Brian Gallagher

I thought that the P/S money just had to be segregated from the company's general assets by the tax filing date, but not necessarily allocated to the participant accounts. In other words, the check has to be cut and entered into the accounting ledger so in thoery, the company doesn't have access to that money any more. Am I way off base?

A couple of questions: Are you 100% vested in the money right away? Will the money be considered the same as a salary deferral? If so, then how could you take the money anytime. Salary Deferral money is locked up until a distributable event happens. And just something not really realted to the topic but, what if you leave the firm mid-year? Do you get to keep all $2K for the year, or just the stuff you "bought"?

A note on the triggering event: doesn't post # 1 say PREVIOUS employer? Does that plan have language prohibiting a distribution before retirment or something?

You are correct!

Generally, non-Post Office carriers won't deliver to a PO Box. However, the Service Center in Ogden isn't a PO Box, it's an actual building. Having that unique 9-digit ZIP should be sufficient. [speaking of proofreading, did you know that ZIP should be capitalized (from Manual of Style and Usage by The New York TImes)? Also, ZIP stands for something--does anyone know?]

Thanks. That's what I thought. Evidently we did add 3% to the excess comp in the past, but since it was a Profit Sharing contrib, I guess it didn't really matter--TH was satisfied anyway.

Let me restate my question: Is the Top Heavy minimum subject to the integration? Or is it just a straight 3%?

I have a plan that is going to make the Top Heavy minimum as a Profit Sharing contribution--3% of comp for the eligibles. The person who prepared the allocation for me merely took 3% of the eligible comp. The plan is integrated w/ social security. There was no contribution listed for the ecess comp. is that correct--it's just a straight 3% even if it's integrated? Your thought are appreciated.

Also, I would think that the participants would only pay the expenses that accrue going forward (after the effective date of the amendment). A company couldn't wrack up $10,000 in expenses over the past three years and then pass that on to the partiicpants. Could they?

In my exapmple above, that would be impossible. Would the notice have to be given at the time of hire?

I know that the Safe Harbor notivce needs to be sent before the plan year to all participants. But what about people who become eligible in the middle of the year? Do they have to get one, and what is the timing of that one? For example, I have a plan that has immediate eligibility and monthly entry. If someone is hired in April, and can start in May, obviously, she wouldn't get a notice. Is one required for her for that year?

One of the people at my company gave (what I thought was) a great example of why the loan (principal, at least) is not "taxed twice": Say you took a $5000 loan and cashed the check and got 50 $100 bills. payments are to be $100 each (we'll assume no interest for simplicity). What if you just took that money and put it on a table in your house? Then, every two weeks, you took a $100 bill and mailed it in. After 50 payments, you have paid back the loan and not a single dime of it was taxable along the way.

I don't have an answer, but what's the limitation year? Does it agree with the plan year?

What the plan wants to do is allow anyone who is scheduled to work more than 1000 hrs to be allowed immediateenrty, and people who are scheduled to work less than 1000 hrs (in a year) to not be eligible. This is all based on scheduled hours, really meaning full-time ee's get in and part-timer's don't.

I have a plan that wants to exclude a particular group of employees, say the employees of office A. As of now, everyone in office A is eligible to participate, and roughly 75% of them do. What the company wants to do is exclude the employees in office A, but let the ones already contributing to continue, therefore making the non-deferring, and future employees not eligible for the plan. That can't be right. Right?

I thought about telling the client that if the people were classified differently, it may be possible to exclude them. However, I don't want them to just call them something other than "part-timers" (like "hours-challenged employees" lol); it would be a semantics issue. I haven't ran the coverage numbers yet either, but eyeballing it looks like they'd be okay.

Is there something with better language that doesn't reference the 1 year of service. I know my client will harp on that point.

When a person is automatically enrolled, contributions may go to a default investment. Would there be a compliance issue with 404© and the participant investment direction piece of it? Therein would lie some fiducuiary laibility.

I have a plan that wants to exclude them. They currently have no service requirement. The example in the notice says that the plan would fail to qulaify if it requred 1 year of service. Would that make any difference?

I seem to remember a directive (many moons ago) that the IRS or DOL came out with saying that plans can't exclude specifically part-time employees. Can anyone give me the number. And a link to it, too, would be awesome! Thanks in advance.

I don't know what your budget is, but you may want to consider having a third party do the survey for you. A good company will have experience in choosing the best questions and wording them in the best way. It will aslo determine the best scale. We use a 1-7 scale, and strive to have 90% 6 and 7's. You may lose specific client comments. Well, not entirely. Our survey company culls together the results and gives us the overall scores, as well as all the written comments. However, the survey is entirely anonymus, so we don't know who exactly is bad-mouthing or praising us. I feel that we can find a lot more policy-wide deficiencies that way, rather than plan-specific complaints.

Thank you all. Got 'em! Wonderful reading for my train ride home.

Does anyone know a good site to download the new 401k regs? Thanks.

I believe, also, that if a plan has an eligibility period of less than 1 year (eg 6 months), there cannot be any hours worked restriction. Also, on a standardized prototype the maximum hours restriction is 500 hrs, isn't it?

Is there anywhere in the regs that say that severance pay is not included for comp in 401(k) plans?