RCK

If you drive the counts down, won't you eventually drive the balances down, which will motivate the asset gatherer to raise your recordkeeping fees?

If those HCEs have an account balance, excluding them from future deferrals is not going to take them out of the participant counts. So it might take a few years to get your counts to wear away.

What are your documentation requirements for purchase of a primary residence? We require a signed purchase agreement that shows a cash requirement at least as big as the hardship dollar request. You don't have a purchse agreement, you don't get a hardship. So if you are trying to buy the house via auction, you're not going to have a purchase agreement, and therefore no hardship. On the other hand, we also do not track what you do with the money. Deal fails to close--not our problem--put in the bank until things get sorted out. Your rich uncle dies and leaves you plenty--not an issue.

To add a different perspective here, I'm having a hard time with IraSue's annoyance with the fact that the match on the 6th percent has been raised from 0 to 50%--that she has only two weeks to change an election to get that incremental match.

I REALLY want to win the prize, but need clarification. Better for whom?

Is the acquisition a stock deal in which case his employment does not terminate or an asset deal in which he terminates from original employer and is hired by the successor firm?

Yes, as long as the individual plans pass coverage.

Back to the original question, I don't have a cite but agree with your position. The participant received a distribution of $XXX, some of which (s)he used to pay the fee, and some of which (s)he used for the hardship. The interesting question is the followup: if the participant has a $1,000 hardship and has to pay the $60 fee to get it, can they get a hardship for $1,060?

Any plan should define how the elections are made and what earnings they are applied to. And then the payroll system has to implement those definitions. And at a practical level even though there is a sequence to the deductions, this does NOT override the definitions. So for example say that you are paid 100% on commission, and you have child support and a direct deposit to your credit union for mortgage and 401(k) and Roth (in that order). So your commission drops from the regular $10,000 per pay period to $1,000, the child support and mortgage eat that all up and there are no funds available for your $500 401(k) (5% of gross). And I don't want to talk about what happens then.

This must be a dumb question. How does a plan commit a ADEA violation?

A recent plan survey showed only 13% of plans with a cap under 20%. The average was 37% and the most frequent was the 50-59% range. I agree with BXO about the QED response. Sounds like a toddler who has learned a new word.

Average daily trading in excess of 1 million shares. Real 16(b) insiders are automatically limited, but our concern is those people who can watch the insiders coming out of meetings, to see if there's a smile on their face, a spring in their step.

I work for a plan sponsor with several large 401(k) plans that hold publicly traded company stock. We have a 25% cap on the portion of any contribution that can go into company stock, and prohibit any transfer that would result in a company stock holding in excess of 25% of their account. Since this seems explicitly allowed under PPA and Notice 2006-107, we intend to keep the limit. But we also restrict a participant's company stock buy back rights after they have sold any company stock, and this is clearly not allowed under 2006-107. Since we are worried about the period around earnings release dates, we are considering suspending trading in ALL funds for a period preceeding and following all release dates. In this context, trading includes just balance transfers and reallocations--it would not include contributions, withdrawals, loans, loan repayments. I'm looking for thoughts, reactions, better ideas, etc.

Is this a union plan?

Unlike stephen, I read your original post as coming from an affected participant. But I have to say that I expected your post to be a response to a set of facts that had actually occurred, not a reponse to a bunch of rumors that you had heard. If your former employer was fair and generous in the past, they probably will be again, and unfortunately if they were not before, they're not going to be now. But now you will have the ear of the DOL, which will be very interested if several people contact them with complaints.

And that was undoubtedly a compromise between competing factions--a concept that was carried over to the beginnings of ERISA. As I recall (oops--as my dad told me) one side wanted the IRS in charge, and the other watned the DOL--voila, lets put them both in charge.

Let's say that somehow we can get around the fact that this is a PT. I don't think it can, but just for argument sake . . . . What are the plan assets, and how does this fit into the fiduciary's prudent person responsibilities? Unless the plan assets are well over a million dollars, possibly even $2 million, this does not look like adequate diversification.

lexi, If you have a plan document that gives the administrator or the adminsitrative committee the right to limit HCE deferrals, and you have a practice in place that limits HCEs to x%, you HAVE TO cut the HCE in question to whatever that limit is. We limit HCE's to a lower level throughout the year, then cut them back to an even lower level over the last few months based on projected tests. So we don't have to do a refund. If you have electronic elections, you program should not be accepting an impermissible percentage from an HCE. That's one of the advantages of an electronic process--it can validate all the data as it comes in.

Our plan has been using autoenrollment since 1999, and we autoenroll probably 2,000 per year. Annually, we refund deferrals to probably less than a half dozen participants who can show that they did NOT receive an effective opportunity to opt out. Those are almost always address problems. We never autoenroll participants whose enrollment kits were returned to us with bad addresses, but sometime the kits don't get back to us in time.

I agree with pax--what DOES the plan say? Ours does not allow installment or partial distributions. So if they have terminated employment and need to get a MRD or RMD, they have to take their entire account. The MRD part is not rollover eligible, balance is.

Janet M, I'm usually in a contrarian state, but don't see how that helps.

We've been using auto enrollment for years, without the autoescalation feature. But I know that we can differentiate an autoenrollment at 3% and an affirmative election at 3%. So if we had an auto escalator, it would only apply to those who had never overriden their autoenrollment percentages. And any investment elecitons they had made would have no impact on this. Or in other words, I agree with JanetM.

I agree, you should use the plan effective date. But I'd add that plan effective year is probably pretty important, plan effective month is less important, and plan effective day is of virtually no value.

Is it an issue because the fees are passed through to the participant?

JimmyG, are you confusing this issue with the Defined Benefit 133 1/3 % accrual rule that prevents excessive backloading of accruals -- 411(b)? RCK