Help! I am trying to find out if there is a maximum legal vesting period for part time employees (half time or greater) who participate in a defined benefit retirement plan.

My employer is a large California utility with a 5 year Cliff vesting provision for full time employees. We are trying to get retirement benefits added for part time employees (half time or greater) and the human resource department is saying that one requirement would be prorated vesting. This could take up to 10 years for a half time employee to get any vesting. This long period seems unfair.

If there is a legal maximum maximum vesting period (or a mandated % vesting), it would GREATLY simplify our current effort!!! Thank yo for any help!

Below is a tiddy except from Motley Fool that I thought the "just getting started" readers would appreciate. MF advice varies, but the writing is always crisp and worth reading.

Motley Fool

By Brian Graney

April 25, 2002

Last week we discussed how to start direct investment plans. The more important issue is when to start.

There's an ad floating around the Internet that poses the question, "Is this the right time to invest?" For folks new to investing, this single question often seems about as daunting as the Riddle of the Sphinx.

Here's the situation (insert hypnotic, time-warp music here):

Let's say that you are ready to make the move up from Fool Junior Grade to Fool First Class. The 13 Steps to Investing Foolishly have been read and committed to memory, those pesky credit cards are all paid off, and maybe you've given a little bit of thought to what to do for retirement. Check, check, check.

What's next?

A little bit of dedicated research about stocks and investing might not be a bad idea at this point. You might read some good books, find out what those stock valuation ratios are all about, form some opinions about a few companies that have caught your eye, and share what you have learned with others on the Fool discussion boards. These are all good things to do.

Meanwhile, days pass, weeks sail by, seasons turn, TV sitcoms come and go -- pretty soon, it's months later and still no stocks. Is this what everyone around here means by Foolishness? Is it supposed to take this long to get started on this investing thing? And, more importantly, is there a point to all of this rambling?

What all this boils down to is the following: Take your time when you are getting ready to invest. If you can't tell a balance sheet from a balance beam, then set aside some time to figure out the difference between the two before plunking your money into your first stock. Learn as much as possible about your investment before it actually is your investment. That way, there is much less chance that your first investment will also end up being your dumbest investment.

Second verse, same as the first: Take your time. If you're Foolish and you want to become an owner in an excellent business for a long time, then there is no rush. Great businesses don't just appear and disappear overnight, of course. And, here's a newsflash -- neither do great investors.

I can hear the collective yawn of long-time Fools at this point, but for investing beginners these things are worth emphasizing (and for the veterans seeking new stocks, a little reiteration never hurts). Unfortunately, the Wise on Wall Street often tend to gloss over ground-breaking concepts such as "learning." Sure, learning all this investing stuff takes time and perseverance. But, like trays of meat by-products being ground into a high-quality sausage, all of your learning will form a solid basis for what kind of investor you want to be. It's a messy process, but it's worth it.

If you are struggling to find your "inner investor," there are lots of places right here at the Fool to seek solace.

{witty - would love to write this well, give this guy a scholarship}

Anyone out there know of any literature that compares different types of plans under the new tax laws. For example, a chart comparing SEP's, SIMPLEs, 401(k)'s Safe Harbors etc....

Thanks for the help

I have been asked to research how to establish a 529 business within the Benefit Services Department of our Insurance Brokerage Firm. The first step is to determine how to become a Broker Dealer or if we want to partner with an established financial services firm that can do this. I cannot find any guidance on line on which way to go with this. I understand that we will need someone that is Series 7 and 24 licensed, but cannot determine what else is necesasry.

Also, I can't find what average fees (load) is being charged on these accounts. Any guidance would be GREATLY appreciated.

I have a CT doctor plan that is top heavy. There is only one owner of the practice.

All doctors except the owner waive participation in the PSP. None of the other doctors are officers.

Are the other doctors required to receive the top heavy minimum even though they waived participation in the plan?

Can employees who work at home (part time or full time) use their employer's DCAP if they send their children to a day care institution while they work?

An S-Corp maintains a leveraged ESOP with a set % contribution (set up as a money purchase plan). According to the plan document, the shares to be released at the end of each plan year are allocated based on compensation to the same participants who are eligible for an employer contribution. However, it nowhere mentions that this allocation counts as a contribution or towards the annual additions.

Should this allocation of released shares count toward the set % contribution (to in effect reduce the employer's deposit), or is it just a gains allocation based on compensation?

A law firm client maintains a profit sharing plan. Several partners made one-time irrevocable elections limiting their contributions to specific dollar amounts (e.g. $10,000). The law firm client is considering establishing a cash balance plan. Are these partners out of luck? I seem to recall a recent change regarding the application of the one-time irrevocable election rules. Any thoughts? Thanks. Ed

EGTRRA has made after-tax rollovers possible. I have read that if someone is rolling after-tax money into an IRA, it can be done through a direct or an indirect manner. However, for rollovers into a qualified plan, it can only be a direct rollover. Can anyone confirm whether or not this information is true? Can there be an in-direct rollover into a qualified plan?

An Actuary I know in CA says that he seems to remember an interview or something by Jim Hutchinson that said that the Service was allowing an exception to the Universal Availability that would permit the exclusion of "catch-up contribution eligible" participant that reside in nonconforming states, from the group of participants permitted to make catch-up contributions.

However, he cannot remember where or when he heard/saw it. I have not been able to verify his information.

Has anyone else heard of such an exclusion?

Also, how are your various firms, that have employees in both conforming & nonconforming states, handling the catch-up contributions?

Thanks

pcjackson

Are in-service distributions of employee elective deferrals allowed if participant has reached early retirement age as provided in plan document? early retirement age plan provisions call for age 55 and 10 years of service.

In one year, can you put $40,000 into a 401(a) plan and $12,000 into a 457(B) plan, both of which are sponsored by the same governmental employer?

Upon leaving my company, can I rollover 401K "after-tax" contributions to a separate IRA, and then convert that IRA to a Roth IRA, without a tax liability. It appears that according to Tax Code 408(d)(1) and(2), that I would be able to, but I need calrification.

I am trying to clear up some confusion regarding the states that have not conformed to EGTRRA. I understand that the extra $500 in 402(g) limits and catch up cont would be subject to state tax until or if these states conform but what about other provisions in EGTRRA like the new rollover rules allowing for rollover of after tax $ and the small bus. plan expense credit for new plans after 2001, would they be applicable in these states or not? Help!!:confused:

we are looking for ideas about how to reduce retiree medical program costs (cash flow, balance sheet accounting). The basis situation is that

- there is a large group of retirees,

- several unions, and

- SPD & plan documents they did not include the ability to terminate the plans.

- currently being reorganized under the protection of the bankruptcy courts (Under their proposed reorganization plan it looks like all creditors will get paid 100%).

We're are willing to consider any ideas no matter how innovative/aggressive.

I am preparing two 5500s to be filed under the DFVC program.

I will be sending the 5500s (w/o schedules) to the DFVC program of the PWBA in Atlanta, GA, along with the check for the penalties and a cover letter explaning the reason for the late filing.

I will send the complete 5500s and schedules to the PWBA in Lawrence, KS where we normally file.

What else do I need to do? Is there anything different I should include with my 5500 filing to Lawrence, KS? Any other suggestions?

Revenue Ruling 92-76 states the following: "The affected employees are the 25 highly compensated employees or highly compensated former employees of the employer who have the greatest compensation from the employer in the current or any prior plan year (“top 25 highly compensated employees”)."

Here and elsewhere, there does not seem to be a distinction between active employees and terminated vesteds on the one hand, and all employees who have ever worked for the company, whether they have been paid out or not, on the other.

I would be interested in perspectives on whether a narrow reading or a broad reading of the Top 25 pool applies.

If I have a non-safe harbor floor-offset plan am I still permitted to test the DB portion on gross benefits w/o regard to the offset, as I understand I'm permitted to do in a safe harbor F-O? The MP/PS plans have to be included in the avg. ben. test. Any other issues?Thank you.

Is there an inherent contradiction when a plan defaults a newly enrolled participant (who made no investment elections) into one of the plan's fund choices - yet claims to be a 404© compliant plan?

Does HIPAA allow, with a family status change, an employee to change from a High option plan to a Low option plan mid year?