GMK

Chaz - I see your point. As I read it, the subsidy continues for COBRA continuation dental coverage premiums even when one becomes eligible for a stand alone dental plan, which is different from the case of medical coverage. Whatever intention Congress had, I think the loss of eligibility rules for the subsidy are meant to focus on the big issue (medical coverage) without requiring us to keep track of whether or not the person is still eligible for a subsidy for each of the other smaller parts (dental, vision, etc.). In cases where medical, dental, vision, etc. coverages are each under a separate policy in the group plan, and participants have options to continue or not continue each coverage, we would have to keep track of (and be able to justify) whether the subsidy still applies to each elected coverage each month. The way it is set up either you are eligible for the subsidy (and it applies to all your COBRA premiums), or you are not eligible for any subsidy. It could have been a lot more complicated.

I found this article useful: http://www.alston.com/files/Publication/00...%20Bulletin.pdf It says that the "Subsidy is available for any health coverage (including dental, vision, EAP, etc.) other than health FSA coverage offered through a cafeteria plan." Edit: typo

There's some information on this topic here: http://benefitslink.com/boards/index.php?s...;hl=withholding

Your plan probably continued your previous deferral election amount or percentage, because you didn't tell them (in writing) to change it. That's probably how it happened, but the Plan Administrator is the one who should respond with the explanation. Assuming you can change your deferral election more frequently than once a year, all you should have to do (as QDROfile says) is file a new deferral election at the next opportunity, increasing your deferrals to a level that over the remainder of the year makes up for the currently lower deferral amounts.

I'd ask the broker for the document or cite requiring the participants to agree not to invest outside the plan. Is it something in the adoption agreement, maybe? And the exact language, as Mr. Rigby suggested, could be helpful.

I am intrigued by RLL's approach, but we will continue to first transfer the distributed assets (shares or cash) from the ESOP trust to the rollover IRA or qualified plan, as QDROphile describes in post #2. Stock certificates have to be generated, but that's not difficult. I agree with RLL that this situation does not involve a put option. To maintain S status, the company must automatically and immediately buy back any stock the ESOP distributes (as detailed in the Plan Document, of course). The company issues the check to the IRA or qualified plan. The redeemed stock then belongs to the company as RLL described in post #5. If the distribution also includes cash for amounts not distributed as whole shares (partial shares, cash account balances, etc.), that portion of the distribution is made as you would make any cash distribution from the ESOP, e.g., a check from the trust. The total distribution amount (whole share value plus other cash) is reported on the 1099-R.

Jumping in a little late in the discussion, changing the insurance renewal to January may not be a good idea, based on Jacmo's posts at the end of this link: http://benefitslink.com/boards/index.php?s...renewal+january

ScottR - I think the "subsequent payments" in your post #7 are due by 12/31, not 4/1, e.g., 4/1/08, 12/31/08, 12/31/09, etc. (or as AndyH indicated in post #4).

You are correct that the total distribution amount (what you receive plus what is withheld) will be taxable income to you. It will add to your other ordinary income for the year. As a result, depending on the tax bracket you end up in, your taxes on the distribution could be more than the 20% that the plan is required by law to withhold. And if you are under age 59-1/2, you will also add the 10% penalty to your federal tax bill (that's 10% of the total distribution amount). If your state has an income tax, the added income will increase your state income tax. Some states also have an early withdrawal penalty. In most cases, the taxes take a huge bite. If this is looking like too big a bite, you might reconsider rolling over to a 401(k). In that case, you are not liable for the taxes until you take the money out of the 401(k). There may be different rules for taking distributions from the 401(k), but the big advantage of the rollover is in postponing the taxes. If you have the distribution paid to you, you have 60 days to rollover all or a portion of the money you receive into an IRA. The amount you rollover in 60 days is not considered as taxable income this year, and the 10% penalty will not apply to that rollover amount. You actually have the right to rollover the total distribution amount within the 60 day limit, but in that case you have to come up with the withheld amount from other sources, like from your other savings. The special tax notice you receive from the ESOP will cover these topics and others in more detail. These notices are usually small print and cover topics that you are not interested in, but I recommend reading it carefully. As A Shot in the Dark said, the Notice will answer most of your questions.

Thank you, Andy the Spin Doctor. You are right that some of 2008 was good. I will try to keep a positive outlook on what the legacy of 2008 may be. As former President Will Rogers said, 'Worryin' is like paying interest on a debt you ain't got yet.' Thanks to everyone on the boards. I hope 2009 is the best year ever for all of you.

JanetM - Sorry to hear that. We'll be looking for your rebound on these boards. (I love basketball.) Thank you for the good advice you've given me and others.

Plain old opinion: I suggest contacting the spouse to confirm whether he/she signed the document (or maybe that was the 'quick check'). If the spouse did not sign, get a written statement to that effect signed by the spouse. Then get the employee's statement (in writing and signed), and proceed with discipline, if appropriate. Many places have a policy that falsifying documents is grounds for immediate termination. If the signature is a forgery, you probably also need to decide if the notary public was an accomplice. Get the notary's statement, e.g., find out what steps the notary took to verify that the person signing the document was the spouse, and whether the notary claims to have been hood-winked or was in on it or what. If it is not clear whether the notary was totally innocent in this matter, send copies of the statements and the evidence to the state office that commissioned the notary public, so they can determine if the notary did her/his job properly. Your decision on discipline may depend on the state's verdict.

Looks to be California Family Code. For example, the checklist form in this link: http://www.sccsuperiorcourt.org/family/att...nts/fm-1052.pdf says (item 9 on page 3) that if either party to a divorce, etc. has a retirement plan, the retirement plans must be joined to the proceeding pursuant to Family Code section 2337(d)(1) if the box is checked. But I'm guessing there's more to it than that.

I don't have the answer (sorry), but I have what is probably a dumb question: Why is the child ineligible at age 13?

Document in writing every step in your search. Contacts, e-mails, letters, phone numbers, responses, follow-ups, etc. As BG5150 pointed out, the SSA may be able to help, as can the IRS: http://benefitslink.com/boards/index.php?s...ng+participants

Maybe handing out a written one-page summary to the HCE's would take less time than fielding the phone calls. Keep it simple. Explain that the compensation limit is one of the rules for having the tax-deferred plan, point out how this limit is $245k for 2009 (an increase of $15k over 2008!), remind that the plan limits the match at 6%, and show the basic 6% x 245k = 14.7k math. Invite them to ask if they need further clarification. Alternately, write out a response with this basic information for persons who have to answer the phones.

Come on. These are people who are smart enough to make over $245k a year. They are smart enought to understand this compensation limit. Maybe pointing out that income limits are common. For example, they don't have to pay social security taxes on income they earn over a certain limit each year. Some limits are in their favor, some aren't. The other thing they may want to know is: No, there aren't any loopholes by which the plan could consider more than $245k (in 2009).

Maybe they would understand that the IRS says that in order for the 401(k) to qualify for its tax-deferred status, the 401(k) can consider only the first $245k that a participant makes (in 2009). As QDROphile points out, any compensation above $245k in 2009 is not part of the equation. As a result, 6% of 245k (=$14.7k) is the most that the match can be in your 401(k) in 2009. Qualified is a good thing for a 401(k) to be.

Just my opinion, but put all the information in one document, the SPD. A year down the road, when a widow or a QDRO lawyer or a participant asks for the SPD, it's easy to find the ONE document and provide it. Highlighting in a newsletter is a great idea for informing new participants of plan features, but it may get to be awkward to maintain as a formal document of the plan.

After re-reading my post #4, I must add that the parenthetical comment, 'How often does that happen?' was definitely not directed at masteff, who is regularly both right and articulate. It was an off-hand attempt at humor, probably while looking in the mirror. AndyH - The DJIA closed at 7908.25 on December 31, 1997, and at 7965.04 on January 2, 1998. The Roth was born on the day between. At the moment the DJIA is 8474.21. ... there will be a recovery, right?

My evil twin is wondering if there is anything to prevent participants from using this to game the system. Looking for some extra cash, a participant who has no hardship need designates as primary beneficiary an acquaintance who has a legit hardship need (with the written agreement of participant's spouse, if any). Participant then receives the distribution and changes the primary beneficiary back to the previously designated person. Hmm. Since the scam would not be obvious until after the distribution is made, are there any grounds on which the Plan Administrator could deny the distribution? Sorry to be so subversive this early in the morning. Just trying to protect the plan from cheaters.

As QDROfile suggested, the first step is to find your copy (or ask the Plan Administrator for one) of the ESOP's Summary Plan Description (SPD). The SPD should explain how hiring, lay offs, and rehires affect your eligibility for receiving contributions. The rules for the ESOP may be different from those for the 401(k). The 401(k)'s SPD will describe its rules.

Sorry. No more off the top, please. Looks like it's best to go with masteff's non-age factor approach, if possible.

MaryinRed - When you write to Dean Foods, ask for a statement of the status of your account. I strongly recommend that you include a copy of your QDRO for their reference. The QDRO shows your rights to benefits, and it may help them if they have to do some digging through their records. Also ask for a Summary Plan Descripton (SPD), which is a summary of their retirement plan. It includes information on distributions, etc. I think it is a very good idea for you to contact Dean Foods to be sure you are in their system and to get any account information you can. Good luck.

Just off the top, wondering if you can add a 1000 hours per year requirement for future allocations, or doesn't that work here?