GMK

I agree with Kevin C, primarily because of the copyright issues. If the new policy doesn't stop the carpet bombing, I recommend using "Ignore Posts" under My Controls (credit to Chaz for pointing it out). It's currently my favorite optional feature of the boards.

I'm missing something here and don't think I'm much help. I don't quite get this idea of saying that you're paying participants over a 5 year period but rolling all the stock into the IRA at once. I understand that this locks in the stock price and the 2.5% interest rate, but I don't understand what happens to the stock secured by the ESOP's note. Is it like in a suspense account in the ESOP with 1/5 of the shares released each year and allocated to then current participants? And as others asked before, what guaranty is there for the note? Who pays the interest? And I don't see how the 100% rollover with a note is better than 20% rollovers each year. OK, you want to lock in a stock price (and interest rate) in case the stock value goes up a lot over the next 5 years. But if business gets good (and we all hope it does), then there'll be money to do the buy-backs of the 20% per year rollovers without a Note. If business gets really good, you don't have to wait 5 years to finish the distribution. If business lags, the stock price will likely drop some, saving the company on the distributions in later years (which the participant would like to avoid, and may foresee). There are probably other factors that I don't know to mention, and I wish I could be of more help. I think it's back to the ERISA lawyer for an opinion.

This may help: http://www.irs.gov/pub/irs-drop/n-09-68.pdf

Sweeet! Hooray for tmills.

I think you're right. My only issue with it is that it will encourage too many participants to defer no more than 3% (and many will think that's enough), when they ought to be working their way up to the 8-12% range to have a decent retirement income. But I digress.

I like the original policy better when the clarification about government documents is included. Delete one word from the article and it's not the "full text." And I think he'd play that game. edit: typos

So the IRA will accept a note from the ESOP. I don't see how that works (but maybe it does). Does the note require interest payments to the participant's IRA account? Personally, I would look for an alternative solution, one that puts cash into the IRA. If the distribution is to be spread over 5 years, can you roll 20% of the stock each year and buy it back with the cash you have? At least it doesn't take out the whole $814k in one year. ESOP's can take out a loan to acquire company stock. Can that be done in this case? And this circumstance is not going to go away. An S corp with an ESOP needs to do some estimating of future cashouts and plan for having the money available.

I think that an exception for reprinting sections of the regulations would be OK. That is often very useful. Otherwise, I like Mr. Baker's policy. Reprinting copyrighted material generally requires the expressed permission of the author (or the publisher to whom the author gave the rights). There's no need for us to be messing with that. The other issue is how to define "reasonably-sized." We've all seen certain reprints posted that are one paragraph long, but go for 40 lines or more. Links get us to previously published material in most cases. I don't know the reason for this new policy, but I can see a few reasons to support it.

This point, which was also mentioned in a previous thread, is worth highlighting for anyone who missed it.

Another excellent resource for books and magazines on investing is the free book store (known in many places as the public library ).

Skip to the last post (#13 by mbozek) in this thread: http://benefitslink.com/boards/index.php?showtopic=39188

Check the plan document regarding whether the off-spring of primary beneficiaries who pre-decease the participant are considered. Generally, contingent beneficiaries are considered only after all primary beneficiaries are gone. And "equal shares" generally means that surviving primary beneficiaries split the benefit equally. You usually need additional words in the beneficiary designation to bring off-spring into the picture. But again, check the plan document.

For me, the degree of funniness depends on who picks the fund company to receive the rollovers and who provides the guidance and advice on rollover fund options. (I doubt that the answer to either of these is the TPA.) Still, there remains the issue of who gets an advantage from the assets of the plan. Kinda like revenue sharing, which quacks a little like a kick-back if the plan doesn't put it back into the accounts of the participants invested in the funds that pay the revenue sharing. But maybe I digress.

I appreciate your posts, and you caught me off guard for a minute. But the real question is why are you typing responses here when it's 70 degrees on a Friday in February? We got to 50 yesterday, which significantly reduced the snow mountains on the lawns, but 70!! wow.

Maybe this, including the appendix listing at the end, will help: http://edocket.access.gpo.gov/cfr_2002/jul...520.104b-10.htm

Generally a good point, but is this what you mean? Do you need a cafeteria plan for the employer's share to be federally exempt?

There is no flaw in obsessing about getting the details right in these matters. (I think Ben Franklin said that ... maybe. )

As Kevin C said, we hope this was an honest mistake, and that the employer jumped into this without realizing that "simple" in the name doesn't eliminate some complexity in the plan administration. In any case, the employer needs knowledgeable advice now, whether he "shuts it down" or not. Good for you in providing the employer with factual information, and thank you for keeping us informed. The "Your Rights under ERISA" section of the SPD doesn't seem so boring any more.

Yup.

For one, you need to read the eligibility section of your POP document to see if it allows up to age 26 persons, or needs to be amended. edit: or up to age 27 in some locations.

ESOP guy is correct. I was focusing on the pre-'87 part. See post #7 in this thread: http://benefitslink.com/boards/index.php?showtopic=44078

After-tax dollars contributed before 1987 can be taken separately and are not taxed. Earnings on those pre-1987 contributions can be rolled separately (and taxed later when they're taken out of the IRA). For contributions after 1986, distributions are a proportional mix of after-tax (contributions) and pre-tax (earnings), so you can't split them up. And check that whoever gets this part of the rollover will accept and separately account for the after-tax portion, so the participant isn't taxed again on the after-tax portion.

Does the company consider him terminated, process termination forms, etc., and take him off the payroll list when he goes on WC?

Side issue: Does the plan document allow for such a loan, and if so, is the amount available for a loan sufficient? And in any case, for all the reasons listed above and more, the plan administrator cannot consider the idea until the divorce decree is changed to eliminate the 401(k) DRO part.

I don't think anyone is saying that the employees are paying the full premium. Most likely, they're not. But those on COBRA do pay the full premium. I think the company's rationale for the discount to those in a stop smoking program is the same as it is for any financial incentive to participate in a wellness program. Long term, the hope is to have healthier employees whose productivity is not degraded by bad health and whose medical costs (a factor in insurance rates) and sick time absences are reduced.