Brian Gallagher

in my company we have a "catchy" littple phase for this to help remember the rules: "One up, two down" The way I was taught to remember it is that 1 logically follows 2 and that usually in conversation, you say "up & down" (not down & up). So 1,2, up, down. "one up, two down" I hope this helps someone.

i disagree that it would increase retirement savings. it COULD increase participation. in these days with turnover at record rates, a lot of these loans are becoming deemed as distributions, or these people have to come up with a lot of cash to pay the loan off. loans do have a purpose in retirement plans, but giving people such easy access to their money is a recipe for disaster. if these people had to go through their plan administrator to get the loan, they might more fully understand the potenetial tax ramifications. or even if they went thru the internet, there would be something on there about it.

if they can't afford it, why are they asking about it? also, what is the plan's limit for deferrals? if it's under 46% she would never reach $11k.

I can see where the govn't might like the idea. Now more people will take lons from their 401k plan, change jobs and have the loans deemed. More tax revenue at a higher rate (as opposed to taking it out in retirement).

i believe that boh plans are currently at ray's company, and the newly merged plan will be there also. i'm guessing that if the testing and reporting are done correctly, it really won't matter that the assets are held in the "old" plan. the money will move over "into" the new plan.

so, nbs, i guess the answer is no. no one here has a spreadsheet to calculate it. i used to have one, but i can't find it. sorry.

are these "part-timers" seasonal people, or people who work, say, 15 hrs a week? also, if you have less than a year of service for eligibility, you can't impose an hours requirement (at least that's what i always assumed) you can't exlude (as a class) who are part-time or seasonal, but can w/ an hours requirement (again, that's what i always assumed)

i think if you use current for 2002, you're stuck with it.

the catch-up "recharacterization" is only applied after the test is run, not before.

why minus $1000?

i just thin that hce b is sol (pardon my french) what if the ages were reversed and b was over 50? the adp limit is 6% (for this test) and he put in 5.5%. is the first .5% refundable and the rest traetd as catchup?

you have to remember how refunds are calculated: you take the highest dollar amount deferred and work backwards to the second-highest, then to the third-highest, etc. since hce b deferred more than a, you use his $11,000 and go from there. in the example, it looks like the entire amount to be refunded from the test is $1400. since reducing b's contribs by $1400 doest bring him down to a's level, he is the only one getting a refund.

i don't think the new tpa wants the 401k money there. it's not really my case, i'm just asking for a co-worker. my first suggestion was to freeze the 401k, but apparently that's not an option the plan or the tpa wants to do.

mweddell, did you have a typo? i think is "B" who gets the refund.

we currently record keep a plan that has 401k, some match and safe harbor, and profit sharing. the plan is leaving us to go with a new provider that only does p/s plans. the pa wants to liquidate the 401k, match and safe harbor as a plan termination, while retaining the p/s in the plan. can she do that? or does she have to terminate the whole plan and start a new one with just p/s? and in that scenario, i would think the participants would have the option to roll the money into the new plan or do with it what they will--it could not be mandatory. any thoughts would be appreciated.

and, richard, just to clarify: the match (in the case of the 3% n-e) can be subject to vesting, right?

so let me get this right: with a 3% (or more?) n-e contrib, the plan can have up to a 4% match whether or not the plan must make it?

i thought, though, with the non-elective contribution, the match formula was a non-issue.

just

thanx all. jsut what i was looking for.

i thought "discretionary" meant the employer did not have to make the match if it did not want to. i never considered it as being a match w/ a vesting schedule.

thanks pax. exactly what i was looking for.

tom, i thought the 4% cap was for discretionary match amounts.

I think I read in a thread here, that once a participant reaches $200,000 in compensation for the year, he or she cannot defer to a 401k any more. is that true? does anyone ahve a link to that thread? i can't seem to find it. any help is appreciated.