stephen

I am not aware of any ERISA requirement to notify participants that you are changing from a cash match to a stock match. However, it could lead to an Human Resources / Employee Morale problem. Especially, if the stock drops in value or doesn't increase as quickly as the employees other matching investments.

Tom, I'll be there as well and would enjoy meeting you.

My point was that the people setting the rules on the lottery had probably already met the $10,500 limit so they would be unaffected by the "lottery" even if their names were chosen.

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

Does 404(k) allow a deduction for passing through dividends attributable to unallocated shares?

Congratulations to both of you on passing. I was studying to take the C-3 and ended up getting a new job. With the new job came many new responsibilities and therefore I stopped studying to focus on my new position. I do plan on taking the C-3 exam within the next year.

It has been my experience with both the C-3 and C-4 exams it is somewhat of a shot in the dark when studying for the exams. You have to cover way more material that they could ever test you on. Perhaps more frustrating is the fact that when you get your score (say it's a 6) you don't get any advice regarding what you needed to add to your answers to raise that to a passing score or even an example of what a passing answer is.

I am interested in getting information/ideas regarding semi-annual or quarterly reviews. In the past we have done employee reviews on an as needed basis with no real form (it's a small company). I would like to get samples of employee review worksheets.

We request annual census information along with officers, ownership %, 5500 questions, distributions, contributions, etc at each year end. Basically it's a form letter and a fill in the blank questionaire. For the most part the clients fill them out sufficiently, however, there are always clients who leave a lot of blanks...

Have you considered using an ESOP transaction to help with the purchase? I'm not sure of the specifics involved but if the owner sold at least 30% of the stock in the company to the ESOP he could put the proceeds into a tax deferred account until he started withdrawing the funds (1042 transaction)

Yes.

Assuming the Law Firm currently requires Last Day and 1,000 hours to receive a profit sharing contribution, could they not drop the Last Day provision (this would be increasing benefits not cutting them back)?

Can you charge the particpants for the $2,000 set-up cost? (I do not think so) [This message has been edited by stephen (edited 01-27-99).]

Generally in order to receive a substantial raise an employee must quit and go elsewhere for employment. Then the company has to train and pay someone more than they were paying the original employee to come in and do their same caseload. Why do companies do this?

The matching contribution would be $975 per quarter for a total of $3,900 for the year. However, if there are forfeitures, profit sharing contributions, or other employer contributions the individual section 415 (25% of compensation) could be reached and you would need to refer to the document as to how to make the correction.

Why not use prior year adp/acp? Unless you have persons becomming hce's due to ownership during the year you know who your hce's are and you know the maximum % they can defer.

404 limit still applies Ex: 100,000 Compensation -10,000 Cafeteria Contribution -10,000 Salary Deferrals 80,000 Considered Compensation 20,000 Salary Deferrals divided by 80,000 Considered Comp. = 25% which is greater than the 15% allowed in a 401(k) plan. [This message has been edited by stephen (edited 10-17-98).]

Our firm is establishing a formal training program for employees hired that are new to 401(k)/Pensions. We currently are thinking of hiring trainees in groups of 3 or 4 and sending them through a "training school". Does anyone have a program that works at their firm that they would be willing to share ideas?

Roll your 401(k) into a regular IRA. Then you will still be able to take out the money for your downpayment as you desired.

It seems to me that you could calculate the percentage of compensation for all participants that would equal $500 per participant then allocate it $500 per participant. Example: You have 10 employees whose total eligible compensation is $500,000. You need 1% of the $500,000 to equal $500 per participant.

I believe the self employed indidual has until he files his personal taxes (with extensions).

Datair has a windows based program in beta testing. I am not sure when they expect to release it.

They have a balance, therefore they are a participant, albeit inactive.

The two plans involved are sponsored by the same employer (daily 401(k) plan and a money purchase plan). The former employee (Terminated June 1997) would like to roll their Money Purchase balance into the 401(k) Plan. The 401(k) plan allows for rollovers from other qualified plans. Is there any reason not to allow for the rollover?