imposes on investment products it offers under another plan that an individual subsequently participates in.

Anyone ever heard of this "policy" and if so, what gives?

Thanks!

Notice 2005-1 is confusing me as to 457(f) plans (among others!). What is the effect if 457(f) sponsor rolled risk of forfeiture prior to enactment of 409A, but next vesting date is at point after 1/1/05 (under 457(f) and 409A)? What can be done to mitigate problems to the extent there are any?

Thanks.

tpa recently received a request from a child support enforcement agency to provide a participants account balance statement for an impending qdro.

is the tpa required to provide this information? or is the tpa required to protect the information unless instructed otherwise by (1) a court order or (2) the participant's certification authorizing its release?

any input is appreciated.

Is it allowable to base the Facts and Circumstances test on benefits but base the average benefit percentage test on allocation percentages??? Thanks.

if the participant is from DC and receives a distribution from their 401(k), do you have to send a copy to the district of columbia?

Previous to the American Job Creation Act - 2004, a leveraged ESOP in an S-corporation could use distributions on unallocated ESOP shares to repay a plan loan, but not allocated shares. The AJCA changed this by allowing distribution on either to be used to repay a loan, just as in C-corporation ESOPs.

In a C-corporation there are special rules for the exclusion of interest paid on a plan loan when testing for annual additions (415©(6)) as long as no more than 1/3 of the contribution is allocated to the HCEs. This use to only apply to C-corporations.

My questions is did the AJCA change this 1/3 rule to now apply to an S-corporation as well as a C-corporation?

Hello. I am administering a large plan, and it's my only large plan. Do I understand the 5500 instructions correctly: if a plan (no matter of size) is "fully-insured" it does not need to have an independent audit?? If it is NOT fully-insured, a large plan MUST have an independent audit.

Am I correct? Any words of advice on this are GREATLY appreciated!

m.o.

Is it true that a new plan that grants past service and has more than 100 participants does not have a deficit reduction contribution in the first year of the plan because the plan did not have more than 100 participants in the prior plan year (the plan did not exist in the prior year)?

Company A wants to provide a 10% of pay unfunded defered comp plan to those who provide services to the employer even though they are employees of unaffiliated Company B. Is this acceptable? Would this be exempt from ERISA?

Hello:

I am stuck on what I initially perceived to be an easy question. Plan requires One Year of Service and Age 21 for eligibility.

Participant completes his One Year of Service by completing 1000 hours in the initial 12 months of employment. He never reaches Age 21, and terminates service.

He is rehired on a later date about 2 years after terminating, and upon his rehire is now Age 21.

Does he enter the Plan immediately? Or does he now have to complete the One Year of Service again, at which point he would enter the plan at the next entry date?

I find a Q&A on the same subject where the employee completed his Year of Service in 2002, but then had two subsequent years where he did not complete 1000 hours but remained employed, and then turned 21 in 2004. He is deemed to enter at the next entry date after turning 21. The termination of service in my example is hanging me up.

Any insight/feedback will be greatly appreciated.

Andmik

I just received a brochure for a SunGard Corbel "Nonqualified Deferred Compensation Plan Workshop". Given the recent changes in this area, including the new I.R.C. Sec. 409A, I'm very interested in the program.

Is anyone planning to attend this workshop?

Do you have any thoughts or suggestions?

If you and I both attend, will you have lunch with me?

If applying the prior year method for ADP/ACP testing, if a plan gives a match during 2002, skips the match for 2003, and recommences the match for 2004, does that imply that any match received by the HCEs is going to automatically fail the test if they receive an allocation?. Sounds unfair to me for the HCEs. I tested a plan and I shifted to pass, but was not sure if thats the only way without going current.

Plan is cross-tested.

401k eligibility is immediate entry

Profit Sharing has a 2 year wait and allocation are based on compensation from date of entry.

When running the average benefits testing with permissive disaggregation for statutory exclusions, shouldn't the ABT use eligible comp for 401k purposes, since this is the lowest age/service condition? For eligible participants who receive a profit sharing contribution, their AB% is being determined on their partial compensation (which was used to calculate EBARs).

Thoughts/suggestions?

Did you ever realize that the only time in our lives when we like to get old is when we're kids? If you're less than 10 years old, you're so excited about aging that you think in fractions. "How old are you?" "I'm four and a half, going on five.”

You get into your teens, now they can't hold you back. You jump to the next number ... or even a few ahead. "How old are you?" "I'm gonna be 16!" You could be 13, but hey, you're gonna be 16! And then the greatest day of your life … You BECOME 21. Even the words sound like a ceremony.

But then you TURN 30. (Makes you sound like bad milk.) You BECOME 21, you TURN 30, then you're PUSHING 40. Whoa! Put on the brakes ... it's all slipping away. Before you know it, you REACH 50 ... and your dreams are gone. But wait!!!

You MAKE IT to 60. You didn't think you would!

So you BECOME 21, TURN 30, PUSH 40, REACH 50 and MAKE IT to 60. You've built up so much speed that you HIT 70! After that it's a day-by-day thing; you HIT Wednesday! You get into your 80s and every day is a complete cycle; you HIT lunch; you MAKE IT to 4:30; you REACH bedtime.

And it doesn't end there. Into the 90s, you start going backwards ... "I Was JUST 92." Then a strange thing happens.

If you make it over 100, you become a little kid again. "I'm 100 and a half!" .

These simple suggestions will help us all be youthful for life.

1. Throw out nonessential numbers. This includes age, weight and height. Let the doctors worry about them. That is why you pay "them!"

2. Keep only cheerful friends. The grouches pull you down. 3. Keep learning. Learn more about the computer, crafts, gardening, whatever. Never let the brain idle.

4. Enjoy the simple things.

5. Laugh often ... long and loud. Laugh until you gasp for breath. .

6. The tears happen. Endure, grieve, and move on. The only person who is with us our entire life, is ourselves so Be ALIVE while you are alive.

7. Surround yourself with what you love whether it's ... family, pets, keepsakes, music, plants, hobbies, whatever. Your home is your sacred refuge.

8. Cherish your health. If it is good, preserve it. If it is unstable, improve it. If it is beyond what you can improve, get help.

9. Don't take guilt trips. Take a trip to the mall… even to the next county ...to a foreign country, but NOT to where the guilt is.

10. Tell the people you love that you love them ...at every opportunity.

Client contributes the 3% throughout the year and of course always makes errors. The largest error for '04 entails an overfunding of about $1200 for the SH for owner. Does he forfeit this amount plus earnings, thereby reallocating as PS contribution? Thank you.

Prior recordkeeper incorrectly restated a 401(k) plan as a profit sharing only plan and did not provide for predecessor service. The effective date of the restatement is 1/1/04. The plan year is calendar year. Can we restate and fix retroactive to 1/1/04? Does this fall under the general remedial amendment period rules which allows us correct by tax return due date?

An employee is covered under the employer sponsored HSA but the HSA has no family coverage. Can the employee participate in the employer's FSA to cover expenses incurred by his/her dependents (that are not covered at all by the HSA)?

We have an employee who was in a class not eligible to participate in our 401(k) plan when she was hired. She worked under 500 hours and terminated August 2004. She will be rehired in August 2005 and will be in a class eligible to participate in the 401k plan. Eligibility for the match portion of the plan is 1 year of service. The plan has semi-annual entry dates and no break in service. Should her prior hours be counted towards eligibility for the match?