Brian Gallagher

My 2 cents: I would say that the fees (reasonable ones, at least) could be borne by the plan. If the plan sponsors feel that getting the third-party search firm would be in the best interests of the plan and its partipants, it would be okay. A reason could be that the search firm would have access to many more resources than the sponsors would, and that the plan would ultimately benefit from having the pro's do it.

I would suggest the same method of delivery as the SPD and SMM's.

Pax, I don't think a plan MUST permit catch-ups....

Is there no guidance in the plan document itself? There should be something that deals with lost participants. Our document allows for the money to be forfeitted. If the person ever claims the money later, the plan owes the participant the money (if enough in the forf acct) or the company would have to come up with it.

I would say that is okay. As long as it applies to everyone equally. Just make sure that HCE's won't get a bigger benefit by doing that.

Just as a side note: Instead of pre-funding the P/S in the EE's account, why not pre-fund a retail account, and liquidate it once a year and make that the P/S contribution?

Couple of questions: Are current participants allowed to move money back and forth between the two fund companies at will? Is there anything in the service contract w/ company A that says only active people can transfer money in and out?

The bad thing with the IRS program is that you never know whether or not the letter is deliverable (unless, subsequently, the participant does the distribution).

I would say absolutely not, since no one else in the plan would have that option. She would be getting at least a several month jump on potential earnings. Talk about discrimination!

Can't the plan be amended to offer the "we may may make" version of the SH?

From the Pension Answer Book 2003 ed. Q 3:8: "Thus for plan years that began in 2002, the look back year began in the 2001 calendar year, and the compensation limitation for determining HCE status was therefore $85,000. The compensation limitation for determining HCE status is $90,000 for plan years beginning in 2002, based on the look-back year beginning in 2001." The first sentence seems to be saying that for 2002 plan years the limit is $85k because of the look-back year of 2001. The second sentence says it is $90k becasue the look-back year beginning in 2001. Does anyone else see the contradiction? Or am I missing something?

OOOOOOOOOPPPPPPPPPPSSSSSSSSSSSSS!!!! I am way totally utterly unqualfiedly WRONG!!!! Never mind that abomination of a post of mine above!! I know better than that. Post Redsox victory hangover of sorts. But I do have a question about something I read in the Pension Answer Book last year and this post reminded me of...(see next post)

No. The limit for 2005 is $95,000. That means, for the 2005 plan year, anyone who made more than $95,000 <b> in the previous plan year </b> is an HCE. Likewise, for the 2004 plan year, anyone who made more than $90,000 <b> in the previous plan year </b> is an HCE. (and don't forget those pesky 5% owners and attribution rules!)

Where can I get a copy of the 2005 pension plan limits?

The people who are catch-up eligible do not have to be specifically notified. However, there should be something about catch-up in either the SPD or an SMM that was done after the EGTRRA amendments were applied to the plan.

By the "max", I'm guessing you mean the 402(g) limit. That is a calendar year limit, independent of what the plan year may be. So, in theory, a plan year beginning 10/03, ending 9/04, someone could possibly put in $25,000 in elective deferral (exclusive of catch-up even). That would be achieved thusly: put in $12,000 between Oct and Dec 03 (402g for '03 reached) and $13,000 between Jan and Sep 04 (402g for 04). That would, of course, mean that the person couldn't have had any deferrals between Jan and Sep 03, etc. Catchups are calendar year also, so an add'l $2000 could have been made in 03 and $3000 can be made overall in 04. However, if the plan fails the ADP test, the corrections get a bit hairy and are way over my head... Hope this helps a bit.

Also, In our standard loan program, the participant has the option of either repaying the missed payments or, when she comes back, to re-amortize the loan for the time remaining.

Would there be any testing issues if a plan has different eligibiltiy for 401k and SH match? In this case, immediate eligibility for 401k and 6 mos for SH match. (Plan allows for dual eligibility for SH).

FundeK, That would be regular salary right, not disability pay (something like 66% of regular pay)? For some reason maternity leave is considered short-term disability in most cases (don't get me started on that!).

That's the way we do it. But keep in mind, those are "forfeitures" in the sense that they are unvested money, to be treated as the plan document dictates (reallocate, cover match, fees, etc). I like to call it suspense money, which the plan uses to reduce its next contribution check.

This plan allows for only 1 loan outstanding, so this loan needs to be paid off first. (Since it was deemed and not offset, it's still an outstanding loan).

It looks to me like she can...it looks acceptable in Q-A 21 in the final loan regs. Any thoughts?

Fact pattern: Participant still working with company (no termination of employment), but for some reason loan hadn't been paid since 2002. It was deemed a distribution. Participant wants to take a new loan now. I understand that she must pay back the first loan before taking another one. My question is: Does the first loan have to be paid off all at once? Or can periodic payments come in? Can you point me to the regs that say either way? As usual, thanks in advance.

To answer a question that came up a couple times: plan year = calendar year. In response to the previous few posts: I thought the 3 year req'ment was for when vesting SCHEDULES changed. There is no change in the schedule (still 3-yr cliff), but the service req'ments have changed for a eyar of service for vesting. PS: How do you make the box around the quotes from a previous post? (You can PM me with the answer so as not to clutter the board. Thanks!)

I would check with the folks who wrote the document. What do they say on it? After everything is fixed up, I would amend the document to properly reflect what is wanted--payroll, monthly, quarterly, yearly matching periods.