RCK

We started in 1999 at 2%, and moved to 3% in 2003. We did not sweep backward with either of these--both were prospecive only. If I had it to do over again, I'd start at 3% with an automatic 1% annual escalator until you get to wherever your match maxes out. And the most common investment is still a Stable Value fund, but I'd consider a Balanced/Life Cycle/Life Style fund. There is substantial participant inertia with autoenrollment, as to both deferral percentage and investment elections. So where you auto enroll them is where they are going to stay. And no matter how much you deny this, they are going to think that your defaults are recommendations, and they will be able to retire on that 2% into a Stable Value Fund

I'd suggest at least two different resumes, targeted towared your basic job choices: internal for (typically) a larger employer, or on the provider side for a recordkeeper/trustee. It really is OK to have different versions, as long as they are more similar than different, and they are just "spun" a little differently. The dates and "hard" facts have to be the same (duh), and you do have to keep track of who got which version.

We are terminating a Guaranteed Interest Account effective in the next month and are looking at a negative market value adjustment. Rates have started creeping up enough to create one. We're looking at about 1.25% of the fund.

Really! If I were getting 30-60%, I would not be working for a living, and I would not be soliciting free advice. But that's just me.

Let me ask the dumb question. Were they 100% vested?

I think that the new tobacco is going to be fluoride. And cities will get sued for using too much. And bottled water companies will get sued for not having enough.

WDIK--I now know what you do know. You appear to be correct on all three points: 1. GoldenBear03 is indeed off the mark--the question is not whether we have to issue the 1099, it is whether we have to issue the check in the first place. 2. I have not found an out anywhere else either. 3. I think that you're right on the timing issue. If so, we will roll up the smaller ldistributions and make the actual distributions on an annual basis.

Like many other larger 401(k) plans, we have recently converted the company stock fund within our plan to an ESOP to make the dividend payments deductible. And as part of that process we have to give the participants the option of receiving their dividends in cash instead of being automatically reinvested in their accounts. We have just completed the first quarterly process under these rules and 75 of the checks were for less than $1. My question is whether we can apply a deminimus limit on those cash distributions without jeopardizing the deductibility of the dividends.

I agree wholeheartedly with the first paragraph of Pensions in Paradise response: you can autoenroll current participants to a higher level, but it does not seem right. I disagree with the second paragraph. We (Fortune 100 company) were an early adopter of autoenrollment (June 1999), and our primary concern was always encouraging participants to get involved in planning their retirement, and for them to stop "leaving money on the table". Because of the inertia that has emerged for autoenrollees, the process does NOT have a major ADP/ACP impact. Before autoenrollment, we had 70% participation at 5% (for 3.5%). Now we have 95% at 3% (or 2.85%). We lost ground. OK, in reality, its not that simple. we are getting a material number of contributors up to the 5% match level, so we have a slight gain in the ADP test.

Going back to the original question, I am puzzled by the reference to the fact that this is for a large plan and the avoidance of the large plan audit. I'm not convinced that the reference is to the 100 participant threshold for a plan audit instead of the 2,500 participant threshold for the IRS' Employee Plans Team Audit (EPTA) program. So for betheeg: just how many participants are we talking about here?

I can't provide a cite, but can say that we originally implemented automatic enrollment in 1999, and did it mid-plan year. And we have made many changes mid year. The big question is whether you want to make it prospective or retrospective. If you only do it prospectively, you have to decide whether to do it for hires after the effective date, or for those who become eligible after the effective date. This approach is manageable and not too expensive, but has minimal ADP/ACP impact for a few years. The alternative is to make it retroactive, and to sweep everyone in. This give you much more potential impact on your ADP/ACP. Be sure to factor inertia into your projections. So if you're getting 50% to enroll now, but they're averaging 6%, you're getting an average of 3%. But if you autoenroll at 3%, get 90% and they do not change upward later, you're now at 2.7%, and you have a bigger ADP/ACP problem instead of a smaller one.

Wait . . Wait . . . Wait. I had to work and got behind. I thought it was Peg.

If the rates of return are about what you'd expect, and your account moves on a daily basis in lockstep with the underlying stock, then you are certainly looking at unit accounting. We do that with most of our plans to allow a low (2-3%) cash position for liquidity purposes, but also to allow for the payment of expenses.

It's hard to rate reading SAR's because I don't know anyone who has done it.

My idea of wasting time: Preparing and distributing Summary Annual Reports.

We have employees living in 44 states plus DC. We use essentially the same promissory notes in all states (there are minor differences due to different plans). No one has the right to revoke their repayments--if they are being paid out of the payroll system, they have to make the loan payments. I don't know quite where the loan payments fit into the priority list, but if the pay was used up before we got to the loan repayment then we'd have to let it slide. Our outside counsel is relatively conservative, so I'd be surprised if they put us in an aggressive position. I do not have a cite either way though.

STOP in the name of Love.

Winding down on a Friday afternoon, I discovered Lame Duck's post about Southern Californians going to the mountains, beach and desert in the same day. I believe that on (the big Island of) Hawaii that can be done in a couple of hours. To Becky Miller, I hope that by a field that contributes to society you mean pension professionals of various types, and not auditors. And to the original topic of this thread, I started as an actuarial sutdent about the time ERISA rolled around, became an Enrolled Actuary, worked in a number of different environments, and now a benefit manager.

mlmarvin did not specify what his (her) roll in this transaction was. So that muddies the waters a little. However I agree with everyone except TPA Guy. Sham transactions such as this are the reason that we have laws and regulations coming out our ears. In this game, the IRS makes the rules. And if you want to play, you have to agree to play by their rules. Sure if the participant quits, takes a distribution, and then reapplies in the hopes of getting a job with the employer, (s)he is entitled to a distribution --fair and square.

I think that I understand. The wicked witch represents congress, and the flying monkeys are reform legislation proposals. But who's the wizard?

to lhinson: NO! My daughter was raised as Gopher and Vikings fan (when that was OK). So when I dropped her off in Madison, I said, "You know you're going to have to be a Badger fan" .. . "I know that, Dad." "and you're going to get some pressure to cheer for the Packers" "No, Dad, I do have some standards!"

to Mary C: I think that you are operating under a common misconception. Your children are only vested in their candy to the extent that they are awake. Falling asleep is similar to a break in service . . . . Make an effort to enjoy these days. My daughter is at the U of Wisconsin Madison, nationally known as the home of Halloween riots, tear gas and lots of mounted police.

We used the Berwyn Group, www.berwyngroup.com. We had quick turnaround and decent reliability of results. I seem to recall they had a "budget" version that we used, and more intensive and expensive version that we did not try. Results first time were good enough that we went back to them the second time.

Go back and read your original post and then tell us again that you are not looking for answers.

Our feeling is that we're not going to be a Beta site for anybody. Since there's been no demand from our participants, we're going to sit and watch for at least a year and then reevaluate.