GMK

This was an interesting article on which others, those who know a lot more about these things than I do, could comment for Ms. Confused's benefit: http://www.theintelligencer.net/page/conte.../id/507119.html Something about guaranteed pension amounts under TRS, and $3 billion in TRS unfunded liabilities. Maybe the TRS reps can provide Ms. Confused with specifics about the protections WV law provides TRS participants.

... subject to withdrawal provisions in the plan document.

As always, check what the plan document says, but generally contributions to an ESOP are to be allocated when contributed.

401_4 wasn't the only one to come up a little short on that 'ludicrous' comment. We get into our serious reading mode and start to take it all in. Maybe add a ha-ha or smile face, because we enjoy the added humor (once we get the joke). From summaries I've read lately about a few non-compete challenges, linking plan payment options to non-compete agreements might be disallowed in some places, if challenged. I'm no expert on this. Just suggesting that it may not be automatically OK (from the non-compete side).

I like the low expense ratio and the high performance ratings of your choice. It appears to be doing better than its benchmarks over the past 1 and 3 years. (Of course, as you will read many times, past performance is not a guarantee of future returns.) If you go with a Roth IRA, the low rating for tax efficiency does not matter (no tax on Roth earnings). Regarding magazines and books, start at the library (the free book store). Books are pretty pricy these days, and you can put the money you save into your new Roth. Good luck.

I'm told (and distribution forms I've seen confirm) that for IRA to Roth conversions, 10% is the default withholding, but you can elect otherwise, including 0%. For plan distributions to a Roth, however, ..... ??? Is it correct that in a plan to Roth conversion, any withholding (not made up in to the Roth) is subject to the 10% early withdrawal penalty? If so, it's better to elect 0% withholding on the conversion and increase payroll withholding to cover it, if needed.

masteff has given you an excellent answer. Another advantage of index funds is that their expense ratios are generally lower than other mutual funds. The mutual fund takes a percentage out of your account as a fee to pay the expenses of running your account. This happens automatically, and the share price (NAV) for your fund that you read in the newspaper or on-line is the share value after the fund has taken its fee. These fees can be 1% or more for some funds, but for the more common index funds, they are usually below 0.5%. Obviously, the less you pay in fees, the more you keep in your account to generate earnings. I recommend that you look for "no load" funds. There are lots of them. Loads are payments the fund company collects out the money you invest when you buy into the fund (front-end load) or when you sell it (back-end load). Just because a fund has loads or other fees does not mean it's a bad investment. To get the same return as a no-load, low fee fund, however, it has to produce a higher rate of return. Congratulations on starting your investments early. I wish I had.

Sorry if I sounded flippant, mjb. Sometimes clients ask their non attorney advisors for an opinion on a matter to determine if they need to consult a lawyer. Sometimes the non attorney's response includes enough cites or other references that the client can decide to rely on it without an attorney's review. The non attorney's review may reveal that little or no guidance exists and conclude that an attorney's opinion should be obtained. It depends on the question the client needs answered. Clients see disclaimer statements on virtually every document that attorneys and non attorney advisors issue, so the degree upon which an opionion can be relied is generally pretty clear. No doubt an attorney will do her/his own research, but the non attorney's opinion (unless it is completely erroneous) will generally provide a starting point that saves the attorney some time (which can save the client some money).

And happy Friday to you, too. Presumably the work release employees are paid by the prison. Otherwise, the "administrative burden" would fall on the client's payroll department, not the prison. Might the prison find it more palatable if the client offered to do the deferral calculations? (is that even possible?) Hmm? Who is the employer is a case like this? Are the work release employees really more like temps hired through an agency? Some 401(k)'s exclude temps from eligibility. Here's to the hope that you can get this resolved before it matters for real.

No nudge nudge. No wink wink. Always recommend that the client have a lawyer review your findings if the client has any concerns as they relate to the law. If the client gets grumpy, point out that you are probably saving the client money. The client's (expensive) lawyer only has to review your work. The client isn't paying lawyer rates for all the research time you put in.

I agree with J Simmons and Bird. This could be a good deal. A Shot i t D: It seems to make sense to get the cash rather than to hold the property. On the other hand, it would probably be prudent to contact a real estate expert to be informed as to what the prospects for the sale of the land might be in a couple years, when credit may be more available to buyers of land. Your decision could then weigh that future potential against having a bird in the hand (no pun intended). The biggest concern I would have with the proposed deal is the potential default on $1.8 million, which John pointed out. Are any other developers interested in the land. Some competition for the land could improve the terms if not the price. Is there a way to insure the sale price or set up an escrow fund or something else, in order to prudently protect the plan participants' investment? Hope it works out for the best for you.

Just guessing, but ... it looks like the one labeled "401k Match" is the amount the company matches, and the "401k Unmatched" is the amount the company does not match (the loan repayment?), and what we are not seeing is the company's match amount, which is not necessarily listed on the pay stub.

Kim, one possibility is that the participant's spouse gets lousy benefits. So, they maximize the participant's benefits, and use the spouse's income for food, rent, etc. Or they both maximize benefits, and the spouse's income is higher.

I'm missing something in all this. From the original post, after deducting for payroll taxes, court ordered payments, and FSA, the remaining money can go to health insurance premiums and the 401(k). While I agree that the employer would do well to have the employee agree what gets paid and what doesn't, I suspect that the 401(k) doesn't allow the employee to randomly change his/her deferral election for the 401(k) (except you can go to 0% deferral at any time). If a deferral to the 401(k) ends up being less than the participant's current elected deferral amount, is there any problem that the plan administrator may not be operating in accordance with the plan document? Should (can?) the plan say that the 401(k) deferral can be less than the election in the event that the money went first to other deductions that are at the participant's immediate discretion, including insurance premiums, United Way, etc? Is there guidance that allows an employer to defer less than the elected amount to the 401(k)?

With the hope we never have this situation, but in the event we do ... Is there any guidance on whether a 401(k) deferral can be reduced below the participant's elected level in a case like this? Otherwise, it looks like the only other thing in this post that can be cut is the group health insurance payment. Thomas2006, when this happens, what do you do now? Do you allow (or require?) the employee to make up the shorfall from other sources? next paycheck? Any and all replies are appreciated.

Generally it's the compensation the reemployed veteran would have received (including raises, etc.) had the person been at work during the period of military service.

Thank you, masteff, for the information. It appears that maximum eligibility rules are not an issue in this discussion. Deferrals are taken from paychecks, so they are always linked together in time and in calculations, regardless of pay periods. If a participant is eligible to defer from a paycheck issued 1/2/08 and the participant defers from that paycheck, then the deferral and the pay are part of the 2008 calculations, even if the pay is for work done in 2007. I don't think there's any argument about that. The issue is whether or not a particular paycheck is eligible for deferral. I think the TPA would say, for example, that if the plan entry date is 4/1/08 and the check on 4/4/08 is for work done in March 08, then that check was a payment of compensation earned before the person was a participant, and so is not eligible for a deferral (assuming that was consistent with the plan document). Approved prototype 401(k) plan documents include the 'You begin participating' option of 'on the first day of the payroll period on or after the date you meet eligibility.' Is this a risky option to choose? Is there other relevant guidance? Thanks in advance for your comments (which can certainly wait until after Tuesday).

Write a letter to the Plan Administrator requesting the benefit to which you feel you are entitled. (Write the letter. Don't just go in and talk to someone.) Quote the "highlighted" part of the Summary Plan Description and compare that to the actual deferrals. In the letter, ask the Plan to go back and make it right. Toward the back of your Summary Plan Description should be a section on Participants' Rights. It tells you what the Plan Administrator is required to do if the Plan rejects your request. And then you can appeal their rejection of your request. Generally, those steps must be completed before you file suit in a court. But few are keen to go to such drastic lengths. If things do not go well for you, the Division of Technical Assistance and Inquiries of the US Dept. of Labor in Washington, DC, may be able to give you some advice. This is probably just a clerical error (keep a positive attitude). The Plan should thank you for pointing it out and fix it to your satisfaction. (They are not required to do the 'thank you' part.)

Just wondering... If the employee met the age 21 and 1 year of service requirements on January 25 and didn't become eligible until the quarterly entry date of April 1, would that violate the maximum eligibility rules? (even if she/he could defer as of the April 4 pay check)

Plan Man - It doesn't change my answer. M. Schwing - you probably have already, but maybe one more look through the plan document to see if it mentions pay periods or pay dates with regard to when a participant actually begins participating and when election changes go into effect.

As confusing as it is, listen to the TPA. In all likelihood, you also need to consider pay periods, not pay dates, for determining when changes in deferral elections go into effect. Eligibility and election changes cannot be retroactive. They cannot apply to compensation earned before eligibility or the effective date of an election change ... unless someone knows of exceptions.

The exceptions are the same ones that apply to your plan and generally include payments that are: paid after you separate from service with your employer during or after the year you reach age 55, paid because you retire due to disability, paid to your beneficiary if you die, paid in a direct rollover, including a direct rollover to a Roth IRA, piad to certain reservists on active duty, paid to an alternate payee under a qualified domestic relations order, dividends paid with respect to stock by an ESOP, paid as equal (or almost equal) payments over your life or life expectancy (or your and your beneficiary's lives or life expectancies), paid directly to the governmnet to satisfy a federal tax levy, or less than the amount of your deductible medical expenses.

From the section of your Plan Description that QDROphile has highlighted, it appears that you have a case to discuss with the company. If you think of it, let us know what the company says. Thanks.

I would go with 50% of assets, but it may not matter whether you say assets or value. Click here for one of the discussions of this on the QDRO board.

Thanks, Mike. I think I have it now. I appreciate your reply. I also found the How to Use These Boards board and learned about a few more good features. http://benefitslink.com/boards/index.php?s...st&p=160936 and this one Thanks again.