Monthly Archives: August 2009

Vesting – When is a Year a Year?

Posted on August 31, 2009 by 401kBasics

(Posted at August 27, 2009) We are coming out of the recession and our economy is showing increased signs of strength every day. However, job losses, while subsiding a bit, are continuing and the employment situation will be in a … Continue reading →

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Choosing a Retirement Plan: Money Purchase Plan

Posted on August 27, 2009 by 401kBasics

Highlights: Money purchase plans have required contributions. That is, you, as the employer, are required to make a contribution, on behalf of the plan participants, to the plan each year. With a money purchase plan, the plan states the contribution … Continue reading →

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Choosing a Retirement Plan: Profit-Sharing Plan

Posted on August 27, 2009 by 401kBasics

Highlights: Guess what. You don’t need profits in order to make contributions to a profit-sharing plan. Of course, having a profit would probably make it easier to actually contribute something. Contributions to a profit-sharing plan are discretionary. There is no … Continue reading →

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Has your company’s layoff caused a partial termination of your retirement plan?

Posted on August 24, 2009 by 401kBasics

Maybe you have been forced to lay off employees because of a price collapse in your industry or to brace for economic challenges ahead. Maybe you have been forced to cease operations at one of your business locations. Or maybe … Continue reading →

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Compensation considerations for qualified plan sponsors

Posted on August 24, 2009 by 401kBasics

An often overlooked aspect of qualified plan administration is “compensation.” At last count, it was conceivable that a qualified plan sponsor might need to deal with as many as eight different definitions of compensation in order to keep a plan … Continue reading →

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Can I contribute to my 401(k) after taking withdrawals?

Posted on August 24, 2009 by 401kBasics

Most plans that allow “in-service” withdrawals for participants age 59½ and older do allow continued contributions. But consider other options too. If you’ve been told that you can withdraw from your 401(k) plan without penalty while still employed, then it … Continue reading →

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Resolving IRS (and DOL) Penalties for Late Form 5500 Filing

Posted on August 24, 2009 by 401kBasics

Recently, a number of employers have received letters from the IRS assessing penalties ($25 per day) for the late filing of Form 5500 for the employer’s plan(s). The letters generate two important questions for the employer: 1- May the employer … Continue reading →

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Five Plan Design Considerations

Posted on August 22, 2009 by 401kBasics

1. If your plan is top heavy (most likely requires a 3% contribution to non key participants if the key employees are benefitting from the plan), you should adopt the Safe Harbor NEC plan design (3% contribution to all eligible … Continue reading →

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Plan Termination Primer – Considering a Plan Termination

Posted on August 22, 2009 by 401kBasics

This section is strictly for review purposes. It is not to be used as a legal or consultative opinion as to the decisions you make regarding plan design, service providers, or the termination process. Before terminating your plan, please make … Continue reading →

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Timing of Amendments to 401(k) Plans

Posted on August 22, 2009 by 401kBasics

We often receive questions whether a certain plan feature can be added or removed from a plan at any time during the plan year. This article will provide general guidance as to the timing rule for plan amendments and review … Continue reading →

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