401K Advisor articles from February 2002

401K Advisor archives from February 2002

Complicated catch-up contributions.(Brief Article)(Statistical Data Included)
February 1, 2002... You wouldn't think that permitting an individual to make an additional $1,000 salary deferral once he or she attained age 50 would be a big deal. The IRS apparently sees shadows in the woodwork--the highly compensated employees (HCEs) could...

IRS updates distribution notice.(Internal Revenue Service)(Brief Article)
February 1, 2002... Get ready to hand participants a three- to six-page booklet outlining their rights and the taxation of a distribution the next time you plan a distribution. The IRS has released a new, and somewhat longer, model Notice in IRS Notice 2002-3....

Drafting 401(k)plan claims and appeal procedures: full and fair review. (Document Update).(Brief Article)
February 1, 2002... ERISA [section]503 requires each employee benefit plan to provide each participant or beneficiary whose benefit claim has been denied an opportunity for a full and fair review of the denial by the appropriate named fiduciary. The 401(k) plan...

Seven pillars of investment wisdom for 401(k) participants. (Investment Corner).(Brief Article)
February 1, 2002... With clouds of anxiety about the stock market and the economy, plan sponsors are being called upon to offer counsel to their employees about their 401(k) plans and the available investments. With apologies to T E. Lawrence, here is my list of...

Effective date for GUST restatements: from an interview with attorneys Charles Lockwood and John Griffin. (Q&A).(Interview)
February 1, 2002... Bringing an existing pension or profit-sharing plan into compliance with the GUST requirements and at the same time restructuring the plan to take advantage of EGTRRA's new limits is no simple task. The GUST provisions are, for the most part,...

IRS updates procedures for obtaining EINs. (Matthews on 401(k)).(employer identification number)(Brief Article)
February 1, 2002... Until recently a plan professional could not obtain an Employer Identification Number (e.g., trust EIN) for clients who maintain qualified retirement plans without first obtaining a power of attorney using Form 2848. This form was then sent...

Universal availability for age 50 catch-up contribution. (Matthews 401(k)).(Brief Article)
February 1, 2002... EGTRRA's catch-up contribution for 401(k) participants who are aged 50 or older ($1,000 for 2002) is conditioned on this provision being included in all salary deferral plans of the employer. That is, all participants in any 401(k) plan of...

IRS posts M&P and volume submitter names. (Matthews 401(k)).
February 1, 2002... The IRS has posted at its Web site, www.irs.gov, the names of M&P and volume submitter sponsors who submitted their GUST documents by December 31, 2000. Plans had to be submitted by that date to obtain the extended GUST remedial amendment...

Elimination of post-hardship contribution limit. (Matthews 401(k)).
February 1, 2002... Treas. Reg. [section] 1.401(k)-1(d)(2)(iv)(B)(4) provides that where an active employee receives a hardship distribution of salary deferrals from a 401(k) plan, the participant's limit under IRC [section] 402(g) for the calendar year...

Charging participants for distributions. (Matthews 401(k)).(Brief Article)
February 1, 2002... The DOL held in Advisory Opinion 94-32A that a plan could not charge an alternate payer for the cost to prepare a qualified domestic relations order (QDRO). It held that the imposition of such fees could encumber the alternate payer's...

Benefits while on leave. (Matthews 401(k)).(Brief Article)
February 1, 2002... In case you haven't read about the myriad military leave protections somewhere else, here is a brief summary of laws affecting the recent call-up of reservists: Wages: Employers are not required to pay employees who are on military...

Regulatory and judicial update.(Brief Article)
February 1, 2002... Item Statement Waiver of Notice 2002-1 small user The IRS released guidance in Notice 2002-1 regarding fee for the waiver of the IRS user fee for determination letter determination applications filed...

CENSUS of certified employee benefit specialists, "New Kid on the Block: Financial Planning as an Employee Benefit": International Society of Certified Employee Benefit Specialists, December 2001. (Industry Insights).(Brief Article)(Statistical Data Included)
February 1, 2002... In June of 2001, the International Society of Certified Employee Benefit Specialists surveyed a sample of its 3,850 U.S. members (professionals involved in a benefits capacity), asking for personal information relating to financial planning...

Company stock in a 401(k) plan. (Last Word on 401(k) Plans).(Brief Article)
February 1, 2002... The proper role of company stock as a 401(k) investment has become the subject of heated debate, fueled by the erosion in the equity markets and most recently by the Enron collapse. Legislation has been proposed to limit investment in company...