Erik Read

I would have to agree - add the language into the document, and comply from there - provided it isn't already in the document. I would lean to the next commencement date, rather than exactly 6 months - that could become on of those administrative nightmares!

While I agree 100% that the corporate account should not be used for this purpose, I'm not sold on the fact that there needs to be a seperate checking account created. Most if not all financial institutions where you will hold mutual funds, should provide the plan with either a check book for distributions, or an online request for them. All plans should have a money market or stable value fund that is liquid, and can be used as holding tank for current contributions if they do not meet the current minimum funding amounts. Some of the institutions call these "FUNDING ACCOUNTS" rather than the same account as the investments are held in, but I don't see why they need to open the account at their corporate bank.

What year will the employer report it on the employee's W-2?

I think the more import quesiton is can an employee waive coverage of ALL benefits, not just plan participation - employers costs are probably focused on healthcare. Even with the waiver there is no way around the 1/2 Social Security payment - so they employer may still not want to allow the hours. Just my .02 cents. Good luck, and let us know that results of your findings. Thanks.

Thrift's could also have been Money Purchase Pension Plans prior to '84(?) and grandfathered for CODA sections included in the pendion plan.

Taking all that into consideration then, it's better to use the max deferral and remainder via PS contribution to acheive the $40k limit vs. 100% PS contribution?

Is the plan paying the other company to be the investment manager? Or, is the second company just designated (hint) as the investment committee? Which employee's are designated as the "trustee's" and who does the plan specify as the investment committee? Also - what does the Investment Policy Statement say about hiring a "manager" for the plans assets? Need more details before we can hypothesis that there is a PT...

And I would think the employer would want counsel as well, considering they "held" payments due to the plan in the employer account after withholding from the participant - perhaps a loan from plan to the employer? I know a few DOL auditors who'd love to get there hands on a situation like that before it goes in for compliance. Just my thoughts... may be other circumstances we're missing that show otherwise, but I could see this being a big headache down the road.

Did we all miss that the first sentence says that "Matching contributions are discretionary and will be made to a maximum % of pay"..... That being said - I would say the document is not only silent, but leaves the room for the annual Trustee's matching resolution to stipulate both the matching %, the % of compensation included in the matching calculation, and the time period used - annually or per pay period. I think we just need to say, have the board stipulate in their resolution which then should be distributed to the employees in an annual notice that shows the factors at hand.

Thanks mbozek - I new about the Cash Bal plans, and agree with your other points, part of my message was "sarcastic" - maybe that wasn't so clear. I think it'll prove interesting to see what they come up with though. New design always interests me.

Holy Cow Batman - a proposal for a CODA inside a Pension Plan - what a concept (Thrift).... only issue I see is how do you now account for the individual direction inside a plan that has not in the past been able to do that? Ought to prove very interesting, and if ASPA is starting the rumor mill, then we may just see the result being something we can all really work with and sell! Keep this string alive, and someone, please call ASPA for details.

If you have an 800 # to call, and it's telling you incorrectly the amount that is available for you to borrow, unless you request to speak with your firms administrator (who should be the final authority for your loan request), the supervisors supervisor may still think you can borrow as your suggesting. In a previous life, working for a large provider, our phone support group took the word of the computer program as gospel truth. Only when the request came to the administration department for signature, would we catch the look-back issues. Good luck.

I like the idea of finding other options to payback the loan. The other employer idea would be great, but not many allow for instant rollover of balances. Keep us posted on what the participant decides to do - especially if its not something we've suggested.

Are they neccessary for the administration of the plan? I'd think you would have a very hard time explaining why the plan paid for education of the adminstration staff to an auditor. Just my opinion though - other thoughts?

Thanks Gary - that's the conclusion that I came to as well. We're just going to use the 15% limit until technical corrections come around - I hope someday..... maybe? Thanks again.

I agree - find an ERISA - they'll probably present it as a clerical error to the document, since you can show that from an admin standpoint, they have been funding the plan. Good Luck - keep us posted.

My take of the example is that it works best with a 1 for 1 match and for the individual that cannot afford to defer in the first place (low-income) as metioned in Tom's response. I don't think the goal was to capture any deferral - and if you end up having to pay 100% of that back, that would be acceptable - I think their goal is to get at the "free" money in the match, and grab what you can there. WHAT about vesting though - I don't know many plans that do 1 for 1 matching that don't have a 6 year grade attached. So now they're really losing money........ Anyway - I know it's been around, but I didn't see any prior posts and figured it was worth posting so everyone can see it. Thanks for the comments.

Okay - not more than 15%, but what is the new dollar limit? Is it still $24k, or has it been increased to the $35k? I'm asking on behalf of someone else, and I do not claim to be an expert - so if this question is vague - please let me know. Thanks.

Thought everyone ought to see this, and be made aware of what some are trying to do... SCAM - Loaning deferrals to participants

I think everyone ought to view this - so here is the link to the discussion on the 401(k) board. SCAM - Loaning deferral monies to participants

Okay - let's talk about this - has anyone seen this? Participation Loan I stumbled upon this site while doing a search, and just could not believe that someone would actually try to get this established in our country. Talk about taking advantage of people. The most interesting portion is in how the "interest" is calculated, and the fact that the formula does not incorporate losses that a participant may incurr. Let's beat this up, and make everyone aware of some of these scams in the market.

Jon hit the nail on the head - IMHO - a self-directed plan, with an "investment committee", set Investment Policy, monitoring reports (on a regular basis) committee minutes showing discussion of fund options and their performance as benchmarked in the Investment Policy and a diverse set of investment options - that's probably the best of both/all worlds and one of the ways to help ensure compliance with 404©. On the otherhand, I cannot see a court of jury holding a fiduciary liable in the trustee directed plan, as long as they follow the same guidlines. So the answer to your SPECIFIC question would be less liability in example one - trustee directed, only because you do not mention an investment policy or monitoring in example two. Great question.

There are "rules of thumb" but it depends on the way the plan is written - if contributions are to be made from "profits", then a plan could go for a few years without any contributions. There just has to be a history of funding. If these plans are only 4 years old, and were only funded the first year - that may look suspicious under audit - if the plan is subject to audit. Lets see some other opinions too.

Thanks a bunch. Called them this morning and asked for samples of the two items you referrenced. Thanks again.

Can everyone say - THANK YOU! It's been a long time coming. Great discussion and information. Thanks all!